In the 1980s, multilateral development banks (MDBs), such as the World Bank and the Asian Development Bank, made large loans to countries for internationally-financed projects. In sharp contrast to normal bank contract requirements, they also made mega-loans without specific “do no harm” requirements, which would have prevented environmental damage or social harm resulting from their investments.
Instead, MDBs relied on their clients to “do the right thing” in their own way, under what is now known as a borrower systems or country systems approach. This has led to an extraordinary amount of damage to project-affected communities and the environment.
Allowing borrowers to apply their own do no harm rules to taxpayer-financed loans has proven extremely risky, both to the environment and to those who live in project-affected communities.
Development finance from MDBs has often led to big-ticket power generation and large-scale infrastructure projects, which carry severe risks. In the worst case, they cause conflicts, human rights violations, the destruction of natural resources, the weakening of democratic institutions, and an increase in greenhouse gases.
The climate emergency and the alarming loss of the planet’s biodiversity are closely related to ill-conceived large-scale infrastructure projects. These include power plants that will generate greenhouse gases and pollution for decades to come, and large hydropower dams, mining projects and export corridors that slice through some of the world’s few remaining wild areas, intact forests, and coastal areas.
VedvarendeEnergi works to ensure that money from public budgets, spent globally on development and infrastructure, contribute to the advancement of sustainability for populations and the environment.