The European Bank for Reconstruction and Development has confirmed it will not be backing the controversial Sakhalin II gas pipeline project.
Green lobbyists had been putting pressure the EBRD, which had been considering a loan of up to US$300 million for the project, asking it not to offer funding as the scheme did not meet the bank’s own environmental criteria.
Last Thursday the bank announced it would not be backing the project, but cited the change in the ownership structure rather environmental concerns as it reasoning.
State-owned Gazprom took control of the project last year after Russian officials expressed concerns about its non-compliance with environmental legislation, though many commentators suggested the motivation was more to do with retaining control of the country’s vast fuel resources than about the environment.
The NGO Central and Eastern European Bankwatch, which aims to keep banks on the straight and narrow by publicising investments it considers unethical, have welcomed the EBRD’s decision as a victory for the environment and has called on other banks to follow suit.
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