Despite the tremendously detrimental impacts of many large dams on ecosystems and people, the OECD supports the industry with special financing terms.
The problem with large dams
At least 45,000 large dams have been built on the earth’s rivers, and between 40 and 80 million people have been displaced by reservoirs. In the wake of the climate crisis, a new hydro-power boom is currently underway, with thousands of more dams under construction or planned. In main dam building countries like China, Brazil and Turkey virtually no rivers will be unaffected.
Dams are not as climate-friendly as the dam industry propagates, as in many cases huge amounts of methane are emitted during the land clearing and construction phase. In 2000, the World Commission on Dams (WCD), comprising industry representatives and project-affected people, conducted an intense investigation in to the impacts of large dams. The Commission issued a series of recommendations for improving dams and minimizing the negative impacts. More than a decade on, however, these recommendations are largely ignored by project sponsors and millions of affected people lose out due to failed compensation and resettlement schemes, while the cumulative environmental impacts are often not even assessed.
ECAs and large dams
Despite the tremendous and often detrimental impacts of dams on ecosystems and people, the OECD supports the dam industry with special financing terms. Even though most OECD member states recognized the value of the ‘Core Values’ and ‘Strategic Priorities’ of the WCD report in 2005 via a Statement on export credits and hydro-power projects , ECAs are not obliged to take these into consideration when supporting dam projects.
Under its 'Sector understanding on export credits for renewable energy, climate change mitigation and water projects' the OECD allows ECAs to grant repayment terms of up to eighteen years for hydro power projects, compared to twelve years for most other power plants.
Dodgy deals with ECAs and large dams
Examples of ECAs contributing to human rights and environmental violations connected to dams include the Three Gorges Dam in China, the Bujagali dam in Uganda, and the Nam Theun 2 dam in Laos.
Only once have ECAs reacted to a failed implementation of social and environmental conditions attached to a guarantee project for a dam: in 2009 three European ECAs withdrew from the Ilisu dam in Turkey after huge civil society campaigns had published reoccurring violations of international standards in the project design and implementation.