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Kolubara lignite mine, Serbia

People living near the Kolubara mine have suffered for many years from pollution and geological impacts. The mine operator does not provide for a timely resettlement and fair compensation.

 


The EBRD claims that the project helps reduce CO2 emissions. (See full size image.)
Read more in our briefing EBRD support for Kolubara paving the “ash way” for development of Serbia (pdf)

Quick facts

Planned investment: development of a new field in the lignite open pit mine in the Kolubara mining complex (located 60km south of Belgrade, spanning over 600 square kilometres)

Loans: European Bank for Reconstruction and Development (EBRD) - EUR 80 million; German development Bank KfW (EUR 65 million loan plus a grant of EUR 9 million).

Corruption: Several high ranking employees were under arrest in 2011. Allegations of corruption against the project promoter EPS are under official investigation.

Loan approved: The EBRD approved the loan without proper time to assess the loan's impacts on the local population and the Serbian energy sector.

The Serbian energy sector - dominated by lignite and the company EPS

The additional support for EPS by European public banks does not only strengthen its dominant position in the Serbian energy sector. It also directly contributes to the country's long-term reliance on lignite, one of the dirtiest and most climate damaging fossil fuels.

The state-owned energy provider Elektroprivreda Srbije (EPS), owner of the Kolubara mining complex (via its daughter company RB Kolubara), dominates the Serbian energy sector:

  • 69% of total electricity generation in Serbia is based on lignite (2010). 75% of the lignite production is coming from the Kolubara basin.
  • Power plants within the Kolubara/Obrenovac thermal and mining complex produce more than 50 percent of Serbian electricity.
  • The vertically integrated power company has a monopoly in lignite mining, electricity generation and distribution throughout the country.

The company becomes even more powerful through close personal connections between ruling political parties and the EPS management, allowing EPS to influence political decision on the Serbian energy sector to its own advantage. The Strategy for the development of the energy sector in Serbia until 2015 for instance clearly favours the interests of EPS and its coal business.

Future prospects for the energy sector

Lignite, mined in opencast pits, remains one of the main fuels for power generation within the long-term development plans of EPS.

According to official assessments the Kolubara basin has still 2.1 billion tonnes of lignite at disposal in its underground layers. Depending on the dynamics of exploration, Kolubara is expected to produce coal for another 50 years.


Power plants within the Kolubara complex already produce more than 50 percent of Serbian electricity.

More controversies around Kolubara

Corruption in Kolubara

In October 2011, 16 current and former members of the EPS management, including directors of the Kolubara mining complex, were arrested for embezzlement.

The case was already under investigation when the EBRD approved the Kolubara loan and Bankwatch made sure the EBRD was informed. But instead of waiting for the results of the police investigation, the EBRD chose to rush into the loan.

Resettlement of local communities

Local communities are not against coal exploration as such but they are fighting the expropriation of properties and are tired of the pollution from decades of coal development in the Kolubara complex.

Barosevac

Directly affected by the EBRD's project is the Barosevac community. The EBRD's project summary document (PSD) states:

Land acquisition and resettlement was substantially completed in 2008 in line with Serbian legal requirements.

That this isn't the case proved a Bankwatch fact-finding mission to Kolubara in summer 2011:

  • The Barosevac cemetery has not been removed - a precondition for opening the EBRD supported mining field C. None of the landowners have given their consent for the removal of graves.
  • 21 Barosevac households so far not included in the resettlement plans are located only 50 meters from the open pit mine. Despite the heavy impacts from the mining operations (for instance cracks in their homes), these households are not to be resettled and will not receive compensation.

 


Vreoci


An AlJazeera reportage on the issues surrounding resettlement near the Kolubara mines (local language only).

To further develop another mining field in Kolubara (field D), EPS tries to have 1180 households in the village of Vreoci resettled.

Villagers agreed with the Serbian government, that the village will be resettled collectively, but so far, no concrete plans have been established.

Instead, the Kolubara company offers insufficient compensation to households individually. Families are under pressure, live in unhealthy conditions and have been stigmatised in the Serbian media.

In summer 2011, authorities began to excavate bodies from the village's cemetery, ignoring objections by inhabitants and the fact that no agreement had been reached.

The EBRD points out that their loan is not connected to field D. The bank therefore does not feel responsible to ensure a fair resettlement in Vreoci.

But the director of fields C and D has stated in an interview with our campaigner that those fields are technologically and geologically interconnected and that their conceptual separation would be artificial.

 


Is there a way forward?

More detailed recommendations are in our briefing (pdf):
EBRD support for Kolubara paving the “ash way” for development of Serbia

The only proper solution to the range of problems with Kolubara would be not to finance the project at all. Instead, the EBRD could identify investments that counter the dominance of lignite in the Serbian energy sector and that help to increase the share of renewable energy in the country (currently only about 1%, excluding large hydro installations).

In case of the Kolubara investment, the least we ask of the EBRD is to make sure EPS respects the agreement with local communities, prepares a detailed plan for the collective resettlement of Vreoci and offers adequate compensation for families in Barosevac.


For more information, contact Zvezdan Kalmar, the Bankwatcher from Center for Ecology and Sustainable Development (CEKOR), Serbia, monitoring the project's development.

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Latest developments


 

Blog entry | July 22, 2016

For more than 50 years, the lignite mines in Serbia's Kolubara basin have been expanding, effectively engulfing the few small communities living between them. For local residents, whose homes have quite literally been teetering on the brink of the mines, life has become unbearable. But a recent court ruling might be paving the way to a long overdue reprieve for residents who have been promised to be relocated.

Press release | June 9, 2016

CEKOR, as a non-governmental watchdog organisation, has since 1999 strived to promote sustainable development in Serbia and has a strong track record in supporting local communities harmed by development projects to advocate for their rights.

Press release | May 26, 2016

Western Balkan countries are planning investments in wind power, but these are being heavily outweighed by their investments in coal plants, according to a CEE Bankwatch Network analysis launched today. The region’s governments are actively planning 2800 MW of new coal plants but allowing only around 1166 MW of wind power plants to be built.

Bankwatch in the media | December 15, 2015

CEKOR had a meeting with the EBRD Director for Serbia, Daniel Berg, at which the Report on EBRD Complaint Mechanism was considered. In accordance with the undertaken contractual obligations, the EPS should enhance its procedures not only for the case of Vreoci, to which the complaint referred, but also at all locations where it performs business operations.

Balkans, EPS, Kolubara
Bankwatch in the media | December 9, 2015

Beograd -- EBRD je priznao greške načinjene sa EPS-om u okviru projekata izvođenih u Vreocima i od preduzeća se očekuje da unapredi svoje procedure, saopštava CEKOR.

Kako je navedeno na sastanku predstavnika CEKOR-a i direktora EBRD za Srbiju Danijela Berga, organizacija očekuje da EPS ubrza raseljavanje Vreoca, kao i da se angažuje i na društveno odgovornom raseljavanju domaćinstava obuhvaćenih zaštitnim zonama rudarenja u selima Junkovac, Radljevo, Baroševac, Zeoke u kolubarskom i sela Drmno u kostolačkom regionu.

Publications

Briefing | May 26, 2016

All the Western Balkans countries have committed to increase their share of renewable energy by 2020 to reach between 25 and 40 percent of their energy mix, as part of their obligations under the Energy Community Treaty. Yet this is far from obvious when examining their investment plans for new power generation capacity. Governments are actively planning to build 2800 MW of new coal plants with construction cost of at least EUR 4.5 billion. In contrast, these countries are only planning to build around 1166 MW of wind power plants, at an estimated cost of EUR 1.89 billion.

Briefing | May 11, 2016

In October 2015 the independent Project Complaint Mechanism (PCM) of the European Bank for Reconstruction and Development found that the bank breached its environmental and social policy with regards to safeguarding the rights of communities impacted by mining operations of the Serbian state energy company EPS. The EBRD responded by requiring EPS to develop “an overall Resettlement Framework which will apply to all of its activities” and by committing to monitor the implementation of the plan.

Briefing | February 1, 2016

As part of its new EUR 200 million loan to the Serbian electricity company EPS, the European Bank for Reconstruction and Development aims to assist with “identifying opportunities to improve environmental, safety, social, and labour governance and capacity, and on helping EPS to develop a more strategic approach to managing these issues”. As outlined in this briefing, so far the EBRD's fifteen-year partnership with EPS has not brought visible improvements in company practices and it is high time for the bank to prove that its engagement can add value.

Bankwatch Mail | May 14, 2015

Earlier this year, Serbian media reported that the EBRD was considering providing a new EUR 200 million loan for the financial restructuring of the state-owned electric utility power company of Serbia, EPS. The EBRD Director for Serbia, Mateo Patrone, was quoted by B92.net saying that the loan is aimed at helping the financial restructuring of EPS. Meanwhile, the EBRD's country strategy for Serbia, approved by its board of directors last April, highlights the bank's “key role in promoting energy efficiency and renewable energy” for the country.

Study | June 24, 2014

Energy is one of the biggest economic sectors in south-eastern Europe and is set to grow even further with the region moving closer to the EU. The region has high potential for energy efficiency and sustainable renewable energy investments. Yet, as this study illustrates with a number of examples, countries have shown little ability to absorb investments at a large scale without systemic corruption and patronage.

See also an interactive map with summaries for each case at http://bankwatch.org/SEE-energy-corruption