The World Bank has announced its intention to fund the Azerbaijan and Turkey part of the Southern Gas Corridor to Europe, despite concerns over the geopolitical context and fossil fuel dependency.
The World Bank and others have tried to convince the region's poor that oil pipelines in the Caucuses would bring economic prosperity and strengthen democracy in the region. However, this Caspian oil game is partly to blame for the increased poverty, conflict and misery that now plagues the thousands of citizens displaced in the August conflict in Georgia.
In July, as the oil in the IFC-supported Baku-Tblisi-Ceyhan (BTC) pipeline finally began flowing a year behind schedule, civil society groups from affected countries and elsewhere presented evidence of destruction, abuse and betrayal.
Just after key project documents were released in June campaigners in Georgia and the UK filed legal challenges to the Baku-Ceyhan oil pipeline, raising awkward questions for the World Bank Group and other potential financiers.
An agreement between oil multinationals and the government of Turkey for an IFC-backed pipeline exempts the companies from obligations under Turkish law that may threaten the project’s profits, including environmental, social and human rights legislation.
Italian bank pulls out of IFC-backed oil pipeline in the Caspian
The Baku Tbilisi Ceyhan pipeline came under fire last month.
Apparently due to US pressure, the IMF reversed its decision to suspend loan payments to Azerbaijan because of concerns about government misuse of the State Oil Fund.