August 24, 2020
WASHINGTON– A new report analyzing the energy portfolio of the U.S. government’s lead development finance institution (DFI), formerly known as the Overseas Private Investment Corporation (OPIC), shows that the institution is still invested heavily in dirty fossil fuels. The analysis finds that over the past 15 years, OPIC invested an average of $357 million in fossil fuel projects and over $500 million in renewables per year.
The U.S. International Development Finance Corporation (DFC) succeeded OPIC in December 2019 with a new emphasis on the world’s poorest countries with the aim to reduce poverty and support sustainable development. The investments analyzed in the report included support for small distributed renewables key to improving access to electricity, but they also included billions over the past decade for fossil fuel projects that have devastating impacts on the environment and local communities, like the Vaca Muerta fracking projects in Argentina. Therefore, the report makes the following recommendations to DFC:
- Continue and increase support for renewables, especially for mini and off-grid renewables, drawing from OPIC’s lessons learned and the good work of the U.S. African Development Foundation;
- End all support for fossil fuels as they inhibit rather than improve the world’s poorest countries’ ability to develop and;
- Become a leader in climate policy by once again strengthening its greenhouse gas cap and reduction schedule by accounting for the greenhouse gas emissions of the entire life cycle for the full lifetime of the projects that DFC supports.
“The climate crisis is already upon us and the U.S. International Development Finance Corporation still has its head in the sand,” said Kate DeAngelis, senior international policy analyst at Friends of the Earth U.S. “Climate change’s disproportionate impact on less developed countries will only worsen if finance institutions continue to pour billions of dollars into dirty fossil fuel projects. It is time for DFC to solely support the clean energy investments that will protect our planet, boost sustainable development, and help reduce poverty. The development finance sector must support a just transition to a sustainable energy future and DFC can lead the way.”