Recent blog posts by policy expert Dr. Peter Bosshard raised concerns over the Swiss government’s financial support for new fossil fuel projects including a new power plant planned to be built in Kiyanly, Balkan, Turkmenistan.
The takeaways:
- In Turkmenistan, a country notorious for corruption and repression, the Swiss government’s export risk insurance agency (SERV) has approved a massive gas-fired power plant project in Kiyanly, despite violating Switzerland’s commitment to the Clean Energy Transition Partnership (CETP).
- The project, worth CHF 3,375 million (USD 3,967 million), is being built by Calik Enerji Swiss AG, a company with close ties to Turkmenistan’s government and a history of cronyism. An export risk insurance is a type of insurance provided by a government to protect its companies that export goods or services to other countries, covering risks such as non-payment and political instability, to encourage and support domestic exports.
Corruption, climate and communities
According to Bosshard, the project undermines Turkmenistan’s transition to a sustainable and climate-resilient economy and contradicts Switzerland’s own climate strategy. It raises concerns about corruption, given Turkmenistan’s reputation as one of the world’s most corrupt countries. The involvement of a company with a history of questionable business practices further exacerbates these concerns.
The Kiyanly power plant will emit 4.928 million tonnes of CO2 equivalents per year, a figure that amounts to 128.1 million tonnes over the 26-year lifetime of the project. This is nearly one-fifth of Switzerland’s total carbon budget for the 2020-2050 period. The project’s climate costs are estimated to be at least $2.44 billion per year, or $63.6 billion over its lifetime. However, it is not the Swiss government or exporter that will pay for these damages, but rather the communities affected by climate disasters around the world.
Switzerland’s support for the Kiyanly power plant is not an isolated incident. The country is violating its commitment to end all funding for international fossil fuel projects by supporting six gas power plants through its export credit insurance SERV. This approach has sparked concerns about the country’s commitment to reducing greenhouse gas emissions.
In ongoing climate negotiations, the EU has proposed extending the existing ban on coal power plants to the fossil fuel energy sector as a whole, except in limited and clearly defined circumstances. However, Switzerland, along with the US, Korea, and Turkey, has opposed this proposal. This opposition is surprising given that Switzerland has formally supported the Clean Energy Transition Partnership (CETP) and has pledged to reduce its dependence on fossil fuels and reach net zero emissions by 2050.
The Kiyanly power plant project highlights the need for Switzerland to re-examine its approach to export finance and climate action. The project’s delivery value is $2.4 billion, but its climate costs are estimated to be $63.6 billion, causing 26 dollars in climate damages for every dollar of Swiss exports.
