NGOs to EIB and EBRD: Mistakes like Šoštanj must not happen again

27 March 2013, Energetika

Yesterday, 20 March, Focus Slovenia, CEE Bankwatch Network and 96 other NGOs sent a letter to the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), calling on them to never commit to such a misguided loan as they had with Slovenian lignite plant Šoštanj 6.

“In the last two years, we have seen the EIB and the EBRD, which had committed to covering approximately half the costs of the unit, become increasingly embarrassed by this project, but at the same time seemingly not managing to find a legal way to extricate themselves out of it,” says Lidija Živčič of Focus. She explains the aim of this letter is to call on the banks to take measures now in order to avoid financing controversial project like Šoštanj 6 in the future.

The 98 NGOs that signed the letter addressed to the presidents of EIB and EBRD suggest a set of measures that need to be taken by the banks immediately in order to avoid such mistakes from being repeated in the future. According to them, the banks should ensure that the new Energy Policies (both institutions are now in the process of revising their energy policies) prioritise the use of public money “for financing energy efficiency and sustainable renewable energy and prevent its use for financing fossil fuels, especially coal”, and “examine more carefully project alternatives instead of accepting project sponsors’ claims that none of them are viable”. They should also “ensure that wide public participation on large and potentially high-impact projects takes place at a stage when all options are open”, and include “into all financing contracts a clause stating that funds will not be disbursed in case of ongoing national or European level fraud or corruption investigations”.
Kosovo C “strikingly similar” to Šoštanj 6

“The EBRD is preparing to finance other coal projects across Central and Eastern Europe, the most notorious being the new lignite plant Kosovo C close to Priština, in which the EBRD has expressed an interest recently,” underlines Pippa Gallop of CEE Bankwatch Network. According to her, Kosovo C looks strikingly similar to Sostanj 6 in that it would prevent Kosovo from making a transition towards a more energy-efficient and renewables-based economy. “The EBRD must wake up to realise this before it turns itself into the bankroller of disastrous energy projects across the Balkans,” she adds.