Miguel Arias Canete, the EU's climate change and energy commissioner, and Maros Sefcovic, vice president of the European Commission, sent a letter to the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) urging them to finance a gas pipeline running from Azerbaijan to Europe, Climate Home News revealed on November 27.
The European Commission released the letter, which was dated July 13, 2017, under freedom of information laws. In it, Arias Canete and Sefkovic urge Werner Hoyer, the EIB president, to support a project that the European Union has deemed as of common interest, namely the Southern Gas Corridor.
The initiative consists of offshore works at the Shah Deniz gas field in Azerbaijan's portion of the Caspian Sea, as well as of a network of three interconnected pipelines that will deliver 16bn cubic metres (cm) of gas to Turkey and Europe through Georgia. A $40bn investment, the project is part of the EU's efforts to diversify its energy sources away from Russia.
Despite the EU's public commitment to advancing renewable energy and energy efficiency in the bloc, Brussels and its financial arms EIB and EBRD have equivocated with regard to fossil fuels. The official position in Brussels is that gas will serve as a transition fuel from coal to renewable energy, because it is cleaner than oil and coal.
At the UN's Conference of Parties (COP) held in Bonn in November, its secretary general Antonio Guterres urged the world to stop investing in large infrastructure projects that are not green because "they will lock us into bad decisions for decades to come".
The EBRD already provided a $500mn loan for one of the pipelines back in October, and a host of other international financiers, including the World Bank, have lent upwards of $3bn for the project. A $1.3bn loan from the EIB is expected to be approved shortly.
But climate change activists and transparency watchdogs are not as convinced about the need for the gas project, and have criticised the EU's role in financing it. Another issue that has cast a shadow of doubt over the project is Azerbaijan's track record of human rights violations and corruption. In recent years, numerous investigations have revealed that Baku has used money from diverted billions to bribe European officials, including officials in charge of overseeing human rights in Europe.
Arias Canete himself has been the subject of controversy in recent years. The Spanish right-wing politician and businessman, whose family has long invested in oil and gas, in addition to agriculture and bullfighting, has spearheaded efforts to boost the gas trade across the Mediterranean. The Panama Papers release in 2016 implicated him and his family in the offshore havens furore. His family is currently the subject of an investigation by the Spanish tax authorities.