Turkey: Controversial Turkish-Azerbaijani gas pipeline gets major EU loan

Recently  the board of directors of the European Investment Bank (EIB) green-lighted a EUR 932 million loan to the Trans Anatolian gas pipeline (TANAP), the Turkish section of the Southern Gas Corridor, a month after handing out the largest ever fossil fuels loan to the western section of the same project.

The Southern Gas Corridor is the biggest energy project the EU is currently pursuing, with the intention of annually delivering 6 billion cubic meters of Azerbaijani gas to Turkey and additional 10 billion cubic meters to the EU. Scheduled to be completed later this year, the 1800 kilometers long TANAP would traverse Turkey from the border with Georgia to the border with Greece.

Civil society groups – including Bankwatch, Counter Balance, 350.org, Re:Common, CEO, Friends of the Earth Europe and many others – have been repeatedly warning that the Southern Gas Corridor project is at odds with EU commitments on both human rights and climate action.
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A study released by Bankwatch in late January has shown that, due to fugitive methane emissions and burning of gas, the Southern Gas Corridor’s climate footprint could be comparable to that of coal, the dirtiest source of energy, or even worse.

In addition, there are mounting concerns over corruption among both governments and companies involved in realising the Southern Gas Corridor. In Turkey, all subcontractors hired by the state-owned energy firm Botas for the project have close ties to President Erdogan’s AK Party, according to a Bankwatch report from December 2016.

An international journalistic investigation published in April 2017 also unveiled the extensive network of politically exposed people in Turkey and Azerbaijan that stand to directly benefit from the project.

In light of the disturbing human rights situation under the increasingly authoritarian regimes in both Turkey and Azerbaijan, last December, 33 Members of the European Parliament wrote to EIB President Werner Hoyer, urging him to suspend plans to finance the TANAP project.

Today’s approval of the EIB’s loan adds to chain of investments in the Southern Gas Corridor from multilateral development banks now totalling over EUR 6 billion in public money.

This decision also took place a day after the European Court of Auditors criticized European financial support to Turkey for being particularly ineffective when it came to the independence of the Turkish judicial system, fighting corruption and media freedom.

Anna Roggenbuck, Policy Officer at CEE Bankwatch Network, said: “With the decision to finance TANAP, the EIB has shown its disregard to Europe’s commitments to climate change mitigation.This project has been approved without a proper climate impact assessment, and in contradiction to pledges under the Paris Agreement to keep global temperature rise to well below 2 degrees Celsius which entails limiting fossil fuels consumption.”

Colin Roche, extractives campaigner with Friends of the Earth Europe, said: “Like adding gas to a fire, today’s decision by the EIB, the EU’s investment bank, to pour more funds into new gas infrastructure is yet another cash injection for climate destruction. The more we invest in gas pipelines like TANAP the more we lock Europe into decades of fossil fuel dependency when we need to be moving to a fossil free future.”

Note EU-Digest: Obviously it would be of interest to many people - to hear the motives from the EIB what led them to provide loans for this controversial project.

Read more: Controversial Turkish-Azerbaijani gas pipeline gets major EU loan | Counter Balance

Britain-EU: Why is Britain's new government keeping quiet about its 40B-euro share in the EU's own bank? - by M.Jay

A row between experts and Ford U.K. over EU loans to its competitors outside of the EU has thrown light on Britain's 40 billion euro stake currently in the EU's own "investment" bank - which could go a long way towards helping the country's health service and creating jobs if it were to be sold to another EU country.

This week a spokesman for the European Investment Bank (EIB) told Daily Sabah it couldn't speculate as to whether Britain's 16 percent could be worth 40 billion euros - which it represents on paper - a tidy sum that Theresa May could use for creating jobs, or funding small businesses. "Unlike other international finance institutions there is not a clear overview of how the U.K. shareholding could be valued," Richard Willis told Daily Sabah, adding, "Therefore the paid in capital as below is one figure and the other is simply 1/6 of all EIB assets. We cannot speculate on this."

Post Brexit talks in Brussels have produced a bitter reaction from the European Commission which is likely to argue that Britain needs to sell its stake in the EIB though - yet may well still benefit from loans to British companies.

Although a Brexit won't stop the practice of the EIB giving whacking loans to companies - outside of the EU - that compete with British ones, which experts are warning are still costing British jobs.

Yet Britain leaving the EU would also mean pulling out of the bank which, in theory, could give the chancellor a cheque for its matured equity stake now believed to be worth 40 billion euros - despite only putting in 3 billion euros of its own money since the 70s.

Such a cash injection, some may argue, would have provided the shortfall the U.K. finance minister would have needed to balance the books, helping firms like Ford U.K. compete with its Turkish competitor benefitting from EIB support.

And Britain will need it now that more EIB loans will be given to many foreign firms that U.K. companies will be competing with them.

British car workers jobs at the Ford plant in Dagenham, for example, could be at risk after experts fear that two EIB loans for Ford factories in Turkey threaten to erode Ford U.K.'s profits, costing jobs.

Could Britain have its cake and eat it, too? Could the government sell its 40 billion pounds stake in the EIB while U.K. firms continue to benefit from commercial loans at the same time? Could it also get assurances that loans will no longer be given to companies whose profits impact directly on U.K. jobs?

"There is simply no roadmap for the process. We would expect that the role of EIB would be one of many issues discussed and covered in lengthy withdrawal negotiations," Richard Willis said recently.
 
Read more: Why is Britain's new government keeping quiet about its 40B-euro share in the EU's own bank? - Daily Sabah