ExIm's Board Rejects US$200mn Camisea Loan

The board of directors at US Export Import Bank (Ex-Im) voted 2-1 on Thursday to reject a US$200mn loan for the upstream part of Peru's Camisea natural gas project because of environmental concerns, an Ex-Im source told BNamericas.

"I'm very excited to hear the news. It's unprecedented, usually by the time [a proposed loan] gets to the board level it means it will pass," the executive director of Amazon Watch Atossa Soltani told BNamericas. "We hope that other financial institutions in Europe and Latin America will follow Ex-Im's lead," Soltani added.

Board members at the Inter American Development Bank have told Amazon Watch and other environmental groups that a no vote by the Ex-Im bank would cause "problems" for them to approve a US$135mn loan package for the downstream project, Soltani said. The IDB's board is scheduled to vote by September 10.

"We are aware of the Ex-Im bank's decision, and the IDB will evaluate the financial and environmental implications in relation to the IDB consideration of financing for the downstream component of the Camisea project, which is the pipeline," IDB spokesperson Dan Drosdoff told BNamericas. Environmental groups, including Amazon Watch, want the upstream consortium to stop drilling inside the NK indigenous reserve and move the proposed gas fractionation plant in Pisco department far away from the Paracas marine reserve.

The IDB and the company building the plant, Argentina's Pluspetrol, says that construction on the plant in Pisco has already started, but environmental groups in Peru say only site-preparation work is being carried out. "It isn't too late to turn back," Soltani said, adding there is a "serious" risk of oil spills contaminating the Paracas reserve if the plant goes ahead.

The Camisea consortium would end up saving money and avoid legal problems in the long-term by dealing with environmental and social issues now rather than when it's too late, Soltani said. "The project sponsors need to make fundamental changes to reduce the project's environmental impacts or they will continue to meet obstacles in getting financing," Soltani said.

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