U.S. Export-Import Bank (EXIM), the official export credit agency of the United States, is voting on Thursday whether to underwrite a loan backing an oil and gas project in Bahrain despite a U.S. pledge to stop supporting the expansion of fossil fuel projects.
Last month, Exim voted to notify Congress that it plans to underwrite a loan of more than $100 million to the borrower, Bahrain's state company Bapco Energies, which would help it drill more than 400 oil and gas wells in the Middle Eastern country. The project will see the involvement of SLB, the world's biggest oilfield services provider.
The plan to back fossil fuel expansion runs counter the U.S. Administration's climate pledge to stop financing such projects.
According to environmental campaigners Friends of the Earth, "EXIM has approved many fossil fuel projects since 2020, despite receiving directives from the Biden administration to move toward renewable energy financing."
"In 2023 the institution funded nearly $1 billion for overseas oil and gas development, violating President Biden's 2021 Executive Order," Friends of the Earth United States said last month.
Kate DeAngelis, Senior Program Manager of International Finance for Friends of the Earth, said:
"Time and again the Export-Import Bank proves itself to a be a loose cannon, blatantly disregarding White House climate guidance to funnel hundreds of millions in taxpayer dollars toward fossil fuels."
Ahead of today's vote, U.S. Democratic lawmakers also expressed concern about the plans of the Export-Import Bank to back the oil and gas expansion project.
"The world is in the midst of a climate crisis that is already having devastating impacts," the Democratic members of Congress, led by Senator Jeff Merkley of Oregon, wrote in a letter this week to bank board members and Biden administration officials, as quoted by Bloomberg.
"We cannot afford to have ex-im undermine domestic and international climate progress by financing projects that worsen this crisis."
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More