The controversial $3.6bn (£2bn) oil pipeline being built by a consortium led by BP in Central Asia yesterday got the backing of the British government and a consortium of 15 banks, including the Royal Bank of Scotland. The news was met with dismay by human rights and environment activists. Platform, a protest group that includes Friends of the Earth and the Kurdish Human Rights Project, said the pipeline would "damage the environment, undermine human rights and destabilise the conflict-prone region".
The group singled out the Royal Bank of Scotland, the only British lender in the commercial banking consortium, claiming the bank had broken the "Equator Principles" it signed last year to only back environmentally sound projects. RBS denied this charge.
A ceremony held in Baku, the capital of Azerbaijan, marked the "final step to realising this project," according to the country's president Ilham Aliyev. The pipeline will provide the West with easier access to Central Asia's vast land-locked oil deposits. The 1,100-mile pipeline is routed from Baku through Georgia to the Turkish port of Ceyhan.
BP has a 30 per cent equity stake in the scheme, which is already half-built. An initial $1bn was provided by the oil giant and the other equity partners behind the pipeline, which include ENI of Italy and ConocoPhillips of the US.
The BTC pipeline yesterday secured the $2.6bn of further financing required and a series of export credit guarantees from governments that included Britain. The European Bank for Reconstruction and Development (EBRD) and the International Financial Corporation, part of the World Bank, will provide $125m each, with much of the rest coming from the 15 commercial banks. The BTC company, set up for the scheme, said: "The participation of the multilateral, export credit and insurance agencies enhances transparency in the project, and gives them the opportunity to influence project implementation, and to help ensure the development potential from the project is realised."
The pipeline, due to pump a million barrels per day of Caspian crude to the Mediterranean coast from April 2005, has been seen as a way for the United States to weaken Iranian and Russian influence in the oil-rich Caspian region. The EBRD insisted the scheme would "unlock the economic potential" of Central Asia and support Azerbaijan and Georgia in their "transition from command to market economies and foster the democratic process".
The commercial banks involved include Citigroup, Société Générale and ABN Amro. The Royal Bank of Scotland said that before backing the project, an independent environmental impact assessment was carried out and that the scheme had the backing of the IFC, which led the drawing up of the Equator Principles. Nick Rau, of Friends of the Earth, said: "If the Royal Bank was serious about its environmental performance, it would put its money where its mouth is and fully implement the Equator Principles."Reuse content