Financial Crime World

WESTERN SAHARA: EBRD’s €25 Million Loan to Moroccan Bank Raises Concerns Over Compliance with International Law

The European Bank for Reconstruction and Development (EBRD) has approved a €25 million loan to Morocco’s Banque Centrale Populaire (BCP), which may be used to finance projects in occupied Western Sahara. This move has raised concerns over whether the bank is complying with international law regarding occupied territories.

Background

The EBRD’s loan is part of the Green Climate Fund (GCF)-Green Economy Financing Facility (GEFF) Regional Framework, aimed at facilitating a green economy transition in Morocco. The loan is significant not only due to its size but also because it may be used to finance renewable energy projects in occupied Western Sahara.

  • According to reports, Morocco plans to invest heavily in renewable energy in the territory, with over 50% of its wind energy potential expected to come from occupied Western Sahara by 2030.
  • The BCP has a significant presence in occupied Western Sahara, with 25 offices throughout the territory. The bank has previously been involved in financing projects in the region, including the Aftissat wind farm near El Aaiún, the capital city of Western Sahara.

Concerns over Compliance with International Law

The EBRD’s loan has sparked concerns over whether the bank is complying with international law regarding occupied territories. The International Committee of the Red Cross (ICRC) and other humanitarian organizations have called for respect for the human rights and dignity of people living in occupied territories, including Western Sahara.

  • Despite repeated questions from human rights organizations and journalists, the EBRD has remained silent on whether its loan criteria ensure that funds will not be used to finance projects in occupied Western Sahara.
  • The bank’s silence has led to concerns over its commitment to compliance with international law and its responsibility as a major financial institution.

Complications and Criticisms

The situation is further complicated by Morocco’s claims over Western Sahara, which are not recognized by the international community. The African Union, the United Nations, and other organizations have called for a peaceful resolution to the conflict, but Morocco has maintained its occupation of the territory since 1975.

  • The EBRD’s Annual Meeting in Marrakech, Morocco earlier this month provided a platform for Moroccan officials to tout their country’s investments in renewable energy without differentiating between the territories of Morocco proper and occupied Western Sahara.
  • The bank’s silence on the matter has sparked widespread criticism from human rights organizations and experts, who argue that the EBRD is complicit in perpetuating the occupation by providing financial support to projects in the region.

Conclusion

The situation highlights the need for greater transparency and accountability from international financial institutions like the EBRD. As a major player in global finance, it is crucial that the bank ensures its activities comply with international law and respect human rights, particularly in conflict-affected regions like Western Sahara.