UK climate aid allegedly used to power Mexican supermarket

British funding meant to tackle climate change was allegedly used to power a Walmart through a wind farm project, according to a report by the World Development Movement.

Donated cash from UK tax payers went via the World Bank which, the report claims, receives 14% of its money – or £385m – from the UK overseas aid budget to the US retail giant.

The report Power to the people? was published today (December 2) and looked at how money taken from the
UK aid budget has allegedly been used to fund a wind farm in the
Mexican state of Oaxaca.

However, the World Bank strenuously denies the allegations saying no UK tax money was used on the project and accused the report’s authors of ‘misrepresenting’ facts.

It said $15m was invested in the La Mata and La Ventosa wind park, which could produce up to 67.5MW of power, from the Clean Technology Fund (CTF) to highlight the region’s ‘world-class wind resource’.

The project received long-term funding from the International Finance Corporation (part of the World Bank group), the Inter-American Development Bank, the Export-Import Bank of the United States and the Clean Technology Fund.

These organisations stepped in after a commercial bank pulled out following the global financial crisis of 2008.

The report goes on to claim the project produces enough electricity to power 160,000 homes but is, it states, being sold at a discounted rate to Walmart.

The World Development Movement’s policy officer, Murray Worthy, said: “Developing countries urgently need finance to help them transition to a low carbon economy.

“But projects like the La Mata La Ventosa wind park show the dangers of throwing public finance at multinational companies like Walmart.

“Projects like this do not need and should not receive aid money – yet developed countries are pushing for the new climate fund to have an arm dedicated to funding this kind of development disaster.”

A spokeswoman for the World Bank said the project did benefit from ‘concessional finance’ in order to ‘catalyse’ the investment.

But explained: “For climate financing to succeed business needs to be part of the solution.

“Walmart is paying a premium for the wind power, without the project they may have taken power from grid produced by conventional sources.

“Even under the self-supply framework, electricity tariffs for large commercial consumers are higher than those set by CFE for residential users.”

Luke Walsh

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