Established to promote the transition to market-oriented economies in countries committed to multiparty democracy, the EBRD’s lending often destroys nature and harms communities by failing to conduct proper human rights due diligence and informed public participation.
Alternative news on the EBRD
Harsh economic realities and the discernible trend of democratic retrenchment in EBRD recipient countries suggest there are serious deficiencies in the bank’s overall ‘market-oriented’ approach.
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Background
Created after the fall of the Berlin Wall to promote the transition to a free-market economy, the European Bank for Reconstruction and Development (EBRD) is a leading institutional investor in Central and Eastern Europe, Central Asia and the Mediterranean regions. The bank is unique among multilateral development banks with its political mandate that commits its countries of operation to multiparty democracy, the rule of law and respect for human rights. The bank also has a strong mandate to promote sustainable development within ecological limits in the full range of its activities.
Despite its unique statute, the EBRD invests more than half of its portfolio in countries rated as authoritarian and hybrid regimes by the Economist Intelligence Unit. The bank’s newest Strategic and Capital Framework till 2025 foresees that only half of its portfolio will be green. Although the bank actively promotes a green economy and decarbonisation as key qualities of transition, it still invests in fossil fuels and carbon lock-in.
RAW DEAL: Does the new EU development model mean more of the same destructive mining?
Europe wants to be the first continent to become climate neutral by 2050 and the leader in ensuring that all of the world’s ecosystems are restored, resilient and adequately protected by 2050. The European Union has declared its ambition to halt, and as much as possible reverse, the pressure humans put on the planet’s resources, ecosystems, climate and biodiversity. However, as the green agenda to reach these ambitions becomes more defined, it reveals that despite the long-term goal of reducing the demand for resources and fossil fuel consumption, Europe plans to continue its exploitative model of mining raw materials in the EU and around the world.
Our critique of the EBRD
Although the EBRD aims to align its investments with the Paris Agreement and to invest more than half of its portfolio in Green Economy Transition projects, the bank still invests in fossil fuels. Natural gas is no longer seen as a transition fuel, according to the International Energy Agency, so the EBRD urgently needs to review its energy and to develop a new climate strategy. EBRD’s investments should enable the just transition in our countries and a shift away from fossil fuels dependence and stranded carbon assets to carbon neutral development.
The EBRD has a well-developed and yet ineffective system for assessing political risks and safeguarding human rights. Unfortunately, there are many loopholes in this system that allow for projects to inflict harm on local communities and individuals, as our monitoring on the ground shows. The EBRD needs to plug the loopholes to ensure a watertight operational approach that delivers effective protection and promotion of human rights.
Deteriorating democracy in EBRD countries
The EBRD was given a core mandate to promote a transition to market economy in former centrally planned economies, which was expected to go hand-in-hand with the democratisation of these countries.
Three decades down the road, the state of democracy, the rule of law and respect for human rights are deteriorating significantly in many EBRD recipient countries, whilst the Bank has done little to revisit its engagement.
EBRD PROJECTS WE MONITOR
The Khada Valley, Georgia
The Khada Valley in Georgia brings together exceptional biodiversity, precious cultural and archeological heritage, and mountainous villages which have preserved rich traditions and historical lifestyles. But all of this might vanish if a 23-kilometer road from Georgia to Russia – the Kvesheti-Kobi project – is built.
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Minerals mining and supply chains
Global demand for minerals and other critical raw materials is intensified by the just transition to renewable energy and the digital transformation agenda. Therefore sustainable supply chains of minerals are fundamental to addressing the climate crisis and the Covid-19 crisis that humanity is facing today. The European Union needs to innovate and find solutions to achieve its circular economy and resource use reduction objectives and to meet the demand of EU’s industry and consumers, while still protecting communities and nature threatened by mining.
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Amulsar gold mine, Armenia
Since 2016 the controversial Amulsar gold mine project is being developed by Armenia’s largest foreign investor, an international mining company Lydian, near the touristic spa town of Jermuk.
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LATEST UPDATES
Complaints on controversial motorway project in Bosnia and Herzegovina trigger EBRD inquiry as forced expropriations begin in South Mostar
Press release | 27 April, 2021Local residents south of Mostar fear they could be uprooted by a motorway project financed by the European Bank for Reconstruction and Development (EBRD). With forced expropriations underway, the Bank’s accountability mechanism has now announced it will investigate these concerns.
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Left jobless after eviction from Vinca landfill, Roma begin negotiations with Belgrade after complaint to the EBRD
Blog entry | 22 April, 2021The EBRD’s accountability mechanism has launched a problem-solving initiative to negotiate issues of affordable housing, access to education and income generation for the Roma families that were evicted from the Vinča landfill. In the two years since the eviction, these issues were not addressed, so the EBRD’s mediators will facilitate a problem-solving process between this vulnerable group and the city of Belgrade.
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Half green and half-blind on democracy. As the EBRD turns 30 the vision of its founders is still far out of sight
Blog entry | 14 April, 2021The European Bank for Reconstruction and Development (EBRD) was created in 1991 at a unique moment in history: after the fall of the Berlin wall, the disintegration of the Soviet Union and the run-up for the Rio Earth Summit on Sustainable Development and the UN Framework Convention on Climate Change.
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