Three European banks have terminated their support of a major hydropower project in Turkey after an investigation found that the dam project was not meeting agreed standards for socio-economic and environmental impacts.
The export credit agencies of Germany, Austria and Switzerland had agreed to provide export risk insurance to the tune of EUR450 million for the 1200 MW Ilisu Dam on the Tigris River in southeast Turkey. The Turkish government is reported to have said that it will continue with the EUR1.2 billion project.
The banks’ support was designed to cover the European-based suppliers and contractor for the project, including Andritz VA Tech Hydro, Alstom, Ed. Zublin AG, Colenco and Maggia. Turkey sees the project as a key element of its social and industrial development plans.
According to Austria’s Oesterreichische Kontrollbank AG, the export credit agencies advised Turkey and the supplier consortium in December 2008 to suspend construction while specified standards relating to the environment, cultural heritage and resettlement were fulfilled. The banks said in a statement that in spite of “significant improvements”, the requirements had not been fulfilled by the July 6, 2009 deadline.
The main goals of the standards imposed by the three export credit agencies were to minimize the impact of the hydroelectric power plant on people living in the region as well as the environment and cultural heritage, and to fulfill the applicable standards of the World Bank. There were “repeated delays” in implementing the measures, according to Oesterreichische Kontrollbank.
Ilisu is part of Turkey’s Southeastern Anatolia Project, which aims to build 22 dams and 19 power plants on the Tigris and Euphrates rivers and their tributaries. Ilisu will require the resettlement of 78 000 people and will also result in the flooding of cultural heritage site such as the city of Hanskeyf.
Ilisu is due for completion in 2014 and if completed to the current plan will produce 3.8 TWh of electricity per year.
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