The export credit guarantees provided by Germany, Austria and Switzerland for the contentious Ilisu Dam in southeast Turkey are under review. Government credits in the amount of approximately 500 million Euros insure the work of companies from the three countries on the dam – an approach that has been politically controversial in the past. At the end of 2007, Turkey needed to fulfil a total of 153 conditions, to which the export credit guarantees are linked. These included targets in environmental protection, local population resettlement and the preservation of cultural assets. After failing to make any progress, the three donor countries gave Turkey 60 days to comply, starting in October 2008, or run the risk of abandoning the project.

The hydroelectric power plant on the Tigris should serve as a storage power station to meet peak electricity needs. As part of a regional plan for hydropower development in southeast Turkey, it should generate approximately 3 percent of Turkey’s electricity. Opponents of the dam say that the project does not consider European environmental and social standards. Aside from the irreversible environmental damage caused by the dam, Turkey’s inadequate consultation with downstream countries - Iraq and Syria - is also criticized. The construction of the dam will affect the Kurdish population in particular, significantly impacting their main revenue sources in the region – agriculture and tourism.

Proponents of participation in the dam argue that minimum standards in the project can only be achieved through the credit guarantees, for example the preparation of environmental impact studies and higher compensation for those dispossessed. Statements from Austria’s Foreign Ministry after the mid-December deadline, however, suggest that even this minimum target was not reached and that withdrawal from the project is pending. (Anja Wittich)

For further information on the Ilisu Dam debate please see the German Bundestag
and International Rivers http://internationalrivers.org/en/node/3414

Published in:ECC-Newsletter, December 2008