EBRD should not condone illegal resettlements and corruption by investing in Kolubara

Belgrade – Next week, the EBRD is deciding whether to invest 80 million Euros in the Kolubara „environmental improvement” project in Serbia.[1] With the help of this money, state-owned Elektroprivreda Srbija (EPS) will expand lignite production in Serbia at the cost of forcefully resettling local communities. CEKOR and CEE Bankwatch Network urge the EBRD to rethink this investment.

„The EBRD should reject this loan for EPS because it would entail supporting a company whose integrity and corporate social responsibility are questionable at best,” argues Zvezdan Kalmar, Bankwatch Serbian national coordinator. „I personally witnessed the trauma of hundreds of families from Vreoci who for the past two weeks are watching their local cemetery unearthed by EPS under massive police presence. The company is going ahead with its plans to get the coal out from under Vreoci in spite of any human rights considerations: even though the community has not agreed to the EPS resettlement plan, the company — supported by national authorities — is already implementing it.”

Moreover, EPS is currently under investigation for corruption, as allegedly Kolubara management has been implicated in a number of different schemes involving equipment procurement and leasing and the sale of coal. [2] A recent internal audit at EPS itself revealed that serious irregularities committed by company management led to unjustified increases in EPS expenditures to the benefit of private companies. [3] According to the NGOs, the EBRD should not approve a loan to EPS before the official investigation is completed.

Finally, the EBRD should decide against this investment because it will likely support the expansion of coal in the power generation mix of Serbia, while at the same time indirectly limiting investment opportunities in more sustainable and climate-friendly energy developments. Burning coal already produces 70 percent of Serbia’s electricity. EPS is advocating for increased lignite production with an eye to export profits and, given the company’s close connection to several of Serbia’s ruling parties [4], expanded coal production has become a core part of the Strategy for the development of the energy sector in Serbia until 2015. [5] Public financial institutions such as the EBRD should not further encourage locking Serbia into carbon-intensive and coal-dependent development.

For more information, contact:

Zvezdan Kalmar
Bankwatch Serbian national coordinator
zvezdan@bankwatch.org
+381655523191

Piotr Trzaskowski
Bankwatch energy coordinator
piotrt@bankwatch.org
+48509162988

Notes for the editors

1. Project Summary Document: http://www.ebrd.com/english/pages/project/psd/2002/27005.shtml

2. National television channel B92 aired a series of documentary films exploring the nature and extent of the misuse of financial and other resources at the Kolubara complex and the financial and political repercussions. Links available via: https://bankwatch.org/sites/default/files/Briefing-KolubaraLignite-20Jun2011.pdf

3. http://www.b92.net/eng/news/politics-article.php?yyyy=2011&mm=02&dd=02&nav_id=72487

4. See the composition of the EPS board: http://www.eps.rs/onama/boardofmanagement.htm

5. See the Serbian energy strategy until 2015: http://www.euractiv.rs/odrzivi-razvoj/1938-bela-knjiga-eps-a-predstavljena-u-beu.html