According to an EIB press release in 2001, the 4.2 billion dollar Chad-Cameroon pipeline project was all about securing “a real breakthrough for Chad, one of the least developed countries in the world.”

Judge for yourself the merits of that prediction with today’s news that the World Bank has pulled out of the project citing the Chadian government’s failure to honour an agreement to use some oil revenues for poverty reduction.

The EIB has provided the project with 144 million euro financing, and its intentions remain unclear. Having “aligned” itself with the World Bank when Paul Wolfowitz oversaw the bank’s pioneering initiative in Chad disastrously and predictably unravel in early 2006, the EIB suspended co-operation on any new public sector projects in Chad. But expect the EIB to keep its head down here: it will be busy considering whether the project’s “social and environmental concerns have been met” (in the language of a European Parliament resolution from 2000 – strange language at that, you almost know what they mean). As Korinna Horta of Environmental Defense Fund writes of the project, however, in Counter Balance’s Citizens’ Guide to the European Investment Bank:

“It has fuelled violence, impoverished people in the oil fields, and along the pipeline route it has exacerbated pressures on indigenous peoples and created new environmental problems. At the same time, with about 118 million barrels of oil produced by September 30, 2005, ExxonMobil, the leader of the oil consortium and the world’s largest oil company, has registered record profits.”

Well over half of the EIB’s lending for the project went to the oil consortium.

More EIB involvement in dirty energy projects in Africa looks likely following the announcement this week of a one billion dollar EU aid package to expand Africa’s energy sector. Oil and gas pipelines between African countries feature heavily (along with “transparency”) in this Africa-EU partnership, as does the Europe-bound nine billion euro Trans-Sahara Gas Pipeline. Exactly what the bank “promoting EU climate change and energy objectives” is being lined up for in all of this will be something to watch.

The European parliament last week demonstrated its growing vigilance over the activities of the EIB with a vote related to the bank’s expansion into Central Asia that insists on any EIB loans to the region’s states being conditional upon their progress in establishing the rule of law and in respecting human rights and fundamental freedoms.

A Green amendment to disallow Uzbekistan from receiving EIB financing until such time as EU sanctions against the repressive Karimov regime are lifted received overwhelming parliamentary support. In a European Voice opinion piece in July, our Counter Balance colleague Desi cited the European parliament’s point to the European Council and the European Commission from earlier this year: “human-rights issues should carry equal weight with the EU’s robust approach to energy, security and trade”

A landmark day, then, for the EIB – human rights conditions look set to play a part in its operations for the first time, and on top of this the resolution explicitly stipulates that individual projects receiving EIB support in Central Asia are subject to a Sustainability Impact Assessment carried out independently of the project sponsors and the EIB.

But what was behind the Commission’s original, condition-free proposal that now goes to a Council decision in this beefed-up form? It originally had no qualms about lumping Uzbekistan in with the other four states. And despite a tabled Green amendment (defeated) to restrict EIB loans to non-state sponsored projects only in Turkmenistan, President Berdymukhammedov may just have some inkling about why his tough guy approach to democracy is being tolerated in a “development funding” context by Brussels. Commissioner Piebalgs and the EIB are singing from the same hymn sheet at any rate.

Welcome, incidentally, to Counter Balance’s new blog.