Export credit agencies pull out of Ilisu project – report

London, 25 June: Germany, Austria and Switzerland are to withdraw their export credit guarantees for Turkey’s Ilisu dam project, jeopardising the project’s future, according to a report last Friday from the German newspaper Frankfurter Rundschau.

An announcement is due on 6 July – 180 days after the three export credit agencies (ECAs) suspended guarantees, because the controversial project had not met World Bank environment, resettlement and cultural heritage guidelines. However, according to the report, the German government has already decided to withdraw its backing for the project.

Sonja Kohler, communication manager for the Swiss ECA Schweizerische Exportrisikoversicherung (SERV), wouldn’t confirm the report. “We are still checking all facts and information,” Kohler told Environmental Finance. “A decision has not been made yet.” She added that all three countries’ ECAs – including German ECA Euler Hermes Kreditversicherungs (Hermes) and Austrian ECA Oesterreichische Kontrollbank (OeBK) – will come to a unanimous decision, but would not announce it before the agreed date.

SERV was providing insurance cover for engineering giant Alstom; Colenco and Maggia, consulting engineers; and Stucky, an engineering company. Other companies receiving insurance from the ECAs include another equipment supplier, VA Tech Hydro; construction companies Nurol, Cengiz, Celiker and Zueblin; engineering company Temelsu; and consulting engineers Dolsar and Rast.

European banks financing the project were also expected to withdraw their loans, increasing the likelihood that the project could be cancelled because of a lack of funds and technical prowess, according to CounterCurrent, a German anti-Ilisu campaign group.

The Ilisu dam project is part of the Turkish government’s Southeastern Anatolia Project, known as GAP, which consists of 19 hydro projects and 22 dams. Construction started on the Ilisu dam in 2006 which, if completed, is expected to have a capacity of 1,200MW.

The Turkish government says the dam will spur economic, social and ecological development in the region, but opponents, such as CounterCurrent, say that the project will flood the ancient city of Hasankeyf and around 300 archaeological sites, destroy hundreds of kilometres of ecosystems and displace as many as 65,000 people.

Ulrich Eichelmann, from the Stop Ilisu Campaign in Austria, said that even with the ECAs’ withdrawals, the campaign wouldn’t end. “This is an important stage win for us,” Eichelmann said. “We will now increase our efforts to have the project revoked in Turkey as well.”