Construction of large dams in developing countries would be subsidised under European commission proposals, despite protests from environmental groups and institutions such as the World Bank.

The large-dam subsidy is part of a package of proposals to give better treatment to renewable energy projects, including solar, wind, tidal, wave and small hydro projects provided to developing countries. It will be presented at a meeting in Paris today of the export credit agencies of the world’s 29 richest countries.

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The proposals, put forward in an EC document marked “confidential” but leaked to the Guardian, suggest that the normal 10-year repayment period for such projects be extended to 15 years so that developing countries can afford the repayments. The export credit agencies, which are subsidised by taxpayers, will guarantee the bills if the countries default.

The proposals include large hydro-electricity projects, which environmental groups and the World Bank do not regard as renewables.

Evidence presented to the World Commission on Dams in 2001 said that methane releases from drowned vegetation in large hydro-schemes adds more global-warming gas to the atmosphere than is saved by not burning fossil fuels in conventional power plants.

The dams commission suggested a number of safeguards, but the World Bank and others have refused to back large hydro projects.
Full Article: guardian.co.uk

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