UK demands repayment of climate aid to poor nations

London, May 18 (UNI) Britain's 800 million-pound international project to help the poorest countries in the world for climate change came under fire last night after it emerged that almost all the money offered by Gordon Brown will have to be repaid with interest.

The UK environmental transformation fund was announced by the prime minister to international acclaim in November 2007, and was widely expected to be made in direct grants to countries experiencing extreme droughts, storms and sea level rise associated with climate change.

But the Guardian has learnt that the money is not additional British aid and will be administered by the World Bank mainly in the form of concessionary loans which poor countries will have to pay back to Britain with interest.

''The UK contributions from the environmental transformation fund ...

will need to be primarily concessional loans. We will also talk to other donor countries about the possibility of grants,'' the letter, signed by environment minister Phil Woolas and international aid counterpart Gareth Thomas, said.

''The climate situation has not been created by us. The money should come spontaneously from rich countries and not be a loan.'' Bangladesh expects up to 80 million people to be displaced by climate change within 50 years.

According to the government, the 800 million pounds will be spent over the next three years, focusing on projects that support development through environmental protection and which help poor countries to tackle climate change. Of the money, 50 million pounds have been earmarked for helping 10 countries in central Africa to tackle deforestation in the Congo basin.

"The World Bank is currently consulting widely on the proposals.

Dfid, Defra [the environment department] and other Whitehall departments will continue to participate in further consultation discussions with the World Bank, other multilateral and bilateral donors, developing countries, the UN system and civil society with the aim of launching the funds at the G8 summit in July.

''Funding should support country-owned action plans and must be consistent with wider poverty reduction activities at a country level.'' UNI XC NC RAI1033