The UK government has become embroiled in a row over financial support for fossil fuel companies after announcing a $1bn (£660m) funding package involving Pemex, the Mexican state oil group.

Greenpeace said the move to provide credit for “dirty” energy projects under the UK Export Finance (UKEF) scheme flew counter to the government’s commitments to fighting climate change.



The Tories and Lib Dems pledged in 2010 that export finance would be used to champion British companies that developed and exported innovative green technologies around the world, “instead of supporting investment in dirty fossil fuel energy production”.

“The truth is that the ‘greenest government ever’ has spent the last five years bankrolling some of the dirtiest energy developments on the planet, from Russian coal mining to the Saudi oil industry,” said Lawrence Carter, a Greenpeace UK energy campaigner.

“Our ministers should stop acting like the merchant bankers of climate change and start using export finance to promote the cutting-edge clean technologies that are reshaping energy markets the world over.”



The financing agreement was revealed during a visit to Aberdeen by Matthew Hancock, the UK energy minister, alongside Mexico’s president Enrique Peña Nieto who is on a wider state trip to the UK.

Mexico’s energy system is undergoing significant reform and Nieto was visiting Scotland to speak to energy leaders across the business and education sectors, as well as signing agreements with the UK government for greater collaboration in the areas of energy and climate change.

“This visit today by President Peña Nieto to the UK’s energy capital cements the already close links between our two countries and heralds an era of closer collaboration in energy,” said Hancock.

“The government of Mexico expects $50bn of investment by 2018 in the wake of its energy reforms – boosting the economy and creating jobs while rejuvenating production,” he added.

Over the course of the parliament, UK Export Finance, a small government department, has given financial support worth only £3.6m to green energy projects around the world, it was revealed last month through data released to the Guardian under freedom of information rules.

A spokesperson for UKEF said the memorandum of understanding with Mexico was to work “towards” a line of credit and was not a firm commitment at this stage, or an investment.

“UK Export Finance’s role is to provide financial support to UK exporters, primarily through providing insurance to exporters and guarantees to banks that enable them to take advantage of overseas contracts. As part of that, we have a dedicated Environmental Advisory team which reviews the environmental, social and human rights issues of projects covered by the OECD’s Common Approaches, prior to the department agreeing to provide support.”

Nieto was being introduced in Aberdeen to executives from BP and Shell, both of which have made no secret of their desire to enter the Mexican energy sector, which has been largely closed to foreign firms.

There is considerable excitement in western oil capitals about the onshore shale prospects that exist in Mexico. Equally, there are unexplored deep-water areas of the Gulf of Mexico, across the territorial dividing line from large US discoveries.