Brazilian NGOs urge World Bank not to approve $1.3 billion environment loan

For immediate release

Brazilian environmentalists, social movements and networks monitoring international financial institutions have asked the World Bank to postpone a decision on the US$1.3 billion "Programmatic Environmental Sustainability Development Policy Loan Project" to Brazil. The loan is scheduled for a vote today by the World Bank board of executive directors.

In a letter to Pamela Cox, Vice-President for Latin America and the Caribbean, the groups say that prior loans aimed at mainstreaming environmental considerations in Brazilian government policies have failed. As an example, they cite the failure of Brazil's Mines and Energy Ministry to incorporate social and environmental considerations adequately in the country's latest Ten-Year Energy Plan 2008-2017, which includes 71 new large hydroelectric dams, in addition to coal, oil, nuclear, and natural gas plants, and a huge expansion of sugar cane plantations for ethanol, while providing few measures for improved energy efficiency and for promoting alternative energy sources like wind and biomass.

"Brazil's energy policy assumes there's a need to increase energy supply exponentially. In fact, with the global economic crisis, electricity consumption is actually falling, providing an excellent opportunity for Brazil to implement alternatives to building destructive dams in the Amazon," says Glenn Switkes, Latin America Program Director of International Rivers.

The groups charge that the loan has been pushed forward without sufficient information being made available and with no prior consultation with the Brazilian public. They say they have reason to believe the resources will be used by Brazil's Economic and Social Development Bank (BNDES) to finance large-scale infrastructure projects in the Amazon - the bank recently approved more than $6 billion in loans for two huge dams on the Madeira River, which will harm the environment and local populations.

According to Gabriel Strautman of Brazil's Network on Multilateral Financial Institutions (Rede Brasil), "BNDES has failed to meet its mission of promoting social justice. 75% of the money it loans goes to large business groups, whose economic activities cause enormous and irreversible environmental impacts. In the same way, the World Bank's loans to Brazil have caused widespread environmental and social damage".

Read the original letter in Portuguese.

Read the English translation of the letter.