A European insurance consortium has suspended 1.2 billion (Dh5.9bn) of financing for a controversial Turkish hydro-electric development on the Tigris River, casting doubt on the project's viability. As a result of Tuesday's decision, suppliers underwritten by the insurers will be forced to stop work on the dam for 180 days - a final grace period granted to Turkish authorities to comply with social and environmental obligations. The group, comprising state-owned export agencies in Germany, Switzerland and Austria, had previously given the Turkish government a 60 day period to comply with a number of conditions for the financial guarantees.
That period expired on Dec 12. In October, the consortium notified companies involved with the bitterly contested Ilisu dam project that Turkey had not done enough to ensure the fair and orderly relocation of tens of thousands of mainly Kurdish inhabitants of affected towns and villagers, uphold environmental standards and protect cultural heritage. "In sending out the environmental failure notice, the export insurance agencies have stepped on the emergency brake," Germany's ministry for economic co-operation and develop ment said. "Turkey has not lived up to its commitments in any way."