A sound investment? EIB funding for Enron

Brussels, March 26, 2002 – ”Our Mission is to further the objectives of the European Union by making long-term finance available for sound investment.” – Mission of the European Investment Bank.

“To receive our support, projects and programmes must be viable in four fundamental areas: economic, technical, environmental and financial. We appraise each investment project thoroughly and follow it through to completion”.

The recent report, “Enron’s Pawns: How Public Institutions Bankrolled Enron’s Globalization Game” from the Institute for Policy Studies (IPS) has revealed that Enron, the disgraced American company which recently declared bankruptcy amidst allegations of criminal wrongdoing, received USD 7,2 billion in public assistance for its global operations. A portion of that public assistance came from the financial arm of the European Union – the European Investment Bank (EIB).

“The IPS report proves what we have been pointing out for the last couple of years,” says Magda Stoczkiewicz, coordinator of the EIB: NO REFORM – NO MONEY! campaign. “The EIB is neither efficient nor does it truly fulfil EU objectives. It operates behind closed doors, without proper supervision, clear sectoral strategies or strict environmental standards.”

According to the IPS report, the EIB supported ENRON with the following loans: $493 million towards Enron’s investment in an Italian power plant and $60 million toward the Bolivia to Porto Alegre, Brazil gas pipeline. The Bank also provided indirect support for Enron when it approved a $78 million package for a 1000 MW power project in Santa Rita, Philippines. Enron was not a developer of that project, but it did hold the plant’s fuel supply contract. The EIB is also considering a $35 million contribution toward an electricity transmission system in Macedonia in which Enron has an interest.

The fact that the EIB would have no problems with supporting ENRON clearly calls for a closer look at this institution and the manner in which it fulfills its goals. On February 7 of this year, more than 30 NGOs from all over Europe launched a campaign entitled, EIB: NO REFORM – NO MONEY! They are linking the EIB’s request for a capital increase from the 15 EU member states with the implementation of necessary reforms in the areas of: public access to information; environmental standards; development mandate; supervision by EU institutions.

“I wonder which of the EU objectives the EIB thought they were fulfilling when they decided to support ENRON” says Stoczkiewicz, who adds, “and that’s without mentioning the “sound investments” which they are so proud of!”

CONTACT
Magda Stoczkiewicz, CEE Bankwatch Network, Friends of the Earth International, magdas[at]foeeurope.org , (March 27-29th, tel: +48 12 430 03 20)

The campaign EIB: NO REFORM – NO MONEY! is coordinated by the CEE Bankwatch Network and Friends of the Earth International.

The IPS report can be found at sustainable-economy.org/seen/