Monday 4 July 2011

MPs pan World Bank loans to fossil fuel

The UK's cash contribution to World Bank aid projects should be withheld if the Bank doesn't stop loans to coal power stations. This is the verdict of the Environmental Audit Committee, who carried out a report on the impact of overseas aid on climate change and the environment.

The World Bank gives low interest loans to developing countries to invest in areas that need development, such as education and infrastructure.

MPs on the committee said that the Bank lends far too much to fossil fuel powered energy generation. They warned that the Department for International Development (DFID), which gives money to international aid, must toughen up its stance on World Bank loans.

Joan Walley, Chair of the Environmental Audit Committee said: "The World Bank should not assume continued support from the UK unless it changes its ways. DFIDneeds to get tough and use its position as a major shareholder to vote-down dirty coal powered energy projects and ensure that the World Bank's portfolio isn't making climate change worse."

The report calls on the UK Government to ensure that economic activity in Britain does not cancel out or reverse the positive impact that UK aid is having overseas.