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PARLIAMENTARY WRITTEN QUESTION
Ghana: Development Aid (24 March 2021)

Question Asked

To ask the Secretary of State for Foreign, Commonwealth and Development Affairs, what recent assessment his Department has made of the potential environmental effect of the UK aid-funded Private Infrastructure Investment Group (PIDG) providing a $31 million loan to the Tema gas project in Ghana.

Asked by:
Anna McMorrin (Labour)

Answer

The UK invests in the Private Infrastructure Development Group (PIDG) to improve access to critical infrastructure services for people in the poorest regions of Africa and Asia. Before approving any investment, PIDG gives due consideration to the environmental impact of projects. This is done through an Environmental and Social Impact Assessment of every project. Each investment must comply with PIDG's Environmental, Social, Health and Safety standards, which are based on the internationally recognised International Finance Corporation Environment and Social Performance Standards.

With regards to a project's climate impacts specifically, PIDG only invests in projects which satisfy stringent tests. In 2020, PIDG updated its climate change approach to adopt a new 'Climate Change Standard'. This is in line with the UK Government's policy that it will no longer provide any new direct financial or promotional support for the fossil fuel energy sector overseas, with the exception of gas in limited circumstances where it is aligned with climate goals. The Tema Energy investment in Ghana is a legacy transaction which pre-dates the PIDG Climate Change Standard. PIDG undertook detailed assessments of the transaction to determine the impact of the project on Ghana's renewable energy targets, decarbonisation of the energy mix and transition risks. This assessment concluded that the project will play an important role in Ghana's transition from oil dependency and improve security of fuel supply to the poorest, with positive economic and net Green House Gas emissions benefits.


Answered by:
Sir James Duddridge (Conservative)
13 April 2021

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