US Environmentalist groups have charged the US Export Import Bank of succumbing to intense lobbying after the bank early this month approved $600 million in loan guarantees to suppliers for Reliance Power's 3,960 Mw coal-fired project in Sasan, Madhya Pradesh.
The joint statement from Friends of the Earth, Pacific Environment, Oil Change International and Groundwork on Tuesday precedes the Exim Bank Board meeting, scheduled on Wednesday where it would formally reverse its' last month decision to reject the financing of Reliance's Sasan power project on environmental grounds.
The reversal of the Sasan decision would set a dangerous precedent for other coal projects in the Exim Bank pipeline, including the 4,800 megawatt Kusile coal power project in South Africa, which would emit 30.5 million tonnes of carbon dioxide annually, read the joint statement.
Over 95 per cent of Exim's energy portfolio is already based on fossil fuels, and a series of politically-motivated decisions to fund high-carbon projects would put Exim even further out of step with the Administration's pledges to promote clean energy jobs and tackle climate change, it read.
Three weeks ago, the Exim board had rejected financing for Sasan based on its massive carbon dioxide emissions. The project would annually generate some 26-27 thousand tonnes of CO2, more than the Exim bank's annual emissions for all fossil fuel projects approved by it in 2009.
"Clean energy provides more jobs and does more to advance American competitiveness and security than fossil fuels," said Friends of the Earth President Erich Pica. He pointed out a recent study that showed investing in clean technology exports generated twice as many jobs as a comparable investment in the oil, gas or coal sectors.
While the Exim's new carbon policy allows the bank board to decline a transaction due to its detrimental effects on environment, the environmentalist groups argue that the bank backtracked on its decision to reject the Sasan deal after intense lobbying from Bucyrus, a Wisconsin-based coal mining equipment company.
They contend the Exim bank allowed Reliance Power to submit a new application, which reportedly will include an additional solar energy component but will not lower the pollution levels of the coal plant.
"It appears as though Exim Bank went to the Enron school of energy accounting," said Doug Norlen, policy director of Pacific Environment.
