Jul 7, 2009, 10:56 GMT
Berlin - Germany, Austria and Switzerland on Tuesday cancelled financing for a controversial hydroelectric dam in south-east Turkey over concerns that it will flood ancient ruins and harm the environment.
State-run credit agencies for the three western European countries said their decision followed the failure of Turkey to fulfill environmental standards for the 1.2-billion-euro (1.68 billion dollars) Ilisu Dam and hydro lake.
Abdulvahap Kusen, mayor of Hasankeyf, which would be flooded by the lake, welcomed the decision and called for his town, which has thousands of years of history, to be declared a UNESCO world heritage site instead.
'We want Hasankeyf preserved for future generations,' he told the German Press Agency dpa.
The western European nations were providing cheap export credits for power machinery and other items. Germany's export credit alone was worth 190 million euros. Buyers often use those delayed payment terms as a form of project finance.
Without the aid, Ankara could find in harder to complete the 135-metre-high dam, which will have a water reservoir behind it covering more than 300 square kilometres for use in irrigation and power generation.
More than 10,000 people will lose their homes and farms if the area is flooded.
The export-credit institutions last year suspended their financing because the Turkish government had failed to fulfill the criteria by December 2008. They later gave Turkey a 180-day extension, which expired on Monday.
The statement by Germany's Euler Hermes Kreditversicherung AG, Oesterreichische Kontrollbank AG and Schweizerische Exportrisikoversicherung said that while Turkey had made progress on meeting many of the standards, others were left unfulfilled.
The dam project is part of the Turkish government's plan to boost economic prosperity in the country's less-developed south-eastern region, long troubled by clashes between security forces and the outlawed Kurdish Workers Party (PKK).
Germany's development aid minister, Heidemarie Wieczorek-Zeul, hailed the decision, saying, 'Our critical view of Ilisu was correct from the start.
'If people, the environment and cultural treasures are not looked after, the supply and credit contracts for the dam must be terminated,' she said.
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