Developing countries are being forced to produce more and more oil and gas to repay their loans to rich countries, according to a study Monday by a coalition of NGOs calling for debt relief to get out of the hydrocarbon “trap”.
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Argentina, Uganda, Mozambique, Pakistan and others “may not be able to move away from fossil fuels and advance the transition to renewable energy unless this fossil fuel trap is resolved,” denounces the Debt Justice coalition of 35 NGOs , including ActionAid International and Friends of the Earth.
“High levels of debt are a significant barrier to oil phase-out for many developing countries,” said Tess Woolfenden, a Debt Justice staffer, in the release.
“Many are able to use fossil fuels to generate revenue and pay off their debts, while at the same time fossil fuel projects often do not generate as much revenue as expected and can push countries even further into debt.” This vicious cycle must stop,” she adds.
“Argentina, for example, has committed to hydraulic fracking in the Vaca Muerta hydrocarbon fields in northern Patagonia” in a bid to repay its debt and get out of the economic crisis, with support from the IMF, argues Debt Justice.
The Argentine government inaugurated in early July the first section of the Nestor-Kirchner gas pipeline (GNK) constructed from the Vaca Muerta (Southwest) mega-hydrocarbon unconventional reservoir. It is the country’s largest energy infrastructure project in 40 years.
Debt Justice is urging developed countries to implement “debt cancellation without economic conditions” to free up budgetary funds for investment in sectors deemed most needed, “including clean energy”.