Several environmental NGOs have learned of a general loan of $8 billion granted to TotalEnergies by 12 banks, including 3 French banks, via the Bloomberg terminal, a software system that provides extensive financial data in real time. They are denouncing the loan, which could be used to finance EACOP (East African Crude Oil Pipeline), a highly controversial oil project. Read on.
The largest loan granted to TotalEnergies since the Paris Agreement
Environmental NGOs, including Reclaim Finance, are accusing several banks of granting an $8 billion revolving credit facility to TotalEnergies, thereby signing a blank check for the oil company.
The funding, which NGOs say is the largest since the Paris Agreement was signed, has been granted by 12 banks that are all members of the Net Zero Banking Alliance, an alliance founded in 2021 in favor of carbon neutrality.
Among these banks, 3 French banks played " a leading role ", according to the NGO Reclaim Finance's press release, in " structuring, coordinating and syndicating the loan ". They are BNP Paribas, Société Générale and Crédit Agricole, which had nevertheless announced in April 2021 that they would not finance the EACOP oil project led by TotalEnergies in Uganda.
However, this general loan is not earmarked for a specific project, and " will be used to finance the company's entire operations, including the deployment of new oil and gas projects ", including EACOP, warns Reclaim Finance.
NGOs denounce lack of compensation
French bank Natixis is also among the signatories to this loan, alongside Standard Chartered PLC, RBC Dexia Investor Services Bank, Mizuho Bank Ltd/Paris, JP Morgan, Deutsche Bank France, Barclays, Santander and Banco Bilbao Vizcaya Argentaria.
" This operation took place just a few days after the publication of the third chapter of the report by the Intergovernmental Panel on Climate Change (IPCC), which reminds us that the window for action to limit global warming to 1.5°C is becoming very narrow ", laments Reclaim Finance, which points out that TotalEnergies " will have used up its entire 1.5° carbon budget by 2035 at the latest ".
When questioned by the French daily Les Echos, neither TotalEnergies nor the banks Crédit Agricole, BNP Paribas and Société Générale would comment. A banking source told the daily that it was a one-year loan designed to " meet the Group's liquidity needs in the context of the deteriorating bond market ".
For environmental NGOs, the crux of the problem is the lack of conditions and quid pro quos in exchange for this loan, granted to a group whose 70% of capital expenditure is devoted to fossil fuels.
On May 4, the NGO Reclaim Finance, along with Greenpeace, Oxfam, Friends of the Earth and several other NGOs, called on shareholders "to take account of the climate emergency in their votes at the TotalEnergies Annual General Meeting " to be held on May 25.
They are asking shareholders to " cease all new financial support for TotalEnergies until the company commits to halting the development of new oil and gas projects, a sine qua non for limiting global warming to 1.5°C according to the International Energy Agency ".