Dam funding
July 7, 2009
State-run credit insurers for the three European countries said Tuesday that their decision followed Turkey's failure to fulfill environmental standards for the 1.2-billion-euro ($1.68-billion) Ilisu Dam and hydro lake.
The institutions suspended their financing for the project on the Tigris River last year because the Turkish government had failed to fulfill the criteria by December 2008. They later gave Turkey a 180-day extension, which expired July 6.
"The agreed contractual conditions regarding the environment, cultural heritage and relocation could not be fulfilled," the insurers said in a joint statement.
Construction on the project began in 2006 but its fate has now come into question. Turkey would finance the project from its own resources, Environment Minister Veysel Eroglu told a Turkish paper last month when international support for the project became less certain.
Danger to ancient town
Turkish novelist and government critic Yasar Kemal joined those opposed to the project, including Nobel Prize winning novelist Orhan Pamuk and Turkish pop singer Tarkan, saying that it threatened the archeologically important city of Hasankeyf, which he called a "world heritage site."
The Romans had used Hasankeyf as a fortress to ward off Persian attacks. The town was later destroyed by Mongols and rebuilt in the 11th century by Selcuk Turks. The dam's current plans allow for the ruins to be moved to a nearby area.
The hydro lake is planned to have an area of more than 300 square kilometers, which would force the relocation of 10,000 people from 80 surrounding villages by its scheduled completion in 2013.
Set to produce 3.8 billion kilowatt hours of electricity a year, the dam project is part of the Turkish government's plan to boost economic prosperity in the country's less developed south-eastern region, long troubled by clashes between security forces and the outlawed Kurdish Workers Party (PKK).
Germany had originally guaranteed that German exporters would be paid 190 million euros. The three credit agencies that withdrew their support are Germany's Euler Hermes Kreditversicherung, Austria's Oesterreichische Kontrollbank and Switerzland's Schweizerische Exportrisikoversicherung.
sms/dpa/Reuters/AFP
Editor: Kate Bowen