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EU funds in people’s hands. When small things make a difference.


In the beginning of this year, Bankwatch announced the winners of its competition for sustainable EU funded project ideas. Although the competition had ended, just ending our involvement there was out of the question for us, impressed as we were by the project ideas and the people’s dedication to make these become reality. So we accompanied the initiatives and offered our support.

“Small things make difference” was the competition title in Croatia and this is what happened now in the city of Karlovac. What had just been an idea in October 2012 is now being put into practice: On 28 May, the local NGO Eko Pan – one of the three award winners from Croatia – presented its cargo bike which collects used paper from households, residential buildings, offices and companies from the Karlovac city area. The whole project was financed with the 1000 euro prize money from Bankwatch’s competition. [*]

Eko Pan’s manager Valentina Mesarić explained:

“The whole project design came as result of daily questions from people and businesses about possibilities for a separate paper waste collection. The current recycling spots in the city are not comfortable to use and many people asked for personalising this environmental service. The door to door collection of waste is an ideal way to make that happen. It is convenient for the clients and ensures high paper recovery and the reduction of landfill waste.”

To be sure the project will be used, Eko Pan – with support from a local flat maintenance company – asked citizens about their need for such a service. More than 100 houses and residential flats responded to the call. They received boxes especially designed for paper collection. Two workers, who have been employed with financial support of the Croatian employment service and its “public works programme”, are now every day collecting paper directly from citizens and transfer it to the local paper recycling company. In first two weeks, the two bike operators collected more than 3 tons of waste paper!

The funds gathered from the service will be invested in new cargo bikes, collection boxes and printing of promotional materials.

For the time being, the project is only in its start-up phase and it wouldn’t have gotten there without the financial support from Bankwatch and the public employment programme. But the feedback so far suggests that the project will be environmentally, economically and socially sustainable in the future. It is just one example but illustrates what Bankwatch meant to show with our competition: Local initiatives have the advantage of being close to their constituencies and clients. Their ideas should be taken seriously if decisions on EU funds allocations are to benefit European citizens and communities.

Large infrastructure projects are not the only choice. Also small things can make difference.


* The competition was funded with the help of the EU’s Europe for Citizens Programme and the European Climate Foundation.

Guest post: New film: Tar sands – to the ends of the earth


cross-posted from Friends of the Earth Europe’s website

The documentary shows how Madagascar’s rural population and its fragile eco-system will be devastated if oil companies start exploiting tar sands in the country. The film documents campaigners from Friends of the Earth Europe, USA and Madagascar travelling to Canada to witness the devastating impact that tar sands are having in the only country where they are currently commercially exploited. One of the Danish Members of European Parliament (MEP) who attended the screening, Anna Rosbach recalled her memories of visiting the Canadian province of Alberta: “I was frightened when I saw the tar sands.”

Elder Francois Paulette, representative of the Dene First Nation, gave an account of the local consequences of the tar sands extraction, “One of the biggest changes we are noticing is the quality of water in our rivers. We regularly catch deformed fish and are afraid to drink the water from the river.”


A French version is available on Friends of the Earth Europe’s YouTube channel.

In the discussion following the screening, MEPs vowed to keep fighting for a strict implementation of the Fuel Quality Directive, which will regulate transport fuels in an attempt to reduce emissions from the transport sector. There has been a fierce battle about the accurate labelling of the greenhouse gas intensity of tar sands extraction, with the European Climate Commissioner Connie Hedegaard and the European Parliament on the one side, and the Canadian government and oil lobbyists on the other.

The liberal democrat MEP Fiona Hall said the film showed “why action now is so important” and pledged to keep fighting for a higher greenhouse gas value of oil derived from tar sands.

The social democrat MEP Linda McAvan explained the rationale of the parliamentarians: “We as MEPs have been fighting to have the tar sands properly labelled. We label other things as they are, such as food. They should be labelled just as they are.”

Until now, it has mainly been pressure from Canadian lobbyists that have prevented the implementation of the directive. Green MEP Satu Hassi told the audience that the pressure exerted on European law makers by Canadian officials was unprecedented: “I don’t think I have seen any government lobbying as aggressively as the Canadian government. I feel it is quite exceptional the way they are behaving.”

The director, Christopher Walker, and Holly Rakotondralambo, a Malagasy environmentalist who features in the film, said they were happy with the reactions to the documentary and the solidarity that MEPs expressed with the struggling communities.

The social democrat MEP Vittorio Prodi described the film as “a very impressive documentation of how invasive these [tar sands] technologies are.”

Christopher spoke of his experiences of filming in Madagascar and the problems they encountered with the multinational oil company that holds the exploratory licenses: “One of the basic problems was that the company wouldn’t grant access to the sites. We were accused of not having a permission to go onto the land. They also sent people to intimidate members of the local community who spoke to us.”

Reflecting on her visit to the Canadian tar sands region, Holly said “It was very sad to see the tar sands and I’m worried that something like this could happen in Madagascar. Canada is a developed country, so the government has advanced policies and the ability to regulate companies. In Madagascar we don’t have the capacity to regulate the extractive industries.”

Holly explained that the documentary will be used as an educational tool in the affected communities because there is very limited knowledge of the huge impacts tar sands exploitation could have. She will help to translate the film into Malagasy in the next days to make it accessible for the local communities.

Shale tale: Unconventional gas and the European Bank for Reconstruction and Development


In February this year the EBRD’s managing director for energy and natural resources, Ricardo Puliti, welcomed Shell’s move into Ukrainian shale gas, with a twist on energy independence for the country, while inviting smaller companies to follow Shell for the crumbs. While this doesn’t mean that the EBRD will finance Ukrainian shale gas operations, the invitation may be an indication of EBRD positioning, where it sees itself making some business.

In May, statements from the EBRD’s top banker in Poland, Lucyna Stanczak, gave us more reason for concern. Stating that shale gas is one of the priorities of Poland’s energy policy, she said that the bank could not ignore it. As Reuters reported, the EBRD plans to include shale gas operations in its upcoming country strategy for Poland for the coming three years.

Leaving aside the very controversial debate on shale gas in Poland, my prediction is that at the end of the day, the economics of shale gas (pdf) – which look less and less convincing – will most likely prevent the EBRD from joining such projects. What is this blog post all about then, you ask? In my view, the EBRD’s pitches into shale gas undermine the bank’s efforts to be seen as a responsible investor that chooses the least damaging option.

Considering the water contamination and the (not so small) carbon footprint of shale gas, one can argue that lignite is less damaging. Should this be an excuse then for the EBRD to go and continue financing lignite projects like the Sostanj power plant? Rather not. Choosing between one very harmful fossil fuel and another is a false choice when one should be concentrating on energy efficiency and sustainable renewables. Yet for a “down-to-earth” institution like the EBRD, a marginal improvement can be good enough, as long as it is economic feasible. Business is business, after all.

The EBRD’s energy policy, applicable to all its countries of operation, is currently being revised, with a draft to be open for consultation in June or July. The European Investment Bank is also expected to publish its draft energy policy in June. With statements like these on shale gas (or like others on coal), I’m very curious to see what these European banks have in stock for climate action and public benefit.

[Campaign update] The reality of resettlement in Kolubara: Out of the frying pan into the fire


During a recent visit to the headquarters of the European Bank for Reconstruction and Development in Belgrade, Bankwatch staff and journalists met with the bank’s country director and senior advisor for power and energy, Mr. Ian Brown (as reported here and here).

His presentation of the Kolubara lignite mine project included a picture of a beautiful new house, supposedly intended for the people that needed relocation due to the Kolubara mines expansion, aided by an EBRD loan. On enquiry, Brown confirmed that the type of house (which looked almost like stock photography) was only an illustration of the resettlement in Vreoci, a village adjacent to a mining field that the EBRD – as it often points out – did not support.

It wasn’t entirely clear to us whether we had seen the picture of an unrelated house or really the new home of a resettled family. [*] But we had a hunch that this beautiful house may not represent the situation for all resettled people.

A few days ago we met Selimir Milutinović from Radlievo, who was relocated to a nearby spot by the Kolubara mines. The house that Selimir was resettled to was a far cry from what Mr. Brown had shown to us. It is an old house left behind by someone else. The cracks in the house (due to the mining works) are clearly visible on the images we took (see below).

Selimir told us the mining company still owns the house but doesn’t want to invest in its renovation. Neither does Selimir, since it is not his property.

We have already heard from the EBRD that they appreciate on-the-ground information that NGOs like Bankwatch provide. But the EBRD is the one dealing out about 80 million euros to the project company EPS, a wildly controversial company. It should therefore not shy away from assessing the real situation, even if it means uncovering some unpleasant truths about their client EPS. Instead, by showing an archetype resettlement case (realistic or not) from Vreoci, the EBRD is supporting EPS’s claims that they are carefully adhering to international standards for resettlements. If the EBRD really wants to offer “additionality” by improving social and environmental standards, it has to exercise pressure, not bury its head in the sand.

The real situation


[*] Update (June 4, 2013): The text has been updated to reflect that the house presented by Ian Brown was not necessarily stock photography, but an illustration for resettlements that the EBRD had not been involved in.

Campaign updates are a new feature on the Bankwatch website intended to highlight news from projects we monitor as well as from our member groups and partners.

Face the future: Members of European Parliament discuss energy lending of European public banks


Cross-posted and slightly edited version from the Counter Balance blog.

“It’s your energy” goes the slogan of Electrabel, Belgian’s primary energy company. But of course that’s not true. If it was my energy, most of it would not be generated in the first place and what I used would not come from nuclear power plants, coal or other kinds of fossil fuels. Ownership over energy implies having a say in how it is generated – given the different impacts of different energy sources – and as well managing the eventual profits.

It is one thing for such misleading claims to be included in advertisements, but it is entirely another when you realise publicly-owned banks like the European Investment Bank and the European Bank for Reconstruction and Development – which finance a great deal of our energy infrastructure – spend public money to finance outdated forms of energy generation like coal and other fossil fuels.

Now is the time for the banks to change course as both are currently reviewing their energy policies. Since most of these processes happen inside the banks behind closed doors, Bankwatch and Counter Balance decided to broaden the debate by holding a public event earlier this week in the European Parliament. Hosted by Parliamentarian Sabine Wils with the attendance of other MEPs and civil society organizations, the event was particularly noticeable for those not in attendance, namely the the EIB and EBRD. In spite of advanced invitations to attend, the banks apparently deem earlier consultations as sufficient forms of public debate.

But the implications of the banks’ energy finance needs urgent attention given warnings about limiting global temperatures to two degrees. This means greenhouse gas emissions should come down in Europe by 95 percent by 2050, with two thirds of proven fossil fuels to remain in the ground, and massive investments are needed in energy savings and the generation of renewable and sustainable energy sources – quite a tall order given the current policies in place at the bank.

Two European public banks are currently reviewing their energy lending policies. We call for an end to coal subsidies.

Data, demands and expert comments

From across Europe, the case against coal

Against this backdrop MEP Claude Turmes warned during the event, “Any new coal fired power plant is a disaster, especially if financed with public money.” Investment in fossil fuel related infrastructure will increase the weight of fossil fuels in our energy mix for at least another 40 years.

While the EIB and EBRD have increased investments in renewables and energy efficiency in recent years, their continued investments in fossil fuel projects undermines their claims as leaders in the fight against climate change. For instance EIB president Werner Hoyer said that the Sostanj lignite power plant, in spite of swallowing all of Slovenia’s carbon budget until 2050, “is not a bad project.” Also the head of energy at the EBRD Ricardo Puliti has labelled disinvestment from carbon intensive projects as “ideological”.

To highlight the schizophrenia of the banks’ energy lending, the event brought together testimonies from across Europe of the damaging coal-fired power plants the banks financed or intend to finance. Lidija Zivcic from Slovenian NGO Focus pointed to the harmful environmental and social impacts of the Sostanj plant, which is being supported by both the EIB and EBRD and currently facing corruption investigations by Slovenian officials and the EU’s anti-fraud office

Further south in Greece, Michalis Prodromou of WWF Greece discussed the Ptolemaida lignite plant (pdf), which the EIB is considering for financing in spite of the project’s disastrous impacts on human health and the environment. While it is often argued, particularly in a climate of austerity in Greece, that the project will create jobs, Prodromou debunked this myth, highlighting that the project would create only a limited number of jobs compared to the photovoltaic sector which already employs 20 000 people in Greece at the moment.

Finally Arberesha Loxha from the Kosovo Civil Society Consortium for Sustainable Development (KOSID) in Pristina explained the problems with the 600 MW lignite Kosova e Re project. In a country 95 percent dependent on coal for its energy mix and in spite of local opposition to the project, public financing from the World Bank, the US and likely the EBRD is unacceptable. MEP Ulrike Lunacek, who was at the event and has visited Kosovo many times, is concerned about the environmental and social consequences of the project. She highlighted the political interests pushing this project forward. “Looking at sustainable alternatives in line with EU long term climate objectives is the best way forward,”, she said.

The event in Parliament also showed that coal is not the only problematic energy sector in which the banks are investing. Olexi Pasyuk from the National Ecological Centre of Ukraine presented the case of an EBRD loan for so-called safety upgrades of nuclear power plants in Ukraine. Although the EBRD denies its loan is related to the extension of the plants’ operations, twelve units that are supposed to be closed before 2020 will most likely operate for another 20 years. NECU is asking that the banks put an end to supporting any extension programmes (both lifetime and capacity).

The responsibility of the Commission

Investments in coal by the EIB and EBRD also contradict the mandate given to the banks by the European Commission, who is a shareholder in both. In reply to a written parliamentary question from Bas Eickhout, another MEP present at the event, the Commission called on the new EIB energy policy to

“reflect the EU energy policy priorities which have been identified inter alia in the Europe 2020 Strategy, the Energy Infrastructure Package, the Energy 2050 Roadmap – in particular the “no regrets” solutions (infrastructure, efficiency as well as renewables, phasing out of harmful fossil fuels subsidies) – and the recently adopted Green Paper on a framework 2030 for climate and energy policies”.

Referencing the EU’s long-term climate objectives and the need to phase out fossil fuel subsidies is a step in the right direction for the Commission in asserting its interests at the bank and those of the European public it executes for.

Time to face the future

The event provided substantial inputs for the banks to consider in revising their energy policies. How much of it will be taken into account is uncertain, but the purpose of this roundtable to invite democratic debate in the Parliament and engage MEPs on the issue is an important first step.

As the new energy policies are being drafted in this moment, much can still be done.

  • First we should recognise that divesting from coal is not unrealistic – both the Nordic Investment Bank (pdf) and Agence française de Développement no longer fund coal-related projects.
  • An important discussion is unfolding in Brussels about the EU’s mid-term climate targets until 2030, those discussions are not currently taking place within both banks.
  • The Commission must play a key role in pushing the banks to adopt a more progressive stance to support the people in the countries where they operate. The event identified an unwillingness of the Commission to hold the banks accountable, particularly when it tacitly approves the types of harmful projects described above.
  • The European Parliament should also urge the Commission to exercise its responsibilities at the banks – through its Board representatives – by blocking provisions in the draft energy policies enabling funding for coal.

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More on our campaign for an energy lending for people and planet >>>

Victory for civil society as EBRD cancels loan for controversial Croatian dam

Today we’re relieved in Zagreb as one energy project that could have had a destructive impact on Croatia’s future has lost its financing and thus its chances of going ahead are drastically reduced: I’m speaking about the infamous Ombla dam, a project for an underground hydropower plant that would have practically destroyed a protected area close to Dubrovnik.

Yesterday, the project developer, state energy company HEP, announced that the main financier of the future dam, the European Bank for Reconstruction and Development (EBRD), pulled out. Although an official reason was not given, it is clear that it was because of the project’s serious impacts on biodiversity.

Ombla had attracted widespread criticism from civil society groups and experts due to its impacts on the Vilina Cave – Ombla Spring protected area, which is home to 68 identified cave species, of which as many as 14 species are endemic to this site alone.

Uncertainties about the technical and economic credentials added to the widespread criticism of the project, as did the chaotic project development procedure, including the use of an old 1999 Environmental Impact Assessment and public consultations taking place only as a cosmetic measure long after the legal permits had already been issued.

In November 2011, the EBRD approved a loan of EUR 123 million for the new plant (whose total costs are estimated to reach EUR 152.4 million) on the condition that a nature impact assessment was completed before disbursement. When this study came out in March this year, it showed that the project could harm many of the 68 identified cave species, including the endemic ones.

Together with our colleagues from Zelena akcija in Zagreb, we’ve been for more than a year and a half explaining to the EBRD that the project comes with too many environmental costs and too much uncertainty about its economical and even technical feasibility to be promoted by a public institution.

We are very heartened that the bank was brave enough to pull out of this ill-fated project. We also hope that the EBRD will have learnt something from this experience: as the EBRD revises its Energy Operations Policy and its Environmental and Social Policy (both these revision processes are ongoing at the moment), it must make sure to include in the new blueprints criteria that will ensure the true sustainability of hydropower projects the bank finances in the future as well as their full compatibility with EU legislation.

Update: In its response to the open civil society letter, received on June 4, the EBRD confirms its withdrawal from the project. Download the response as pdf.