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US Environmentalist groups have charged the US Export Import Bank of succumbing to intense lobbying after the bank early this month approved $600 million in loan guarantees to suppliers for Reliance Power's 3,960 MW coal-fired project in Sasan, Madhya Pradesh.
The joint statement from Friends of the Earth, Pacific Environment, Oil Change International and Groundwork on Tuesday precedes the Exim Bank Board meeting, scheduled on Wednesday where it would formally reverse its' last month decision to reject the financing of Reliance's Sasan power project on environmental grounds.
The reversal of the Sasan decision would set a dangerous precedent for other coal projects in the Exim Bank pipeline, including the 4,800 megawatt Kusile coal power project in South Africa, which would emit 30.5 million tonnes of carbon dioxide annually, read the joint statement.
Over 95 per cent of Exim's energy portfolio is already based on fossil fuels, and a series of politically-motivated decisions to fund high-carbon projects would put Exim even further out of step with the administration's pledges to promote clean energy jobs and tackle climate change, it read.
Three weeks ago, the Exim board had rejected financing for Sasan based on its massive carbon dioxide emissions.
The project would annually generate some 26-27 thousand tonnes of CO2, more than the Exim bank's annual emissions for all fossil fuel projects approved by it in 2009.
"Clean energy provides more jobs and does more to advance American competitiveness and security than fossil fuels," said Friends of the Earth president Erich Pica.
He pointed out a recent study that showed investing in clean technology exports generated twice as many jobs as a comparable investment in the oil, gas or coal sectors.
While the Exim's new carbon policy allows the bank board to decline a transaction due to its detrimental effects on environment, the environmentalist groups argue that the bank backtracked on its decision to reject the Sasan deal after intense lobbying from Bucyrus, a Wisconsin-based coal mining equipment company.
They contend the Exim bank allowed Reliance Power to submit a new application, which reportedly will include an additional solar energy component but will not lower the pollution levels of the coal plant.
"It appears as though Exim Bank went to the Enron school of energy accounting," said Doug Norlen, policy director of Pacific Environment.
"This is just business as usual, which is to support dirty energy projects at the expense of green jobs.
"Exim Bank should reject the Sasan project and instead use its money to support America's clean energy jobs to support renewable energy exports around the world," Norlen added.
"The White House's swing state politics forced the Exim Bank to botch the agency's first major test of its new carbon policy," said Steve Kretzmann, executive director of Oil Change International.
"It also puts the agency at odds with the administration's other climate efforts, including a G-20 commitment to phase out fossil fuel subsidies and a recent decision to not support the massive Medupi coal project in South Africa with World Bank funding," Kretzmann said.