This is the fourth part of a five-part investigation into how UK government climate finance aid is grabbing land, displacing communities, and furthering colonialism in indigenous communities. You can read part one here, part two here, and part three here.
At the villages hosting India’s largest solar park, there is no heating and no eating for residents. A report by Mongabay in 2022 revealed how the arrival of the Pavagada solar park in the southwest Indian state of Karnataka did nothing to prevent the frequent power cuts and energy poverty experienced by the people living in the host villages. The communities do not benefit directly from the power generated by the project itself. Farmers have lost land for growing the crops that feed their families and support their livelihoods.
The Canary investigation from part three of this series found that the UK has invested development funds in this project. This was done through its national development bank, British International Investment.
Climate and development aid is creating conditions for corporate colonialism. It is entrenching poverty for marginalised indigenous and working class communities in the Global South. Meanwhile, it is also making huge profits for multinational corporations. And, these are the very same companies that are exploiting poor, vulnerable, and marginalised communities in the UK.
Wind energy for corporations
If climate and development aid isn’t helping the communities living at the site of these renewable energy projects, who benefits? A wind project in southern Mexico pertinently illustrates the answer. Here, rising energy bills and corporate profit-driven poverty is an experience familiar to the marginalised farming communities who live there. Renewable energy companies and corporate carbon-offsetting are to blame.
Wind farms dominate the landscape of the Isthmus of Tehuantepec. Turbines surround the towns of multiple Ejido land-based farming communities. Like the solar parks in India, they have led to displacement, loss of land-derived livelihoods, and a litany of other social problems for small towns and villages across the region.
When the wind parks arrived, communities faced rising and unaffordable energy prices and a loss of state subsidies. This is because the presence of the large-scale wind projects designate the area an ‘industrial town’. While residents of La Ventosa and other nearby villages faced the prospect of energy companies cutting off their power, one of the wind farms here, La Mata and La Ventosa wind park, generates cheap wind energy for Walmart. French energy giant EDF, owns and operates the wind farm.
In the state of Oaxaca in 2016, where the wind farm is located, 66% of homes faced energy poverty. The La Mata and La Ventosa wind park project was partly financed by the UK government in 2008 through the Clean Technology Fund (CTF).
UK international climate aid is prioritising corporate profit over people and creating conditions for neocolonial patterns of land-grabbing.
Leo Saldanha, from the Environment Support Group in India calls these neocolonial patterns of land-grabbing “corporate colonisation”.
Industrialised nations are providing climate and development aid in the form of loans and grants to big corporations. This is enabling these large companies to buy up land for renewable energy projects and carbon offsetting schemes.
Saldanha explained to the Canary how this climate aid apparatus is reinforcing unequal global financial systems. These systems operate in extractive and exploitative ways. They act between rich former colonising nations and the countries they committed these crimes against. Saldanha says that this is how corporate colonialism functions:
Somebody flies in from London or Paris with bags of money, and it’s not that the money is coming free. It is a loan package. So essentially what’s happening is a financialization of a system of control. Which is all pervasive in nuclear, or coal, or oil and gas and so on. And it [renewables] is shifting to this.
Corporate capture of renewables
Globally, there is increasing monopoly of the renewable energy sector. Let’s look at the statistics on worldwide wind and solar capacity from a report by the International Renewable Energy Agency (IRENA) and the Business & Human Rights Resource Centre. The data showed that 15 of the largest renewable energy companies accounted for over 10% of global generating wind and solar energy capacity, producing over 130,000 megawatts of power by 2020.
Bloomberg called these new energy giants the ‘clean supermajors’. It highlighted that these renewable energy companies are beginning to overtake the oil and gas companies. Enel, Iberdrola, and Orsted are now worth more than some fossil fuel majors.
Gaurav Dwivedi from the Centre for Financial Accountability in India thinks that development aid is enabling the corporate capture of renewables. In a speech he delivered to the ‘World without the World Bank’ campaign week in 2021, he raised the issue of how development aid is being used to push privatisation and commercialisation through public-private-partnerships in India. He highlighted how the large financial institutions and governments are applying this to the renewable energy sector, particularly in solar.
Speaking to the panel, he said:
The operational control and ownership of these projects are with these private companies with technical and financial support from the Bank and its sister organisations for long term project agreement periods. Subsequently, these companies also come to control the land and other resources around these projects.
The climate finance privatisation pipeline
Two solar parks in central India show how climate finance is creating public-private-partnerships in the renewable energy sector. The UK government and the World Bank have part-funded Rewa and Neemuch solar parks in the state of Madhya Pradesh. A Canary investigation found that these solar projects have caused displacement and other social problems for the communities that live at the site of the two parks. Companies have financed both Rewa and Neemuch through public-private-partnerships in the way Dwivedi described.
Global Justice Now have long called out the UK government for using development aid to support these public-private partnerships in infrastructure projects, which have benefitted private companies and failed to tackle poverty as intended.
Dwivedi told the Canary that in India he has noticed a growing monopoly in the sector:
In the existing renewables sector in India, there are a few major private players in renewable energy generation, which is creating a sort of monopolistic scenario.
Using information from the International Energy Agency (IEA) and the IRENA, the Canary found that India’s top ten leading developers in wind energy accounted for approximately a third of India’s total wind capacity by the close of 2020. Meanwhile, the top ten leading developers in solar accounted for over 40% of India’s installed solar energy capacity.
Moreover, these renewable energy monopolies are lining the pockets of billionaires. Mahindra Renewables, a subsidiary of automotive manufacturer Mahindra & Mahindra, owned the second largest share of privatised solar parks in India between 2014-2017. It too won 250MW at Rewa. Mahindra is owned by Indian billionaire Anand Mahindra. He was the 91st richest person in India in 2022. According to the Forbes rich list he is currently the 1729th richest person in the world.
From renewable market capture to corporate land-grabs
Saldanha pointed to why a monopoly by clean energy giants is problematic, saying:
The money is deciding how much, and the money is not deciding whether the energy produced is useful. Because the contracts which are essentially written, are so developed that the person who was financing does not lose out. These are business contracts. They’re not worried about production of energy and its usefulness to society.
Large renewable energy companies are also creating an oligopoly in the Isthmus of Tehuantepec. This is where UK climate finance has funded the wind farm creating cheap power for Walmart. It also funded another wind park here which caused the economic displacement of rural communities.
Geocomunes is a collective that produce maps and reports on land conflicts and privatisation of common resources for grassroots community organisations in Mexico and Central America fighting dispossession. It states that as of April 2020, 77% of installed wind energy capacity was owned by just five companies in the Isthmus. Four out of five of these companies appear in the Business and Human Rights Resource Centre’s Renewable Energy Benchmark, which lists 15 of the largest publicly-trading renewable energy companies in the world.
UK international climate aid is therefore financing projects operated by companies with a growing monopoly on the green energy sector. This is happening at both a national and international level. And it is facilitating corporate colonialism and land-grabs which is harming communities. Saldanha says that it is the capitalist political and economic system that is driving this:
While the technology is sound and this technology is a way of avoiding climate change, it is abused by a political and economic system, which is effectively taking control and saying, okay, now we’ve got the technology, but we’re going to go back to the old world of exploiting resources.
Conglomerates of neocolonial connections
Many of these ‘green supermajors’ and renewable monopolies are subsidiaries of large conglomerates. Their hydra-like shares span sectors and sources of capital from across the globe. This of course means where there’s corporate colonialism taking place in one country, you find connections to corporate colonialism and control elsewhere. As Saldanha says:
So the same guys who loot the public and have heated swimming pools in London, are the guys who are now telling us how to fix the climate by setting up these plants.
In other words, those looting the land of marginalised communities in the Global South also loot the working class here in the UK. Moreover, the Tories’ corporate-backed class war intensifies and energy bills continue to soar. Some of the same conglomerates who are capturing the renewables globally are also dominating UK energy markets.
Anti-capitalist research group Corporate Watch released a series of ‘alternative’ profiles on the Big Six energy companies in the UK. It asked, crucially, who is profiting from supplying energy to UK households? The Canary’s Tom Anderson recently reported on its research, revealing how Scottish Power has forcibly installed pre-pay meters. Energy regulator Ofgem criticised Scottish Power for the way it treated those who fall into energy debt. Among them, sick and vulnerable customers.
Iberdrola, the Spanish multinational parent company of Scottish Power, has the fourth largest installed capacity of wind in the Isthmus of Tehuantepec. Indigenous and farming communities are fighting land-grabbing here for wind projects.
According to a report by the Business & Human Rights Resource Centre, Iberdrola is among the top ten companies with the highest number of allegations of human rights abuses in Central & South America related to renewable energy projects.
In the interests of corporate colonialism, the company hurts working class and marginalised communities both here in the UK and in the Global South. Meanwhile, Corporate Watch reports that directors of Scottish Power and Ignacio Galá, cahri of Scottish Power and CEO of parent Iberdrola, have made millions.
Harming communities everywhere
They’re not the only multinational company harming vulnerable communities in both the UK and the Global South:
- The Business & Human Rights Resource Centre’s Renewable Energy Benchmark 2021 assesses the 15 largest renewable energy companies and their human rights policies. It scored the German multinational zero points for their efforts to address land rights, the rights of indigenous peoples and affected communities and protection for environmental defenders.
- RWE previously owned Npower, formerly a Big Six energy company. They are also a majority shareholder in E.On, another Big Six energy supplier in the UK. In 2019, both were found to have charged customers on prepay meters significantly more than those on direct debit.
- Npower has also received multiple fines from Ofgem for failing to treat customers fairly, and was criticised for not doing enough to prevent vulnerable customers from falling into energy debt.
- In 2021, the Canary reported how E.On was forced to pay £650,000 to customers who were left out of pocket over the Christmas period after the supplier charged them too early for their energy bills.
Green-grabbing and greenwash
Land-grabbing and complicity in human rights abuses is business as usual for oil and gas companies too. Shell – of fossil fuel infamy – operates 250MW at the Rewa solar park in Madhya Pradesh. It acquired part of the solar park this year when it bought a 100% stake in Sprng Energy, to add to their greenwash portfolio.
Shell has raked in huge profits from its North Sea oil and gas projects and other UK sites, while receiving a huge tax rebate. Its utility outfit, Shell Energy, which is hot on the heels of the Big Six suppliers, also overcharged customers on prepay meters in August this year. It had to pay over half a million in refunds to the 11,275 people affected. The company also paid some of this refund to regulator Ofgem’s consumer redress fund.
As well as huge subsidies from the public purse, tax rebates and bailouts, corporations are using International Climate Finance and development aid to furnish their greenwash operations abroad. They use public funds for private ends.
Green capitalism working as intended
Saldanha said of the way companies and governments set up renewable projects:
This is the colonial, imperialist way of an industrial extractivist model that created climate change.
You need to ask questions at every stage to ensure that such reckless and bloody exploitation – it ends, because millions suffer.
It’s the same companies, the same capitalist elite, exploiting the working class and marginalised the world over. Renewables are just their latest frontier. Aid is enabling corporate colonialism via renewables in the Global South. Industrialised nations are providing this aid to the same energy companies abusing vulnerable customers in the Global North. By doing this while entrenching the marginalisation of Black and Brown working class communities in both hemispheres, then, it is a feature – not an accident. Naturally, it is the racist capitalist system working exactly as intended.
Professor Farhana Sultana states that the fight against this racial capitalism in the climate justice movement is a collective endeavour:
arrived at through intentional, concerted, and reflexive work. Radical entanglements of places and histories mean alliances among BIPOC resistance in the Global North with those across the Global South become fundamental to liberation.
Building internationalist solidarity between working class and racialised communities everywhere will be crucial to fight the climate crisis. Moreover, these alliances will be needed to ensure that climate solutions are meaningful and just. Colonial climate aid will never serve the needs of marginalised peoples – but mutual aid and solidarity can.
Featured image via Hannah Sharland
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