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EBRD soldiering on in Egypt


The US government may have decided in early October to suspend – at least temporarily, and following the ousting of President Mohammed Morsi in July and the subsequent crackdown on his supporters by the Egyptian military – much of the USD 1.3 billion in military aid it provides to Egypt, yet the European Bank for Reconstruction and Development (EBRD) swiftly confirmed that it is sticking to its course in the troubled north African state.

Speaking to the Wall Street Journal during October’s World Bank/IMF meetings, EBRD president Sir Suma Chakrabarti made clear that EBRD shareholders, including the US itself, had no plans to pull the bank out of Egypt in spite of the recent further instability there.

“It’s not business as usual as if nothing’s changed, because clearly our major shareholders are thinking about this issue, but at the same time nor is it ‘stop doing what you are doing,'” commented Chakrabarti, while talking up the country’s investment potential.

According to the Wall Street Journal,

“Mr Chakrabarti said both Eastern Europe and North Africa would attract greater investment if they made further reforms to liberalize their economies, including privatizing state-owned assets.”

Speaking to Bankwatch, however, Adam Hanieh from the Department of Development Studies at SOAS in London and author of the recently published ‘Lineages of Revolt: Issues of Contemporary Capitalism in the Middle East‘, takes issue with such prescriptions.

“Despite claims to the contrary,” Hanieh points out, “the EBRD’s explicit perspective on privatization and liberalization confirms that there has been no major shift from ‘the business as usual’ attitudes of the major international financial institutions. These policies have wrought enormous damage on the vast majority of the Egyptian population, and they will undoubtedly continue to do so. There can be no real way forward that satisfies the needs of the poor until the country breaks substantively with the neoliberal trajectories of past regimes.”

Even before the events of July, involving hundreds of deaths and more bloodshed across Egypt, a report from the European Court of Auditors identified the failure of one billion euros of EU aid to do much for post-2011 ‘Arab Spring’ Egypt, and certainly not the enduring, precarious human rights situation.

Moreover, as part of a recently convened United Nations consultation to gather critical analysis from civil society on the UN’s post-2015 development agenda (pdf), Arab civil society networks have made it plain that the post-2015 agenda “should constitute a major departure from the prevailing development model pursued in the region over the last three decades.”

According to submissions provided to the UN consultation, and sharply critical of the “policy package of [international financial institutions, such as the World Bank and the IMF] involving typically liberalization, deregulation and privatization, export- and foreign investment-led growth”, Arab civil society participants to the consultation maintained (pdf)that

“people in the Arab region were motivated to take to the streets not only by the undemocratic and corrupt nature of the regimes in place, but also by the sense of social exclusion and exploitation resulting from the development policy orientation that had been pursued under these regimes – often at the instigation of external partners, including international financial institutions.”

EBRD added value?

If you’re wondering exactly what the EBRD has to offer Egypt – and, indeed, more generally its other countries of operations – the publication also in October of Publish What You Fund’s 2013 Aid Transparency Index confirmed more worrying EBRD trends.


The EBRD has been ranked among the worst for its transparency performance. (Click image to see in full size.)

In its assessment of the transparency of multilateral institutions, Publish What You Fund was condemnatory of the EBRD:

“Multilaterals as a group do well in the Index, with 13 of the 17 placed in the very good, good or fair categories. The average overall score for multilaterals (53%) is significantly higher than the overall Index average (33%). […] The EBRD is the lowest ranking multilateral, scoring only 24.5%, reflecting the lack of comprehensiveness in the publication of organisation and activity-level data. The EBRD is the only multilateral agency that does not publish any information systematically in machine-readable formats.”

Significantly, bearing in mind the bank’s aspirations and new role in north Africa, when it comes to transparency – surely a hugely important concept in Egypt right now, given the prevailing circumstances – the EBRD is lagging far behind the African Development Bank’s 63.7 percent in Publish What You Fund’s ‘good’ category, raising doubts about the standards the EBRD is bringing to the north African region.

Love us – we have taxpayers’ money at our disposal

But the EBRD has money. Quite a lot of it. Mostly our money. And thus is in demand, if a recent Tweet from Sir Suma is anything to go by.

Greece, Portugal and Cyprus, if the Tweet is not just a piece of vanity micro-blogging, may now be on the EBRD’s radar. It’s certainly an interesting prospect for a bank set up – specifically – to assist post-communist states adjust to and ‘get with’ market discipline, to now be considered as a panacea for countries that have been so ravaged by market disciplinarians.

With unemployment levels spiking in eastern Europe some 24 years after the fall of the Berlin Wall, it is surely highly inappropriate to call on the same doctor to administer the same tonics in north Africa and – maybe now – southern Europe that have kept so many eastern European economies in critical condition (pdf).

Guest post: End to UK coal investments overseas welcome – but it must include Kosovo


This article first appeared on KOSID’s blog and has been reposted here with kind permission by the author.

Amid the frustrating news coming out of this week’s climate summit in Warsaw it’s refreshing to see that the UK government has finally come out with a clear statement on its intention to halt investments in coal overseas, joining the US and Nordic countries who expressed similar commitments in September this year as a step in fighting climate change.

Nevertheless, as our enthusiasm about the US’s announcement was tempered by indications that it may still make an exception for the planned Kosova e Re power plant, we would urge the UK to make a public commitment that it will not support this project.

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Background information and more news on the Kosova e Re lignite power plant

Kosova e Re does not fulfill any of the criteria, which outline the conditions for a country to be considered as an exception rare case. Kosovo is not one of the world’s poorest countries, not all the alternatives have been exhausted, and it is unlikely that Best Available Techniques will be used.

This should be taken seriously by the UK government, when considering decisions of the World Bank and EBRD on whether to invest in a 600 MW coal-fired power plant in Kosovo. Kosovo is currently producing 98% of its electricity from lignite, and only 2% comes from a small hydro plant. With a high level of technical and commercial losses which reach about 40% of the total production, investment in large, inflexible generation capacities is not necessary. Energy efficiency must be the first step to be implemented.

The EU countries should help Kosovo reach its targets on renewable energy capacities (25% by 2020), which are freely available and would diversify the energy mix in the country. This would contribute to the EU’s policy of de-carbonization of the energy sector and join other countries in fighting climate change.

Bankwatch joins NGO boycott of COP19

Today, Bankwatch joined other organisations walking out of Warsaw Climate Conference. Under the Polish government’s leadership the talks have utterly failed to address the urgency of the situation. Targets have been unambitious, the interests of the fossil fuel industry have been allowed to dominate the discussions, and there is no new financing on the table for climate mitigation and adaptation. This conference has lost credibility in the fight against climate change.

PPPs a threat to national security, says Czech national security service BIS


Of all the institutions I never thought would be an ally in the battle to ensure wise use of public funds, the Czech national security service BIS has to be pretty high up the list. Yet the very same BIS, in its annual report (pdf) on its activities in 2012, casts its net wider than usual and characterised “the disfunction of the state authorities” and “the operation of regional clientelistic structures” as “two main aspects of organised crime in the Czech Republic”.

Under the heading of ‘Organized crime’, among other issues BIS examined public-private partnerships and

“reached the conclusion that the concept of PPP in its current form, though promoted as an advantageous alternative for public service provision, does not provide a reliable basis for advancing public interests.”

Exposing the myth

Public-private partnerships are not a silver bullet for public infrastructure. Our website Overpriced and underwritten exposes the hidden costs of PPPs.

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The report makes a range of interesting points:

  • Managing PPP projects through hiring external consultants – necessary because of the complicated nature of PPPs and low capacity in public authorities – is expensive and ineffective.
  • It means that those assessing the projects do not necessarily have the public interest at heart and in BIS’s opinion this has contributed to the failure of PPPs in the Czech Republic.
  • BIS also considers the hiring of external consultants a kind of failure of civil servants to take responsibility for the decisions they make, but also says that staffing has not been improved in a way that would allow capacity for project assessment to be built internally.
  • Public budgets can be siphoned off of PPP projects in a manner similar to that observed in EU funds. But with PPPs the danger is greater since it involves long-term contracts and hidden future debts.

BIS singles out Plzen’s ‘partnership’ with companies linked to Škoda Transportation, a.s., in building a new public transport depot for the Pilsen City Transport Company and servicing its vehicles. This project, worth around EUR 450 million, and lasting 29 years, is said to exceed other comparable projects in cost, duration and the degree of risks. Since the start the project has been plagued by doubts about its value for money for the city of Plzen, and in 2012 Transparency International asked the Czech Competition Authority to investigate the deal (pdf).

So what now for the numerous institutions including the European Commission, the European Investment Bank and the European Bank for Reconstruction and Development who continue to foist PPPs on any country that cares to listen? Even if they didn’t mind promoting PPPs when they were ‘just’ poor value for money generators of hidden debt, do they not mind now that they are promoting organised crime?

United Kingdom’s retreat from coal increases pressure on EBRD


The UK government yesterday announced that it would “end support for public financing of new coal-fired power plants overseas” at a press conference on the sidelines of the UN climate change conference in Warsaw.

UK Energy and Climate Change Secretary Edward Davey said in a statement:

“It is completely illogical for countries like the UK and the US to be decarbonising our own energy sectors while paying for coal-fired power plants to be built in other countries.”

This adds yet more pressure on the European Bank for Reconstruction and Development whose new energy lending strategy will be agreed in December and which has been criticised (pdf) for not including strict limits on coal lending in its draft strategy document (pdf) published in July.

The UK joins the United States and five Nordic countries in ending supporting for overseas coal plants, potentially swaying the political balance of board discussions on the strategy as the two are among the bank’s largest shareholders.

Also growing number of financial institutions have announced a divestment from coal and environmental organisations and climate campaigners have urged the EBRD to follow other public lenders, in particular the European Investment Bank in scaling up its restrictions on the dirtiest of fossil fuels.

Either the EBRD could follow the UK approach and halt all investments in coal fired power plants outright or introduce a strict Emission Performance Standard at a level of 350 gCO2/kWh that would all but eliminate support for coal projects. This is a necessary step to help leave sources of CO2 in the ground, a need that was reiterated this week by a group of scientists (pdf) who said that nearly three-quarters of fossil fuel reserves – especially coal – must remain unused to avoid a global temperature rise above 2 degrees Celsius.

The case to quit coal at the EBRD is even stronger when considering how little finance for combatting the effects of climate change actually goes to its countries of operation. A recent interactive publication from the Climate Policy Initiative shows that central and eastern Europe, Central Asia and the Southern Mediterranean receive the smallest share of global climate finance at only about 5 percent in total.


Source: Climate Policy Initiative

Without decisive action to divest from coal, the EBRD is in danger of being left behind by other public and private lenders. Its new energy strategy must be a genuine commitment to the environmental and climate imperatives, rather than only the financial bottom line.

Guest post: “Coughing for Coal” outside the coal industry summit at UN Climate Talks


This blog post first appeared on 350.org and was re-posted here with kind permission by the author.

Organizations involved in the action included Polish Youth Climate Network, CEE Bank Watch, Corporate Europe Observatory, Klima Allianz, 350.org, Tools For Action, and the #Cough4Coal Initiative.

The Polish government, a long-standing opponent of renewable energy and action on climate change, has teamed-up with the World Coal Association (WCA), representing the most polluting corporations in the world, to host the International Coal and Climate Summit taking place on the sidelines of the UN climate talks currently underway in Warsaw.

The conference is a desparate attempt by the coal industry to greenwash their industry–but thanks to the teamwork of activists from across Eastern Europe and around the world, coal is still a dirty word. Our movement’s demand is clear: an immediate phase out of all coal technologies and a shift of investments towards energy technologies that respect peoples’ health, the climate and environment. Dirty fuel sources like coal have no place in a 21st century clean energy economy; this reality can no longer be ignored.

The government and the WCA described the event in vague terms as giving the coal industry “a rare chance” to “be a key part of the climate debate”, a supposed contribution” to the UN climate talks. But the actual agenda of the coal conference is far less deceiving: promoting public subsidies to the dirty coal industry – and thus augment the $544 billion spent on subsidies to the fossil fuel industry in 2012 alone. This summit makes a mockery of the UN climate treaty and of everyone working to combat climate change.

But the summit also highlights how out of touch with reality the Polish government is as a growing anti-coal movement is quickly gaining momentum globally.

Just this year, for example:

Here in Poland, 89% of citizens are in favor of increasing renewable energy production in Poland, according to a recent Greenpeace poll. As many as 73% want the Polish government to be active in preventing dangerous climate change while coal and lignite based energy received minimal support. You can see the full results of the poll here.

Greenpeace put their research into action this morning, dropping a banner off the venue for the coal summit:

All around the world, the climate justice movement is standing up to King Coal. From the fossil fuel divestment campaign to widespread coal protests in places like India and the Philippines, we’re succeeding in beating back the coal industry. The industry is starting to falter in the face of this pressure–and the stark reality that coal has no place in a carbon constrained world.

Today, we’re “Coughing for Coal,” but we’re also cheering for a clean energy future.