Wednesday, Nov 05, 2003
The International Finance Corporation, the World Bank's private sector arm, yesterday approved almost unanimously funding for one of the world's most ambitious oil drilling and pipeline projects despite last-ditch pleas from some environmental campaigners to halt the scheme.
The decision of the IFC's 24-member executive board is likely to be followed by approval by the European Bank for Reconstruction and Development, which holds its next board meeting next week, and will open the way for national export credit agencies to back the construction of the pipeline.
The IFC's decision will approve Dollars 310m (Pounds 185m) in funding for the project, around 10 per cent of the total cost. An 11-member consortium led by BP is building the pipeline, which will reach more than 1,000 miles from Azerbaijan to the Turkish coast.
Some environmental and human rights campaigners have opposed the pipeline, which they say threatens ecologically fragile areas through which it will run.
In a letter sent to IFC board members ahead of yesterday's meeting, Anders Lustgarten, of the Baku-Ceyhan Campaign, said the pipeline would undermine democracy in the region by handing more power to Ilham Aliyev, Azerbaijan's new president, who won a recent election amid allegations of fraud.
But in the event, one official present at the meeting said the only abstentions on the IFC's governing board were Iran and Russia, who have longstanding objections about control of oil in the Caspian.
Other executive directors said that the extensive environmental and human rights safeguards built into the project justified taking a risk.
Hilary Benn, the British government's development secretary, said the UK believed the involvement of the public sector multilateral institutions provided the best prospect it would be built and operated to the highest social and environmental standards.
By ALAN BEATTIE
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