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
Despite heavily increasing investments in green projects in recent years, the EBRD still lacks an effective system for safeguarding human rights.
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.
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.
EBRD’s Crisis Response
The EBRD has responded promptly to the pandemic and the war in Ukraine with solidarity and resilience packages, as well as policy advice and analysis of best practice in areas such as occupational health and safety, digital governance, migration and support for refugees. The bank needs to ensure robust due diligence for its crisis response investments and compliance with transparency, sustainability and integrity standards.
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.
FEATURED PUBLICATIONS
Comments on the draft Environmental and Social Policy
The EBRD’s safeguards revisions demonstrate some progress. The draft policies largely strengthen client requirements, but the EBRD must enhance its own environmental and social due diligence, particularly on human rights, to prevent human rights abuses through early-stage risk identification and effective mitigation.
Civil society joint statement on the EBRD’s draft safeguards
Despite some improvements, the latest drafts of the EBRD’s updated good governance policies fall short of ensuring that human rights are respected and protected, especially in countries with significant democratic deficits. In a joint statement, 60 civil society organisations urge the EBRD to enhance its human rights due diligence.
Can the EBRD deliver effective sustainable infrastructure in the transport and municipal sectors?
This briefing makes recommendations aimed at contributing to the preparation of the EBRD’s new Sustainable Infrastructure Strategy for the period 2025 to 2029, which will merge the EBRD’s Municipal and Environmental Infrastructure (MEI) Sector Strategy and Transport Sector Strategy into one updated document. The information shared in this briefing is drawn from Bankwatch’s on-the-ground experience with EBRD investments in Armenia, Bosnia and Herzegovina (BiH), Georgia, Kyrgyzstan, Serbia and Uzbekistan.
EBRD PROJECTS WE MONITOR
Indorama Agro: Uzbekistan’s infamous cotton producer
Despite being Uzbekistan’s largest cotton producer and receiving millions in development loans from the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank (ADB) and the International Finance Corporation (IFC) – institutions that promote modernisation and corporate responsibility – Indorama Agro faces multiple complaints of worker mistreatment and retaliation.
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Zarafshan, Bash and Dzhankeldy wind projects, Uzbekistan
The first large wind projects in the Central Asian country are being built in biodiversity hotspots and hinder the declaration of protected areas. The IFC, EBRD and ADB need to ensure that some of the most problematic turbines are moved away.
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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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LATEST UPDATES
Dispute resolution agreement on Zarafshan wind project
Publication | 3 December, 2025A dispute resolution agreement was signed by CEE Bankwatch Network and Shamol Zarafshan Energy Foreign Enterprise LLC in October 2025. The agreement is the result of a year-and-a-half-long dispute resolution process supported by the Compliance Advisory
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Corridor Vc in Bosnia and Herzegovina: Environmental and social impacts can no longer be ignored
Publication | 17 October, 2025The EU’s flagship infrastructure project in Bosnia and Herzegovina – the 330-kilometre Corridor Vc motorway – now stands at a critical crossroads. To date, only one-third of the corridor has been completed, financed through more than EUR 3 billion in loans and grants from the EU, the EIB, and the EBRD.
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EBRD’s toxic bond with Indorama: Funding polluter in Georgia’s shrinking democracy
Blog entry | 30 September, 2025The European Bank for Reconstruction and Development (EBRD) continues to back one of its most controversial clients in one of Europe’s most troubled democracies. Human rights, labour laws, and the environment are all at stake.
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