Steve Kretzmann at Oil Change International has gone for the World Bank’s jugular with some unrelenting exegesis of the Bank’s 2007-2008 energy lending: World Bank Group lending to coal, oil and gas is up 94 percent from 2007, comprising over 3 billion dollars of public subsidiy. The global climate change prize fighter’s lending on coal has rocketed by 256 percent in the last year. Once Steve’s finished conducting some real world auditing of the Bank’s commitments to renewables in FY2008, he arrives at 280 million dollars.

The analysis from Oil Change and other NGOs relies on the World Bank’s own figures. What to make, then, of one footnote in the ever-expanding bailout? The EIB’s Global Loan system of lending via commercial banks to small and medium-sized enterprises is to be “front-loaded” (Gordon Brown’s phraseology) with 30 billion euros, representing a doubling of the bank’s lending to SMEs.

Such a sum may not strike you as so exceptional in the current economic climate. And, for the time being, SMEs have just about nowhere else to turn to for credit. But with ever more put-upon taxpayers naturally demanding greater democratic control of economic life (”May we respectfully inquire about what strings are attached to this latest multi-billion public money hand-out?”), just what kind of businesses are going to benefit from this 30 billion euro EIB package?

As things stand, not only are there no guiding thematic principles (eg preferences for green technology) underpinning the EIB’s Global Loans mechanism, the EIB itself does not know where the billions are ending up. Bankwatch has tried to determine if good things are getting funded under EIB Global Loans, but the system spat us out fairly comprehensively. In a recent drive to gain more transparency publicity than the latest celebrity see-through dress, the EIB has agreed to ensure that SME beneficiaries now know that their credit line has indeed originated in Luxembourg. Other than that, we’re all in the dark - so if you work for or know of an SME that has enjoyed an EIB loan or is looking for one, comments below please.

Front-loading the EIB in such opaque circumstances appears to do little to dispel public concerns about corporate free-loading. How prudent is that?

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.