By Pete Harrison
BRUSSELS (Reuters) - The European Union's executive has recommended making an extra 2 billion euros ($2.7 billion) of loans available to help other countries combat climate change.
Belarus, Iraq, Libya, Iceland and Cambodia were also added to the list of more than 70 territories that the EU can lend to.
The proposal came in a European Commission review on Wednesday of the "external lending mandate" of the EU's financing arm, the European Investment Bank (EIB).
Such funds might be used by poor countries to overhaul their energy infrastructure to cut carbon emissions, or to develop new water infrastructure as old sources dwindle.
The EIB's overseas lending mandate amounts to 25.8 billion euros across 2007-2013, of which around 14 billion remains, but an additional 2 billion euros reserve was set aside in 2006.
It is this 2 billion that has been marked for release.
"This optional mandate will be...dedicated to projects which contribute to the fight against climate change across all regions covered by the decision," the Commission said in a statement.
Anti-poverty group Oxfam International said loans were no substitute for the EU fulfilling its pledge at Copenhagen climate talks to provide 7.3 billion euros in "fast-start" funding for developing nations.
That money would help build trust in the years before a international climate deal is forged to replace the U.N.'s Kyoto Protocol which expires in 2013.
"Lending money to help developing countries adapt to a crisis caused by developed countries is outrageous," said Oxfam's EU policy advisor Tim Gore.
"The poorest and most vulnerable countries and communities in the world need fresh finance as grants for adaptation -- not loans that will plunge them further into debt," he added.
(Reporting by Pete Harrison, editing by Timothy Heritage)
