print    send   Correct 

The study of the current portfolio of multilateral banks in the field of biofuels does not say much about their role as agents of expansion for the new green revolution that is rapidly transforming the land in tropical countries into large scale single-crop farming concerns for the exportation of bioenergy. In order to understand their policies in a comprehensive way it is necessary to look at the information provided in the investment of USD 3 billion announced in 2007 by the Inter-American Development Bank (IDB), the stated objectives of assistance funds, and the political discourse of the representatives of these institutions.

The IDB has only three specific projects in the biofuel industry in Brazil totalling USD 570 million. They are: the restructure of the debt of the Moema factory in Sao Paulo, as a means of increasing its production and exporting capacity of sugar and alcohol; and the two greenfields in Minas Gerais and Matto Grosso do Sul, which involve new areas, though not necessarily "green" or organic production areas as the words suggest. However the institution announced the disbursement of five more loans in 2007 totalling approximately USD 2 billion, for investments contributing to Brazil's goal of triplicating the production of ethanol by 2020 [1].

According to Roberto Vellutini, Director of Infrastructure and Environment at the IDB, speaking at a meeting with NGOs in Washington DC on 19 September 2007, it seemed that the relief of poverty and rural development, decentralized and diversified, made no sense to the Bank's mission, and that its goal was to increase the exportation capacity of agricultural goods.

The study of the regional portfolio of the IDB will show that these projects are preceded by donations, offered through technical assistance projects to study the regulations and market conditions for the development of pilot projects, specifically focussed on the Caribbean and Central America [2]. These are already part of the reprocessing route of Brazilian ethanol for exportation to the United Sates, which aims at the transfer of technology for the production of ethanol. The IDB is developing a series of blueprints, which involve the diagnosis for the development of biofuels in countries like Haiti, Honduras, Nicaragua, Panama and the Dominican Republic.

The IDB's special Sustainable Energy and Climate Change Initiative (SECCI) fund, which originally had USD 20 million to invest in assistance for renewable energy, energy efficiency, adaptation to climate change and development of carbon markets, is being used mainly for biofuel blueprints to promote the expansion of ethanol production for exportation to the above mentioned countries.

Likewise, the World Bank's International Finance Corporation (IFC) stated that, in spite of the institution's criticism of first generation biofuels, there have been investments of up to USD 200 million dollars in the area of ethanol and sugar cane production. From the institution’s points of view these are the only viable sources for the production of biofuels. These investments are allocated in three Brazilian projects, all of them in the state of Sao Paulo. In spite of receiving annually 15 to 20 proposals for financing in this area, the IFC chose to invest "only in solid and well-established companies, large groups with the capacity to increase exports of alcohol and sugar, with low financial risks" [3].

This leads to the conclusion - which comes as no surprise - that the main multilateral "development" banks in the region are determined to guarantee and give priority to the diversification and future supply for the growing demand for biofuels, especially in the United States. At a moment when the demand for oil is at its highest, this is a form of expanding biobusiness with the excuse of relieving the poverty of Latin American countries. Although the banks claim that they are committed to safeguarding the environment for the sake of "efficient production", they do not seem worried about the disputes over the use of land or the unviability of family agriculture, two processes that have been verified in Brazil.

Given that family agriculture, which is the basis of food security in the region [4], the availability of water resources and better lands for the production of food are already threatened by the expansion of large scale single-crop farming for exportation, the multilateral banks should be exposed for their promotion of biofuels as a strategy for relieving poverty and promoting development.

Notes:

[1] See: IDB targets $3 billion in Private Sector Biofuel Projects
[2] See IDB report “A blueprint for greenenergy in the Américas: Central America and Caribbean”
[3] Notes on the meeting of NGOs Núcleo Amigos da terra Brasil, Bank Information Center and Friends of the Earth USA with executives in the area of biobusiness at the IFC, 18 September 2007, Washington, D.C.
[4] According to INCRA (National Institute of Colonization and Agrarian Reform of Brazil), over 60% of the food that reaches the table of Brazilians is produced by family agriculture farming, which equals 4.1 million families, who are responsible for 77% of land tenancy in the countryside.

print    send   correct