This is an update about the Ilisu hydroelectric power project, a major dam project in the South-Eastern part of Turkey. Swiss companies recently requested the Swiss authorities to provide an official export risk guarantee (ERG) of several hundred million Swiss francs for Ilisu. The Berne Declaration and other NGOs oppose coverage of the project by ERG for a variety of reasons.

Background information
Ilisu is currently the largest hydropower project of Turkey. Damming the Tigris river near the Iraqi border, Ilisu will flood an area of 313 km2. Ilisu will have a capacity of 1,200 MW, and will produce 3,800 GWh of power per year. The costs are estimated to be $ 1.52 billion (not including financing costs). Construction is supposed to start in mid-1999, and production of power, in mid-2006.

After the Turkish government unsuccessfully tendered Ilisu as a BOT scheme, it awarded the contract to a Swiss consortium consisting of Sulzer Hydro and ABB Power Generation without further tendering. The construction part was subcontracted to an international consortium lead by a British company. In early July, Sulzer submitted a request for ERG coverage to the Swiss authorities. Companies involved in the construction consortium will approach other national export credit agencies in the coming months. With loans totalling $ 1.2 billion, Switzerland has so far been the most important foreign funder of the GAP. ABB alone boasts an involvement in half of Turkey's installed hydropower capacity.

Ilisu is part of the South-East Anatolia Project (GAP), a giant hydropower and irrigation scheme on the Euphrates and Tigris rivers in the Kurdish part of Turkey. Once the GAP is completed, its reservoirs are supposed to produce 27,300 GWh of power per year, and irrigate a land area of 17‘600 km2. The GAP's total price tag is supposed to be $ 32 billion.

The Swiss NGO consultation
The Berne Declaration and the Swiss Coalition of Development Organizations have requested a participation of NGOs in ERG's decision-making process for decades. In 1997, more than 25,000 people supported this demand as part of a postcard-writing campaign of the BD. The Swiss government has so far refused this demand. As a first gesture of openness, they recently invited the BD, the Swiss Coalition and WWF Switzerland to attend a hearing on Ilisu on August 25. The hearing might constitute the first instance of regular consultations of Swiss NGOs by ERG.

The Swiss NGO position on Ilisu
The Berne Declaration prepared a detailed position paper on Ilisu for the August 25 hearing (in German). The BD, the Swiss Coalition and WWF Switzerland oppose coverage of Ilisu by an export risk guarantee for the following reasons:

	Social impacts: GAP reservoirs have so far involuntarily displaced 100,000s of persons. Compensation has usually been tied to the property of land or houses. Since most land in South-East Anatolia is concentrated in the hands of the village headmen, many landless families have not been compensated at all. Instead, they have quietly moved to the slums of the big cities. In the case of Ilisu, the number of people to be displaced has not been established yet. It has so far been estimated to be around 15,000 on the basis of helicopter rides only. Affected people are not being consulted. As was the case with earlier GAP projects, the mode of compensation will only be decided after construction starts. This violates OECD's resettlement guidelines. (Both Switzerland and Turkey are members of OECD. The World Bank has not become involved in Ilisu.)
	Environmental impacts: Solid waste and wastewater of major cities such as Diyarbakir (pop. 1 million) are still being dumped into the Tigris river without any treatment. The Ilisu reservoir will vastly reduce the autopurification capacity of the Tigris. Wastewater treatment plants are being planned in Diyarbakir, but no binding decisions on this have been taken yet. Sulzer and ABB admit that the Ilisu reservoir will also infest the area with Malaria and Leishmaniosis. The two companies have commissioned an environmental impact assessment on Ilisu. Arguing that the EIA has only been done for export credit agencies and banks, they have not made this document available to NGOs or representatives of the affected people.
	Archeological impacts: The Ilisu reservoir will flood Hasankeyf, a Turkish town with a population of 5,500. Hasankeyf is the only town in Anatolia which has survived since the middle ages without destruction. Being a rich treasure of Assyrian, Christian, Abassidian-Islamic and Osmanian history in Turkey, Hasankeyf was awarded complete archeological protection by the Turkish department of culture in April 1978. It must thus be protected against all negative impacts. The decision by the department of energy to flood Hasankeyf obviously violates this protection. Numerous cultural experts and activists in Turkey have appealed to the national authorities and the Swiss companies to save Hasankeyf by changing the design of Ilisu.
	Political impacts: The GAP dams constitute a major tool of political blackmail for Turkey vis-a-vis Syria and Iraq. This is also true for Ilisu. At its normal operating level, the Ilisu reservoir will have a spare capacity of 3 billion m3. Given the average streamflow of the Tigris, this will be sufficient for Turkey to block any water flowing to Iraq for several months. The Convention on the non-navigational use of transboundary waterways adopted by the UN General Assembly in 1997 prohibits damaging downstream countries by blocking rivers. Apart from China and Burundi, Turkey was the only country which rejected this convention. The blackmail potential of the GAP has already heightened the tensions between Turkey, Syria and Iraq considerably. This is supposed to be the main reason why the World Bank has abstained from financing GAP projects since 1984.
	No analysis of alternatives: At a cost of $ 1,300/kW (plus financing costs), Ilisu is a relatively expensive power project. Project opponents in Turkey believe that power could be saved at a lower cost by modernizing the country's transmission system, which has a reputation as being inefficient. No alternatives to Ilisu have been considered as part of the feasibility studies. It seems likely that the Turkish government is prepared to pay a high price for Ilisu because of its interests to control the Kurdish population of South-East Anatolia, and to increase its political clout vis-a-vis Iraq.

A spokesperson of UBS, which syndicates the financing package for Ilisu, admits that Turkey is "a difficult risk". In September 1997, the "Institutional Investor" rated Turkey at only 38.6 (in a scale from 0 to 100), which was lower than other industrializing countries such as India, Mexico, Brazil, or the Philippines. In spite of the high country risk, Turkey in March 1998 was the most important recipient country of Swiss export risk guarantees with a total coverage of 1.175 billion Swiss francs. (In December 1997, Indonesia had still been the number one ERG recipient.) Turkey is thus a high risk for ERG even before the decision on Ilisu.

Conclusion
For all the reasons listed above, the Berne Declaration opposes the coverage of Ilisu by ERG. If the Swiss government decides to grant coverage anyway, the BD requests that the following conditions be fulfilled first:

	Affected people, including landless families, must agree to a rehabilitation package before the guarantee becomes effective.
	Binding decisions to implement wastewater treatment facilities and other adequate environmental measures must be taken before construction starts.
	The height and location of the Ilisu dam must be redesigned in such a way as to save the town of Hasankeyf from being flooded.
	The high country risk of Turkey must be fully covered by the ERG fees.

The board of ERG is expected to issue a recommendation on Ilisu soon. The Swiss government is expected to take a decision on ERG coverage in September or October. In cooperation with other NGOs, the Berne Declaration will continue to oppose coverage and press for its concerns.