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NGOs: We Need Sustainable Development Banks
email this pageprint this pageemail usEmilio Godoy - Inter Press Service
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July 06, 2010

Access to sustainable energy should be a priority, and they should assess the poor communities that they intend to support in order to determine the best options available.
- Astrid Puentes
Mexico City - Non-governmental organisations from across the Americas are demanding that the World Bank and the Inter-American Development Bank institute policies that favour sustainable energy and help mitigate climate change.

Civil society groups sent letters to the two institutions, both headquartered in Washington, about the IDB's strategy on climate change and the World Bank's long-term energy policy.

In the case of the IDB, 10 NGOs from Brazil, Chile, Colombia, Ecuador, Mexico, Peru and United States told the regional bank it should reduce its projects' contribution to climate change, respect communities' rights, make accounting more transparent, finance the development of renewable energy sources and phase out fossil-fuel sources and hydroelectric dams.

"There is a need for coherence between policy and what they end up financing," said Astrid Puentes, co-director of the Inter-American Association for Environmental Defence (AIDA, for its Spanish initials), one of the groups that signed the letter of comments.

"Access to sustainable energy should be a priority, and they should assess the poor communities that they intend to support in order to determine the best options available," she told IPS.

The IDB, headed by Colombian Luis Alberto Moreno, opened a first phase of consultations with NGOs from Apr. 26 to May 26, and will begin a second stage, Jul. 30 to Oct. 30, centred on drafting a strategy against climate change.

In November and December, the bank -- which was created to promote development and reduce poverty in the region -- is to receive more comments, and has slated April 2011 for the release of the final climate change plan.

"We hope they listen to the messages from the organisations, especially about the impacts of climate change on sensitive areas for biodiversity and the rights of the local and indigenous populations," César Gamboa, of the Peruvian NGO Law, Environment and Natural Resources, which also signed the letter.

Gamboa also urged that the bank "incorporate these recommendations in all future strategies."

At the IDB's annual assembly, held in March in Mexico, the board of governors (ministers of finance or directors of central banks from the member countries) agreed to a capitalisation of 70 billion dollars, greater transparency in designating the funds, and special attention to climate change.

The aim of the strategy being debated is to serve as the guiding principle to increase the bank's support for climate change mitigation and adaptation projects, states the IDB proposal.

"We want them to incorporate approaches that are sustainable from the environmental and social perspectives," Margarita Flórez, of the Colombia- based Latin American Institute for an Alternative Society and Law, told IPS.

"There is a dichotomy between what the governments and the banks say about climate change, and their action in terms of energy projects," she said.

In Mexico, the IDB has spent more than 100 million dollars on private projects for wind energy, especially in the southern state of Oaxaca, but the energy and financial benefits do not extend to the local communities, according to activists.

In 2009, the bank sent more than 15.5 billion dollars in loans to Latin America, of which 3.1 billion went to Mexico, followed by Brazil (2.9 billion) and Argentina (1.6 billion dollars).

The IDB "should put the priority on investments in energy efficiency and truly renewable and clean energy, which effectively promote climate change mitigation and adaptation, and discourage those investments that cause serious impacts," stated the signatory NGOs.

The groups said top priority should be given to initiatives for local and decentralised development, as well as policies and directorates that are participatory and transparent, "in order to strengthen governance and prevent an increase in social conflicts."

The IDB itself has said it "will focus attention on essential economic sectors," like agriculture, the management of water resources, urban development and infrastructure projects.

Thirteen other NGOs wrote to the World Bank about its energy strategy, emphasising communities' rights, green energy and transparency in the elaboration, execution and accounting of the projects the bank supports.

Groups from Argentina, Chile, Ecuador, Colombia, Costa Rica, Mexico, Peru and United States want the World Bank to make equitable and sustainable energy a priority, and to take into account the past, present and future effects of its financing on the environment, the climate and the communities.

In a timeline similar to the IDB's, from February to June, the World Bank collected comments from civil society around the globe, and from July to September it is drafting a strategy, and will conduct more consultations in November and December.

The World Bank plans a public debate of the final document in February-April 2011 amongst its top officials.

"They should re-evaluate models of energy supply and demand, and the role of the bank. The bank also has to account for the historic impact of the projects it finances and look for the best possible options. There are no clear indicators of whether or not a project has reduced poverty," said AIDA co- director Puentes.

In 2009, the World Bank provided 17.9 billion dollars in loans to Latin America, with Brazil, Mexico and Colombia among the top recipients.

Since the creation of the World Bank Group's Inspection Panel in 1994, a third of the cases that have been presented for failing to comply with standards or safeguard policies have been related to energy and infrastructure projects.

"The World Bank has a predominant role in the region, as a bank that influences and produces knowledge. In that regard, it has an opportunity for political dialogue that can change the unsustainable 'extractivist' policies in the region, especially in the Amazon Basin," said Gamboa.

Among the problems cited by the Inspection Panel are the lack of consultation of the affected peoples about the projects, failure to comply with population relocation plans, insufficient community participation in project benefits, and violation of environmental and social standards and policies.

"The World Bank has to demonstrate with indicators that the kinds of projects that it finances have a widespread benefit and that it does not just support the construction of mega-projects, which favour the expansion of economically powerful sectors," said Flórez.

The Bank also needs to ensure that the energy matrix in the countries it supports is turning its focus to clean energy sources, she said.

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