Export support for dirty energy in Africa

Not in line with the Paris Climate Agreement

Export credit agencies provide insurances and guarantees to companies doing business abroad. "Despite international climate agreements and national climate ambitions, export credit agencies continue to support fossil energy projects abroad on a large scale," says Niels Hazekamp of Both ENDS. "This undermines the Paris Climate Targets. Export credit agencies hardly play a role in insuring green, sustainable projects. This report once again makes us wonder whether ECAs are able to make the changes that are urgently needed."

Dependent on fossil

By supporting the expansion of the fossil sector in these African countries, export credit agencies ensure that economies remain dependent on fossil fuels. "And that in a world that is increasingly switching to renewable energy," says Isabelle Geuskens of Milieudefensie. "Those countries risk ending up with huge debts and fossil infrastructure for decades to come, while in the future the demand for their oil and gas will decrease substantially. The Dutch export credit agency Atradius DSB already warns of the dangers of huge debts in African countries that are economically dependent on fossil fuels, but at the same time it contributes to this dependency by continuing to support fossil fuels in these countries.

People and nature

Part of the research is based on reports from local communities that have been affected by the fossil energy projects. People have been evicted from their land or have seen the land and water they depend on becoming destroyed or polluted. They are hardly compensated for this, with many ending up living in poverty.

Beneconsila Busingye is a widow of 56. She had to move for the oil developments in Uganda, which were supported by UK ECA UKEF: "I first had to leave my land for the construction of the airport for the oil developments. Access to the land that we were given in compensation, was next cut off by the government because of the EACOP oil pipeline developments. After my husband died, the government did not want to compensate me. I never signed anything, yet all of a sudden I am no longer allowed to use my land. How can I feed my children now that my husband is dead?

Export credit agencies for a green and just transition

With the report, the organisations want to raise some fundamental questions about the role of export credit agencies in supporting dirty energy in Africa. Hazekamp: "The vision that export credit agencies have of sustainability is highly questionable. Our research shows, for example, that large hydropower plants, to which most of the other half of all export support for the energy sector goes, continues to be referred to as ¨green¨ and ¨sustainable:¨. However these reservoirs also emit an a lot of methane, which contributes to climate change. The dams also affect the natural environment and are linked to human rights violations".

The report calls on the governments to stop supporting fossil projects via their ECAs. The environmental organisations also ask these governments to take a critical look at whether the energy projects supported by ECAs in the south are able to contribute to a just and green energy transition.