Blog entry

NGOs expect Energy Community infringement procedure on Montenegrin coal plant

A group of NGOs active in the Western Balkans has today called on the Energy Community Secretariat to open an infringement procedure against Montenegro for failure to limit the Pljevlja coal power plant’s operating hours in accordance with a Ministerial Council Decision taken in 2016.

Under the so-called ‘opt-out’ regime, the Pljevlja coal plant, which provides around 40 per cent of Montenegro’s electricity, was allowed to work up to 20,000 hours between 1 January 2018 and 31 December 2023 without undertaking additional pollution control measures. After that, it has to either close permanently, or invest in equipment to comply with stricter pollution limits for new coal power plants.

These conditions have also been included into the plant’s integrated environmental permit issued in 2018, but the plant has long since exceeded the operating hours and is still operating now.

Health damage by the Pljevlja plant

In 2016, the Pljevlja plant caused, among others, an estimated 133 premature deaths, 2,894 asthma symptom days in asthmatic children, 68 cases of chronic bronchitis in adults, 106 hospital admissions due to respiratory or cardiovascular symptoms, and 39,686 lost working days, with health costs up to EUR 3 million. The impacts are most likely the same or even worse today, as the plant’s sulphur dioxide emissions were even higher in 2018 and 2019 than they were in 2016.

Complying with the Energy Community Treaty is therefore not merely a question of rules, but is imperative to improve public health in the Western Balkans and beyond.

A nasty surprise for the new government

Instead of spreading the available hours evenly over the whole period, the management of Elektroprivreda Crne Gore (EPCG), the plant’s owner, have used them up as quickly as possible. The Energy Community Secretariat has been warning since autumn 2019 that the Pljevlja plant looked set to run out of hours in less than a year, but its warning was not heeded.

After 30 years of the same ruling party, a new government took office in Montenegro in December 2020, and one of the first things that awaited them was the issue of what to do with the Pljevlja coal plant. It was already suspected by that point that it had used up all its hours, but this had not yet been confirmed, and EPCG was less than cooperative in clarifying the situation.

However, Montenegro has now reported its official 2020 operating data to the European Environment Agency as required under the Energy Community Treaty. The data shows that the Pljevlja coal plant operated 7,194 hours in 2020. Combined with the operating hours for 2018 and 2019, which amounted to 13,809 hours in total, this brings the plant well beyond the 20,000 hours allowed under its opt-out regime.

However, instead of taking a stance on closing the plant – at least temporarily, while decisions are taken whether to go ahead with modernisation – and on how it plans to support the workers, the new government has so far continued to peddle a fictional story about negotiating with the Energy Community for ‘additional hours’. However, neither the Energy Community Secretariat nor the European Commission have a mandate to grant this, as it would essentially mean re-writing the Large Combustion Plants Directive.

Modernisation mystery

Closing the plant after having used up its 20,000 hours is imperative, but is only the first step. The other question is whether to close it permanently or to retrofit it. In June 2020 Montenegro’s previous government signed a contract with a consortium led by China’s Dongfang (DEC International) to retrofit the plant to bring it into line with the so-called 2017 LCP BREF, which represents the EU’s latest standards for such plants.

However, EPCG has never publicly proven that such an investment would be economically justified, nor that the planned investments would be technically capable of bringing the plant into compliance. At the time of signing, it was also claimed that this investment would extend the lifetime of the plant by 30 years, which we seriously doubt because the planned works do not include reconstruction of the main parts of the plant, such as the boiler.

The prices for the bids for the modernisation varied very widely, leading both the media and one of the competing bidders, Hamon Rudis, to question whether the winning bid offers an inferior technological solution. Hamon Rudis requested that the selection commission check the compliance of Dongfang’s bid with the technical specifications in the tender documentation due to its much lower price than the other two bids.

The Decision on the selection of the best bid responds that no specification was included in the tender obliging the bidders to submit technical documentation – they only had to provide statements that their offer complied with certain parameters. It is therefore, conveniently, impossible to check the technical specifications of each bid. This leaves very little information on which to assess the technical quality of the winning bid and raises serious doubts as to the quality of the project.

Another issue is that the winning consortium includes BB Solar, a company half-owned by the President of Montenegro’s son, Blažo Đukanović, which, as the name suggests, specialises in solar rather than coal plants.

Therefore, in early April, the Ministry for Capital Investments asked the Public Prosecutor to investigate the tender process, as well as the fact that EPCG used up all its hours in three years instead of spreading them out until the reconstruction project was ready to start.

Modernisation or permanent closure?

Closing the plant is clearly a big deal for Montenegro’s electricity supply, as well as for the affected workers and the wider community in Pljevlja. Furthermore, no preparations have been made to ensure a just transition for Pljevlja, so it is not surprising that EPCG and both the previous and current governments are reluctant to act. But a decision has to be made, and it has to be made soon.

Roughly speaking, there are three options – to close down the plant and keep it closed, to close it down until the modernisation takes place and hope it turns out alright, or to cancel the modernisation contract and relaunch the modernisation project based on new specifications and a new tender.

None of these are easy options. The second one is highly risky for the reasons mentioned above – the modernisation might really not bring the plant into compliance – and the first and third both leave a significant gap in Montenegro’s electricity supply while additional generation capacity comes online and energy savings are made.

The decision needs to be based on a thorough analysis of supply and demand in the coming years, and depends on EPCG’s ability to deliver projects like the Briska Gora solar project and the Gvozd and Brajići wind farms. The data prepared for the forthcoming National Energy and Climate Plan should be of use in this respect.

Also key is the future of the ailing Podgorica aluminium factory (KAP), which in 2019 used 16 per cent of Montenegro’s electricity, as well as Montenegro’s ability to cut its transmission and distribution losses, which amounted to 14.5 per cent of electricity consumed in 2019. Another major factor is the use of inefficient electric heaters for domestic heating, though it is likely to take some years to replace these with heat pumps. If consumption can be cut and generation from solar and wind increased sufficiently, Montenegro may be able to avoid modernising the coal plant altogether.

Irrespective of which decision is taken, workers’ welfare needs to be guaranteed and planning for a just transition in Pljevlja needs to ramp up immediately. So far, discussions on this have been initiated by NGOs, but the authorities, at both the local and national level, need to step up their action to make the process as painless as possible.

Opportunities for biodiversity and environment missed in Bulgarian recovery plan

Next to no public participation

With only one public hearing in November 2020, civil society in Bulgaria awaits the third version of the Bulgarian recovery and resilience plan. After the government presented the first draft at a large event last year, the second version was published at the beginning of February. Concrete proposals for reforms and measures to transform Bulgaria’s carbon-intensive economy into one that respects the climate, biodiversity and innovation were ignored. The recent elections on 4 April further hindered the process as the government resigned without making clear the next steps. The Recovery and Resilience Facility offers a chance for Bulgaria, the poorest country in the EU, to progress with its part of the European Green Deal. With a budget of slightly over BGN 12 billion, or about EUR 6 billion, the Bulgarian recovery plan consists of four pillars: Innovative Bulgaria, Green Bulgaria, Connected Bulgaria and Just Bulgaria. The 34 per cent of the Green Bulgaria pillar allotted to the Low Carbon Economy, Biodiversity and Sustainable Agriculture components makes a good impression at first glance. However, a detailed look uncovers inefficient and business-as-usual measures.

No energy decentralisation, no energy independence

More than 57 per cent of the Low Carbon Economy component is planned for energy efficiency, with a focus on measures for residential, business, state and municipal buildings. Although necessary, the priority given to this measure shows low ambition for a rigorous green transition. All other measures, such as energy-efficient municipal lighting, digital transformation and the development of information systems, low carbon gas infrastructure, pilot projects for green gas and biogas, were given insignificant allocations of the total budget for this component, making sure that transformational change will be highly unlikely.

Deepening biodiversity challenges with Natura 2000

The biodiversity component of the green pillar envisages the development of site-specific conservation objectives and measures for the Natura 2000 network. As the deadline for establishing the conservation objectives expired in 2014, work on this issue is long overdue, especially given the fact that the European Commission has already started an infringement procedure against Bulgaria on the topic. Mapping and calculating the value of ecosystems, ecosystem services and green infrastructure within the Natura 2000 network is the second type of activity within the biodiversity component. It poses the question how efficiently is EU money spent. Mapping of ecosystem services was included in the EU Biodiversity Strategy 2020. Territories outside the network were mapped, with no public information on the benefits of the exercise. However, it is no longer included in the new EU Biodiversity Strategy 2030. The monitoring under the Habitats and the Water Framework Directives could be used to provide some of the information needed. Most importantly, funds could be used for more practical and much needed biodiversity related measures.

In total, biodiversity-related measures amount to only 0.72 per cent of the green pillar, which misses by far the significant funds envisaged by the EU Biodiversity Strategy 2030 for investments in biodiversity and nature-based solutions.

Harmful measures might destroy wetlands

The Green Pillar Sustainable Agriculture component allocates almost 20 per cent for the rehabilitation of state-owned irrigation systems. The refurbishment of pumping facilities, which have been out of use for a long time now, might lead to the drainage of wetlands, causing damage. This measure has no appropriate assessment with the Natura 2000 sites, an obligatory procedure aiming to avoid such risks. Furthermore, the measure is problematic from the point of view of good governance and efficiency: it is an investment without any reform. It is not in line with the strategic document on irrigation until 2030 which envisages an extensive reform programme with many legislative changes, none of which is carried out to date, in addition to the planned liquidation of the beneficiary, a 100 per cent state-owned company with low credibility.

The current version of the Bulgarian national recovery and resilience plan also does not envisage planting a single tree.

The technical guidance on the application of ‘do no significant harm’ under the Recovery and Resilience Facility states that ‘Complying with the applicable EU and national environmental law is a separate obligation’. Therefore, Strategic Environmental Assessment and Appropriate Assessment are necessary and the Commission as guardian of the EU law is expected to insist on it. As the Regulation for the Recovery and Resilience Facility states: ‘The Facility should support activities that fully respect the climate and environmental standards and priorities of the Union…’. We would therefore expect the national plan to support measures that are not covered by the operational programmes under the Multiannual Financial Framework 2021 – 2027 and which support the implementation of the EU Biodiversity Strategy 2030 and the Farm to Fork Strategy. In line with this thinking, Bulgarian NGOs have already proposed to the Ministry of Environment a list of measures that could be included in the recovery plan:

Increasing the share of strictly protected areas;
Connectivity between Natura 2000 sites;
River connectivity (removing unnecessary barriers, construction of fish passes);
Wetlands restoration in line with the measures of the river basin management plans and the National Plan for Conservation of the most important wetlands in Bulgaria 2013 – 2022;
Restoration of agricultural protection belts and riverine forests;
Capacity building in the structures of the Ministry of Environment and Waters and management authorities of protected areas and Natura 2000 sites;
Feasibility studies for biodiversity restoration projects;
Feasibility studies for afforestation, reforestation and improved management of forests to adapt to climate change;
Preparation of seedlings of autochthonous trees for future afforestation and reforestation;
Raising capacity for biodiversity monitoring with volunteers – extend the use of citizen science platforms for biodiversity monitoring.

With a third version of the plan on the way, civil society would expect a revision to the lists of potentially harmful projects, as well as the inclusion of nature-focused measures. This assessment is based on Version 1.1. of the Bulgarian national recovery plan released on 8.02.2021

Half green and half-blind on democracy. As the EBRD turns 30 the vision of its founders is still far out of sight

In the spirit of the time, EBRD shareholders included in the bank’s statute two unique mandates: First, a political mandate stating that the bank will only operate in countries which are ‘committed to and applying the principles of multiparty democracy, pluralism and market economics’ (Article 1, Agreement Establishing the EBRD); Second, a commitment to help its countries to promote environmentally sound and sustainable development in the full range of its activities (Article 2, Agreement Establishing the EBRD).

As the EBRD is celebrating its 30th anniversary today, it appears that the Bank still has a long way to go until it has fully implemented both its democracy and sustainability mandates.

Deterioration of freedom and democracy in EBRD’s 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. The EBRD conducts detailed political assessments and regular monitoring of the state of democracy in order to ensure compliance with its political mandate and to identify areas for responding to evolving developments in its recipient countries. It is unclear, however, how these assessments translate into investment priorities or investment conditions when the Bank operates in authoritarian and repressive states?

The recent expansion in the EBRD’s shareholder base as well as its growing portfolio in non-democratic countries have raised questions regarding the EBRD’s commitment to its political mandate. The fact that Turkey and Egypt regularly top the list of the largest recipients of EBRD funds in recent years clearly demonstrates the EBRD’s willingness to turn a blind eye to the appalling human rights record and undemocratic practices of governments in its recipient countries for the sake of business.

As the democracy situation in the EBRD’s countries of operation has deteriorated, the number of projects and investments in 2020 reached a record high. Bankwatch analysed the data from key freedom and democracy indices and juxtaposed it to EBRD investment data (see table).

Source: EBRD, Economist Intelligence Unit Democracy Index

Eight EBRD recipient countries, which are rated as Authoritarian Regimes by the Economist Intelligence Unit (EIU), have received more than two billion Euro in 2020. Eleven countries, rated by the EIU as Hybrid Regimes, have received nearly five billion Euro.

This means that countries with non-democratic regimes have received more than a half of the EBRD’s record high portfolio for 2020. While most of the EBRD’s financing has been to businesses in the private sector, businesses in authoritarian regimes regularly comply with the political system.

Out of the 39 countries of operation 19 saw an increase in investments in 2020 compared to 2019, however 16 out of these 19 countries saw a decrease in their democratic status in 2020 compared to 2019, according to the data published by the EIU.

Egypt

Egypt topped the list of recipient countries of EBRD investments in 2019 and dropped to second place in 2020 with more than one billion Euro annual investments. Meanwhile, the situation in Egypt has deteriorated drastically.

Egypt ranks among the worst countries in the world on the Economist Intelligence Unit Democracy Index. UN human rights experts have sounded the alarm on numerous occasions regarding human rights violations in Egypt.

A decade after the 2011 nationwide uprising, Egyptians are living under the authoritarian grip of President al-Sisi’s government. Unfree and unfair elections have characterised the rollback of democracy and of the separation of powers in Egypt. Moreover, Egypt’s 2019 NGO law prohibits independence in funding and international cooperation, the only permissible NGO activities are development and social work, in pursuit of social need as defined by the state. Violations of the new NGO law are harshly punished with travel bans and asset freezes of civil society leaders, raising the fear of repression and reprisals among rights defenders, journalists, and civil society groups. Security agencies clearly responsible for severe violation of human rights enjoy near total impunity.

Uzbekistan

Uzbekistan is another top destination of EBRD finance with nearly half a billion invested in the country in 2020. The former EBRD president, Sir Suma Chakrabarti, became an advisor to Uzbekistan’s President Shavkat Mirziyoyev on economic development, effective management and international cooperation.

Despite the reforms declared by President Mirziyoyev, the country remains among the world’s most authoritarian regimes. Freedom House’s Nations in Transit 2020 report gave Uzbekistan receives a Democracy Percentage of 2 out of 100. No genuine political parties operate legally in the country. Despite some releases, the government still holds numerous prisoners on political and religious grounds.

Civil society and the media continue to suffer from restrictions to freedom of speech and barriers to legal registration. For the last 18 years, only one domestic civil society group was allowed to register, while applications from other independent human rights organisations keep being rejected.

Bills seeking to restrict the right to peaceful assembly place excessive requirements on the organisers. Much of the media is still controlled by the government, and websites of independent media and human rights groups is blocked.

Moreover, human rights defenders and journalists continue to be under secret surveillance and are the target of sophisticated phishing and spyware attacks. Recently, the Uzbek Interior Ministry issued a statement threatening journalist with prosecution over LGBTQ reporting. Consensual same-sex relations between men continue to be criminalized in Uzbekistan, and the UN Human Rights Committee confirmed persistent inequality between men and women.

Apart from it, land confiscation, violation of labour rights, economic exclusion and corruption are rampant after the privatisation of the cotton sector in Uzbekistan, including by corporations like Indorama who have been enjoying generous support from the EBRD. Private property rights are largely ignored in the country as can be seen in multiple cases of illegal demolition of buildings, forced eviction and expropriation of houses from the most vulnerable groups.

Walking the walk

To realize its political mandate the EBRD should clarify how it applies the “more for more, less for less” approach in authoritarian countries, especially those which are the bank’s largest recipients. The EBRD should also continue policy dialogue efforts and remind non-democratic governments of the need to ensure safe space for civil society, remove barriers to the registration of non-governmental organisations, including human rights organizations. Lastly, the EBRD should operationalise its commitment expressed in safeguard policies to act in line with the international Human Rights law by improving participatory human rights due diligence for its operations in non-democratic countries.

Half Green

The EBRD’s new investment strategy for 2021-25 includes the Bank’s new Green Economy Transition approach that sets a target to invest more than half of its portfolio in climate action and projects with sustainability elements. The EBRD’s leadership has hailed this new strategy as an ambitious attempt to position the Bank as a green finance champion, although half of its investments will remain business-as-usual.

Half green and half business-as-usual means that the EBRD is roughly EUR 5 billion per annum short of implementing its ‘green mandate’ to promote sound and sustainable development “in the full range of its activities environmentally”.

The EBRD is still to disclose and consult with the public a methodology for alignment of its investments with the Paris Agreement. A fully formed climate strategy is expected no earlier than 2022. The EBRD risks becoming a laggard in comparison to the European Investment Bank that in 2020 declared that it is stopping investments in fossil fuels.

Meanwhile, the EBRD appears completely out of touch with reality by calling its EUR 80 million investment in natural gas in Cyprus “decarbonisation”, rationalising the project as “enabling the transition away from carbon-intensive fuels”.

Another EUR 243.5 million EBRD loan for fossil gas supply to households in Kazakhstan is promoted as a “drive towards a low-carbon and climate-resilient economy”.

The EBRD has also extended a USD 250 million loan for Egypt’s Alexandria oil refinery Green Project in Egypt, a USD 240 million loan for the 900 MW Talimarjan gas-fired power plant and a USD 200 million loan for the 1500 MW Syrdarya plant in Uzbekistan, under the guise of energy efficiency and climate resilience.

Calling oil and gas investments decarbonisation, sustainable and green is nothing short of delusional. It seriously undermines the green half of the EBRD’s portfolio and underscores the need for a robust set of criteria for finance that gets tagged as sustainable. A full fossil fuel exit would be a good start, to demonstrate commitment to climate action and to realize the Bank’s sustainability mandate.

Last chance for Member States to include biodiversity in recovery plans

There is not much time left until the 30 April deadline for countries to submit recovery plans to the European Commission, and biodiversity conservation seems to be completely absent in many of them. The state of nature and biodiversity across the union is in very poor health and the recovery funds can and should be used immediately to address this. Yet, the ambitious goals set in the Biodiversity Strategy 2030 cannot be reached if nature-based projects are underfunded or completely neglected in the recovery plans.

Special guidelines released by the European Commission state that every Member State must plan at least 37 per cent of allocations of their national plan to reforms and investments supporting climate action, including biodiversity measures. Yet, the majority of Member States have failed to fulfil this criteria and many of them have not included even a single measure for addressing nature and biodiversity.

All over Europe, civil society organisations have been closely monitoring the ongoing preparation of the draft plans and, where possible, taking part in public consultations to provide input and expertise.

In March, 27 organisations sent a joint position paper to the environment ministers of EU countries demanding that Member States include more measures for biodiversity and nature protection. The clear lack of measures supporting biodiversity conservation must not be neglected. Countries that choose not to use the Recovery and Resilience Facility to invest in biodiversity may miss the targets set by the European Green Deal and more specifically by the Biodiversity Strategy 2030.

Proposed measures directly focusing on biodiversity and nature protection are very scarce in national plans. What’s more, many national recovery plans include proposals that pose a high risk to biodiversity. Assessments of plans prepared by national organisations show that there are many problematic projects included. They are often presented as green but can in fact be harmful to biodiversity.

For example, a special law on anti-drought investments proposed in the Polish plan aims to simplify investment procedures related to water facilities, in particular retention reservoirs. ‘This makes it much easier to intervene in protected areas, for example by enabling water installations in nature reserves’, says our campaigner. The same goes for plans of building small hydropower plants, which can harm biodiversity by blocking wildlife corridors.

The Latvian plan includes projects connected with commercial forestry actions and forest management methods that are not sustainable. It also includes planned investments in flood risk reduction infrastructure, which threatens to destroy valuable wetlands habitats.

Last week a coalition of environmental organisations joined forces to raise their concerns again and demand EU Commissioners working on climate and environmental matters to take rapid action and to turn their support for protecting nature into concrete action.

In a joint letter highlighting the alarming lack of measures for nature protection, the organisations outlined their demands:

‘Member States must quantify and explain how the RRF will contribute to the implementation of the Biodiversity Strategy, and show how they will address the major gaps in nature and environmental legislation that has resulted in numerous ongoing infringement procedures.’

Member States still have two weeks to drop harmful measures from their plans and include more funds for nature protection. The table below shows a list of measures proposed in national recovery plans that are potentially harmful to biodiversity.

Please note that the above is a non-exhaustive list based on information that we have obtained from our assessments of current draft recovery plans. As new draft plans become updated, we will continue to update this table accordingly upon identification of additional harmful proposed measures.

Saving ‘private’ Rioni: Georgia’s growing environmental protest

One cold evening in October 2020, Maka, Marita, Varlam and some of the other villagers in Rioni valley decided to start spending the night outside, on the bank of the Rioni River, in an attempt to protect it from the construction of a large dam. They said they would protest until preliminary construction on the 424 MW Namakhvani hydropower plant was stopped and its developer, ENKA Renewables (a consortium of Turkish ENKA and Norwegian Clean Energy), left the valley.

The guardians of the Rioni River, as people later called the protesters, have not gone home yet. Taking shifts, they have spent a collective 166 nights outside, sleeping in tents, and plan to continue until their demands are met. The company has not yet left the valley, either. However, the support the people of Rioni have received from the rest of the country has encouraged them to stand their ground.

What started as just a handful of people protesting to save the Rioni River a few months ago has already turned into a national campaign. On the Day of Action for International Rivers, 14 March, thousands of Georgians came from all over the country to join the guardians of Rioni and make history. It was the largest environmental protest in Georgia’s recent past.

‘No to Namakhvani HPP’, ‘No to Dams in Racha’, ‘We protect our homeland’, ‘Freedom for Rioni’, ‘Solidarity from Pankisi’ – these are some of the slogans on protestors’ posters at the rally held in the western Georgian city of Kutaisi, where media said about 22,000 people gathered.

‘We were five people and today we are thousands because we were standing here with the truth… This gives us the hope that the spirit will never die as long as there is at least one person protecting the truth,’

said one of the leaders of the Rioni protest, 28-year-old Varlam Goletiani, in his address to the audience. He added:

‘People from other parts of Georgia take shifts with us to spend nights in Rioni valley. There is not a place left in the country from where they have not joined us. In this state, we are creating a precedent for protests that are managed by utterly clean hearts and spirits.’

The dam which mobilised thousands

The Namakhvani hydropower plant will be one of the country’s largest. Its reservoir’s mirror surface will cover 610 hectares. It will flood parts of Tskaltubo and Tsageri municipalities, including the villages, cultural heritage, unique biodiversity, and some of Georgia’s precious and expensive micro zones for producing Tvishi wine.

The project poses threats to not only the river’s ecosystem and the region’s unique wine, but also to the population of the Imereti and Lechkhumi regions, scientists say. Its development started without any justification of the economic need for the plant, and the preliminary construction works started without the completion of a number of studies required by law. Furthermore, locals have little trust in the investor – one of Enka Renewables’ shareholders, Clean Energy, previously built another large dam in Georgia whose tunnels collapsed.

If the dam is destroyed due to an earthquake or technical failure, a 34-metre-high wave from Namakhvani’s dam could flood western Georgia’s main city, Kutaisi, estimate seismologists from the Institute of Earth Sciences and the National Seismic Monitoring Centre. This is not just an imaginary scenario, but one that could become a reality, given the strong earthquakes that have happened and could happen again in the area. In an official statement addressing the prime minister, the Institute announced that the project’s environmental assessment does not include proper studies and measurements and that it shows the project will not be built to withstand strong earthquakes.

In April 2020, the Georgian government granted ENKA Renewables permission to start preliminary construction on Namakhvani, but the civil society organisations (CSOs) Green Alternative and the Georgian Young Lawyers’ Association have claimed this was against the law. The CSOs have sued the Ministry of Agriculture and Environment of Georgia to annul this permit, because it was granted without the company providing the studies required ‘to identify possible threats to human life and health, environment and cultural heritage’.

The lack of transparency around the project is also what triggered the community’s protest. ‘Environmental decisions for both projects were made in violation of the law, without the proper inclusion and participation of the public’, reads the people of Rioni’s petition against the construction of Namakhvani and another large hydropower plant planned on the river, the Oni cascade.

They continue: ‘Additionally… no cost-benefit analysis has been presented, which is required by Georgian law as a part of the environmental impact assessment report’. The economic side of the project has raised a number of questions. In particular, a contract for the Namakhvani project was published that showed the government of Georgia had undertaken to purchase electricity from a private company for 15 years with a guaranteed high price and that it had transferred a large area in the Rioni valley to ENKA Renewables as private property.

The petition #SaveRioniRiver, which gathered more than 10,000 signatures, was sent to the government and the US and Turkish embassies in Georgia. The authors also submitted it to the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Asian Development Bank (ADB) and the World Bank; however, none of the financial institutions has responded yet. Not even after the dispersal of a peaceful protest in Rioni this February by police; not even after police were again mobilised against the protesters in the valley on 4 April 2021 in an attempt to allow ENKA Renewables to forcefully resume construction on Namakhvani.

In this most recent attempt to end the protest, police blocked the entrances to the protest area near Namakhvani and prevented activists from joining the guardians of Rioni. As of 9 April, the blockade continues. Locals have reported that not only protest supporters, but also people who live on either side of the blocked area are not allowed to pass. Public defender Nino Lomjaria, who visited the area on 8 April, called the blockage an ‘unproportional’ measure that limits people’s freedom of mobility.

Foreign investors and Georgia’s history of failed dams

The company behind Namakhvani HPP has two shareholders: ENKA (90% share) from Turkey, known for construction engineering but with limited experience in hydropower plant construction, and Clean Energy (10% share) from Norway, known in Georgia for building the controversial Shuakhevi hydropower plant, where the main tunnels collapsed two months after it became operational. After three years of repairs, Shuakhevi resumed operation in 2020. However, even after the dam was repaired, a crack appeared in the reservoir, and locals believe that subsequent water leakages in the surrounding villages were caused by the project.

Namakhvani and Shuakhevi are not the only dams in Georgia that have been met with fierce opposition from locals or severe criticism from environmental and human rights groups and international financial organisations.

‘There are the same problems in Enguri valley, in Rioni valley, in lower Svaneti, in Dariali gorge, [with the] Khadori hydropower plant’, Zurab Nizharadze, an activist from Svaneti, told Georgian media during the #SaveRioniRiver protest. Nizharadze has fought against the Nenskra and Khudoni hydropower plants which are planned to be built in Svaneti and are financed by the EBRD and EIB. In 2020, after two years of investigation following the complaints of local activists, the EBRD’s and EIB’s independent mechanisms announced that the Nenskra plant did not comply with international standards. The mechanisms said that both banks had violated their own environmental and social policies.

‘The main problem that we face regarding hydropower plants in Georgia is that the government considers their development as the main answer to the existing challenges of Georgia’s energy sector development, while the country lacks even a strategic plan for energy development. Due to the fact that Georgia is a contracting party of the EU Energy Community, the existing practice of decision-making and supporting hydro projects violates the requirements of the Community, too’

said Dato Chipashvili, representative of the Georgian environmental and human rights CSO Green Alternative.

Biodiversity forgotten in the Latvian recovery plan

In its current form, the draft Latvian recovery plan still has numerous gaps and needs significant revisions. The plan simply ignores biodiversity, and includes a set of highly questionable investments, which if approved, can have a potentially negative effect both on biodiversity and climate. It is also not clear how the ‘do no significant harm’ principle will be respected. This is problematic because the European Commission’s guidelines require Member States to think in terms of quality spending. States should explain how recovery and resilience plans will contribute to wider environmental goals under the European Green Deal, including the objectives of the Biodiversity Strategy for 2030. Several Latvian green organisations, including Zaļā brīvība (Green Liberty), Latvijas Dabas fonds (Latvian Fund for Nature), Pasaules Dabas Fonds (WWF’s associated partner in Latvia), and Latvian Ornithological Society (BirdLife Partner) prepared a joint assessment of the draft recovery plan and submitted suggestions on 9 March to the Ministry of Finance as the ones in charge of preparing the national recovery plan.

Irrigation activities go against biodiversity strategy

The draft plan foresees “Investments in flood risk reduction infrastructure, including renovation of polder pumping stations, renovation of protective dams, renovation of regulated sections of rivers”. This is something that goes against the EU’s Biodiversity Strategy 2030, which aims to put biodiversity in Europe on a path to recovery and contains specific actions and commitments to protect nature and reverse the degradation of ecosystems. At the same time, other EU funds like LIFE and the Structural and Investment Funds for years support activities that go in the opposite direction, including restoration of irrigated areas and wetland habitats (like floodplain meadows and mires).

Irrigation activities are therefore often at odds with EU nature protection and biodiversity policy.

Wetlands also play an important role in carbon sequestration. That is why any draining activities need to be carefully assessed in the context of climate change and biodiversity protection.

Afforestation is not always green and climate-friendly

Another point of concern for biodiversity in the Latvian plan is the foreseen support to commercial forestry actions, including the replacement of unproductive forest stands, afforestation and management of young forest stands. These activities look green and sustainable at first glance but can be very harmful to biodiversity. Replacement of unproductive forest stands means in reality clear-cuts. This forest management method is not sustainable. It is both harmful to the environment and nature. Clear-cuts release huge amounts of CO2 captured in the trees. They also may destroy biologically-valuable forest stands and habitats of EU importance. Clear-cuts are a commercial forest management approach that reduces biodiversity. Also, the thinning of young forest stands is something that is being done in commercial forests after clear-cuts. Such activities serve private commercial interests only and therefore should not be financed by the Recovery and Resilience Facility. Afforestation also seems green at first glance. Yet, it is not so if it happens at the expense of protected grassland habitats. The conservation status of grassland and meadow habitats of EU importance is highly unfavorable, not just in Latvia but across Europe. Therefore, these vulnerable habitats should not be risked by supporting afforestation activities in Latvia and other forestry-oriented countries. Activities promoting harmful forestry models should not be supported by the financial instrument from which 37% is aimed to support climate action.

It’s time to invest in biodiversity

Only 10 per cent of all habitats of EU importance in Latvia are in a good state.

Similarly to the rest of Europe, where 81 percent of habitats are in ‘poor condition’ as a recent European Environmental Agency (EEA) report shows, Latvia faces a dire situation that will only become worse without swift action. The EU’s Biodiversity Strategy 2030 requires significant investments for nature protection in the coming years, meaning urgent reforms and systemic solutions for biodiversity. The Recovery and Resilience Facility can bring funds to address this crisis. Recently 27 environmental organisations have signed a joint position paper on mainstreaming biodiversity conservation and nature-based solutions in the recovery plans. Accordingly, Latvian green organisations have proposed a set of biodiversity and climate-targeted actions to be included in the Latvian recovery plan, many of which can be well applied in other EU countries. The recovery plan should promote sustainable management of private lands as well as the development of existing and new natural areas. It should also help with the implementation of the EU’s Birds and Habitats Directives, EU Biodiversity Strategy 2030 and European Green Deal.

The proposed biodiversity investments must address the following important biodiversity conservation aspects:

Development and management of the network of protected areas of EU importance (Natura2000);
Enhancing connectivity of Natura 2000 sites;
Restoration, maintenance, and improvement of the quality of habitats of EU importance;
Restoration and creation of new wetlands;
Combating invasive species;
Development of nature tourism infrastructure.

Following the Commission’s guidelines on the reform-oriented approach in the development of recovery plans, green organisations have also proposed the development of the so-called ‘Payments for Ecosystem Services’ system. Such a mechanism would enable a voluntary system of payments for ecosystem services. This means that businesses would have an opportunity to make their voluntary financial contributions to the climate change mitigation scheme. These contributions would be then used by landowners, municipalities, businesses, and NGOs to implement climate change mitigation measures and support biodiversity.

The Latvian recovery plan currently lacks ambition for reaching environmental goals and the planned actions do not include any real reforms.

Yet it is still possible to elaborate investments into biodiversity conservation and include these in the plan. This will not only benefit the environment and climate but will also deliver a set of economic benefits to ensure economic growth, job creation, and better health and human welfare. This, in turn, will help to deliver green and sustainable recovery both in Latvia and throughout the EU.

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