Ecuador: Germany Pledges $50M/Yr For Yasuni Project

(Dow Jones)--Germany has pledged $50 million a year as a contribution to the Yasuni-ITT project, which would see Ecuador compensated for not extracting oil from an Amazonian reserve, Ecuador's president said Tuesday.

Speaking at a Chatham House conference, Rafael Correa said the $50 million was part of an annual $350 million compensation the Andean nation is seeking as part of the project.

He said the funding be equivalent to 10 to 12 years of earnings.

Ecuador's environment minister, Marcela Aguinaga Vallejo, later said the pledge, made following an Ecuadorian visit in June, was dependent on the creation of a trust fund for the project and that other countries would join.

Foreign Affairs Minister Fander Falconi said Ecuador is also in talks with France and Spain about financing the project, saying it had received a "great response" from them.

President Correa said the project will keep 850 million barrels - or 20% of Ecuador's proven oil reserves - under the ground. It will save 407 million metric tons of carbon dioxyde from being released into the atmosphere by avoiding deforestation, he added.

Correa also called for the incoming Copenhagen negotiations in December to address funding for projects that avoid deforestation, such as Yasuni-ITT, and not just those aimed at planting trees. "They shouldn't compensate only forestation but (abstaining from) deforestation," the president said.

-By Benoit Faucon, Dow Jones Newswires;