Campaigners condemn new £100m of UK aid for fossil fuels in Africa

Tuesday, 30 June, 2020

Revelations in CDC Group annual report mean £668m of UK aid has financed fossil fuels overseas since Paris Agreement

Campaign group Global Justice Now has condemned new revelations of the UK government putting aid money into fossil fuel projects overseas in today’s annual report of CDC Group, the UK’s development bank.(1)

The report lists CDC investments including £65.5m in Early Power Limited, a gas power station in Ghana, and £34.9m in the gas-fired Azito power plant operated by CDC subsidiary Globeleq Limited in Cote d'Ivoire.

Reacting to the annual report, Daniel Willis, climate campaign manager at Global Justice Now said:

“CDC have today let slip that another £100 million of UK aid has gone directly to fossil fuel projects in Africa - even as they try and talk up their record on climate change. What’s more, a derisory 15% of the electricity generated by their investments was renewable last year - this has actually fallen. 

“It is a totally contradictory use of UK aid to be investing in these projects. We know that climate change impacts communities and exacerbates poverty in the global south the most, and the UK is hosting a crucial global climate summit next year. With CDC set to become an ever bigger part of UK aid after the abolition of DfID, this latest revelation points to a worrying future. If investments like these continue, it will make the UK government and its claims of climate leadership a laughing stock ahead of COP26.”

The news follows Global Justice Now analysis earlier this month which revealed that over half a billion pounds of UK aid has been invested in fossil fuel projects overseas since the Paris Agreement was signed in 2016. It brings the total such investments since the global climate accord to £668 million.(2)

The investments are part of an estimated £1.6 billion of UK aid money that has been invested in overseas fossil fuels in the past decade. This includes CDC’s £621 million portfolio of active direct investments in fossil fuels dating back to 2013, alongside £623 million of indirect investments in funds previously identified as supporting oil and gas companies.

The research focused on CDC Group, a private bank wholly owned by the Department for International Development, which invests in private sector projects around the world. It showed that UK public funds have been invested in a variety of fossil fuel projects including:

  • $39 million invested in Tè Power in March 2018 to build a 50 megawatt, heavy fuel oil-burning power plant in Conakry, Guinea.
  • $82.9 million given to Amandi Energy to construct a 203 megawatt gas turbine in Western Ghana. 
  • $103 million to the Sembcorp North-West Power Company to construct the Sirajganj 4 gas power plant in Bangladesh

As the UK prepares to host the rearranged COP26 climate summit in Glasgow in November 2021, campaigners are calling on the government to get its house in order by putting a stop to all use of public money to finance fossil fuel projects overseas, as well as commit to a socially just plan to divest from all its fossil fuel investments within two years.

CDC Group is not the only UK government institution financing fossil fuel projects overseas. UK Export Finance, an agency of the Department for International Trade, has been found to have put £3.31 billion into fossil fuels since the Paris Agreement was signed. The Foreign Office-controlled Prosperity Fund invested £1.93 million of aid money in oil and gas projects between 2016 and 2018. And the Private Infrastructure Development Group, which has received $1 billion from the UK aid budget since 2002, has committed £641 million to support fossil fuel projects, using some of the world’s most polluting fuels. 

Notes

1. CDC Annual Report 2019, https://www.cdcgroup.com/en/news-insight/news/cdc-pledges-to-deliver-a-decade-of-impact-investing-in-support-of-the-uns-sustainable-development-goals/

2. Figures for post-Paris fossil fuel investments, June 2020, https://www.globaljustice.org.uk/resources/decarbonising-aid-why-uk-must-end-its-overseas-fossil-fuel-financing-cop26

3. On gas privatisation in Ghana, https://www.brettonwoodsproject.org/2020/04/ghanas-sankofa-gas-project-backed-by-world-bank-brings-fiscal-pain/ 


Image: nicostock/Shutterstock

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