Bankwatch

Home > Archives for Press release

Press release

NEW REPORT: Is the EIB too faulty to become the ‘EU Development Bank’?

With the EU actively debating the reshaping of its development role in the context of the current global health and economic challenges and the ‘Finance in Common’ summit kicking off today, the European Investment Bank (EIB) is looking to take center stage as the new ‘EU Development Bank’. But the bank has much homework to do before it can assume that role, a critical report of the EIB’s previous development operations released today by NGOs Counter Balance and Bankwatch shows. 

The full report can be found here: https://bankwatch.org/publication/can-the-eib-become-the-eu-development-bank 

In the report, titled „Can the EIB become the ‘EU Development Bank’?”, the two NGOs – which have been monitoring the bank since 25 years – analyse the EIB’s track record in the development field and offer a series of detailed recommendations for fundamental reforms at the EIB. New policies, as well as improved implementation of existing ones, would enable the Bank to better support partner countries’ development priorities and ultimately become a credible candidate for the “EU Development Bank” seat.

Here are the EIB’s biggest faults, as outlined in the analysis: 

➱ the Bank supports projects that violate human rights because of its failure to conduct proper human rights due diligence; human rights issues have been given a low priority by the EIB Management Committee for years

➱ the Bank pays little attention to the development impacts of its operations. It does not have enough expertise or sufficient presence on the ground to provide genuine added-value outside of Europe

➱ it tends to prioritise an extractivist development model, sidelining infrastructure that would be in line with social and environmental justice

➱ it favours a financing model of leveraging scarce public funds to trigger private investments, de facto subsidising large companies and multinationals and enabling them to make profits in the poorest regions of the world

➱ its use of ‘financial intermediaries’ has been plagued by lack of transparency, insufficient control over funds and the risk of corruption and fraud

➱ the EIB still fails to comply with transparency requirements from its own transparency policy and EU legislation, and lags behind the transparency and disclosure practices of other multilateral financial institutions

➱ due diligence and monitoring of projects’ compliance with the Bank’s own environmental and social standards remains superficial

Xavier Sol, director at Counter Balance and co-author of the report: “At a time of ecological, social, economic and public health crisis, it is of utmost importance that public banks work in the interest of people and the environment. We are alarmed that Europe’s financial arm – the EIB – is not equipped to act as a genuine development bank and actually contributes to human rights violations around the world”.

Anna Roggenbuck, Policy Officer at CEE Bankwatch Network and co-author of the report: “The EIB would have to deeply reform its governance, policies and procedures if it is ever to act as a genuine development bank. At the moment, it simply is not. The EIB lacks expertise, skills, human resources and relevant procedures necessary to deliver development results”.

Aleksandra Antonowicz-Cyglicka, researcher at CEE Bankwatch Network and co-author of the report: “Our analysis shows that the EIB needs to take concrete steps to ensure its operations do not cause harm. For example, adopting a new human rights framework with a sound due diligence system at project level and reinforced environmental and social standards are a prerequisite. We urge European governments, as the bank’s shareholders, to make the EIB a more responsible and sustainable development-oriented institution”. 

Notes to editors

  • On 29 October, 15 human rights and development NGOs sent an open letter to the EIB President Werner Hoyer, spelling out key recommendations for the bank to raise the bar on the promotion and protection of human rights.

For additional information please contact:

Anna Roggenbuck
Policy Officer, CEE Bankwatch Network
annar@bankwatch.org
+48-918315392
+48-509970424

Xavier Sol
Director, Counter Balance
xavier.sol@counter-balance.org
+32(0)4 73 223 893

Aleksandra Antonowicz-Cyglicka
Researcher, CEE Bankwatch Network
ola@bankwatch.org
+48 601325242

Leaked document: Czechia plans to spend EU just transition money on gas and subsidising corporations

The paperwork was reportedly filed to the Czech government October 12. It is meant to become the Czech submission to the European Commission, an indication of how the government plans to spend the Czech portion of the Just Transition Fund. 

Alexandru Mustata, CEE Bankwatch Network: “It is outrageous to see that money meant to be spent by coal communities on transforming their economies in a sustainable direction is going to large corporations, without real consultation of the affected people; and that’s it’s planned to be used on gas projects, instead of renewable energy sources. This is in total defiance of the original purpose of the Fund, and something which the Commission should adamantly reject.”

Czech civil society and local communities in coal regions have been mostly sidelined from the planning process so far: there is no meaningful engagement of local actors, while deadlines for submitting projects have been impossibly short. 

Zuzana Vondrová, Centre for Transport and Energy: “Civic participation must play a primary role in relieving the Czech Republic of its dependence on the coal industry. The plan for spending the JTF money must be prepared transparently and according to clearly defined criteria, such as sustainability, the rate of creation of quality jobs or the effects on quality of life. Not hearing out the needs of the coal regions and their citizens can result in projects which are a bad match for the regions, prolong their dependency on fossil fuels or benefit dubious actors.”

One of the most expensive projects planned in the leaked document is the replacement of boilers in the chemical plant Lovochemie for 6 billion CZK. The company is owned by Agrofert, the agricultural conglomerate on which prime minister Andrej Babiš reportedly built his fortune. 

The document also lists as beneficiaries large Czech corporations like majority state owned ČEZ, Unipetrol – controlled by the Polish government, or EPH holding – owned by billionaire Daniel Křetínský.

Complaint on Bosnia-Herzegovina dams on Neretva river submitted to the Bern Convention

The environmental groups Center for Environment, Aarhus Center Sarajevo, Riverwatch, EuroNatur, ClientEarth and CEE Bankwatch Network today submitted a complaint against Bosnia and Herzegovina to the Bern Convention on the Conservation of European Wildlife and Natural Habitats for failure to protect the pristine upper stretches of the river Neretva from eight planned hydropower projects.

The upper Neretva in one of the most pristine river ecosystems in the Balkans. It is a wilderness area with very little human interference so far. That is why it has been nominated as a candidate Emerald Site under the Convention since 2011, but is under threat from the 35 MW Ulog hydropower plant and a series of seven smaller plants known as the Upper Neretva Hydropower project. The plants would turn most of the upper part of the river – a stretch of around 30 km – into a series of end-to-end dams, pipes and reservoirs.

The submission to the Bern Convention follows a related complaint made by the groups earlier this year to the Energy Community Secretariat, highlighting serious flaws in the environmental permitting processes for the projects.

The environmental impact assessments carried out for the projects identified only a few of the species likely to occur near the site of the plants, but still concluded that the projects could go ahead. Despite the area being inadequately researched, rare species including bears, wolves, otters and crayfish, as well as a specific type of trout are known to find habitat here. 

In May, the Center for Environment also mounted a court challenge against a decision by the Republika Srpska Ministry for Spatial Planning, Construction and Ecology, that no environmental impact assessment was needed for phase one of the Upper Neretva project.  The decision came despite the Republika Srpska Institute for the Protection of Cultural-Historical and Natural Heritage expressing its objection to the planned Upper Neretva project and stressing that rare, endemic and relict species would be affected by the plants. 

“The upper Neretva river is a natural jewel of the Balkans. With the surrounding pristine forests, it forms a wilderness area that is unparalleled in Europe. The dam projects would not only destroy this ecosystem, but Bosnia-Herzegovina would also violate ratified international agreements. That´s why we file these complaints,” says Ulrich Eichelmann, coordinator of the Save the Blue Heart of Europe campaign from Riverwatch.

“According to the research done so far, the area around the source and the upper course of the Neretva River has been confirmed to be an exceptionally intact ecosystem. These projects need to be stopped due to its exceptional value as no mitigation measures could preserve this area,” added Jelena Ivanic from the Center for Environment.

Background information

  • EFT’s 35 MW Ulog hydropower plant, with a 53 meter high dam and 2.7 km derivation tunnel is the furthest downstream of the planned plants. It is currently undergoing preliminary works, with China’s Sinohydro as the main contractor. Work on the plant started for the first time in 2013, but in July of that year, two fatal incidents took place and works stopped. On 4 July a worker from the Prijedorputevi company was killed by a rock breaking off a cliff face while building access roads. Only four days later on 8 July another worker from the same company was also killed by a rockslide, and another worker taken to hospital. After this, the works were put on hold while more research was done, but in 2017 the project was redesigned with the dam slightly further downstream.
  • The seven Upper Neretva hydropower plants are planned by Marvel d.o.o. upstream from the village of Ulog and would have a combined capacity of 15.1 MW. Despite the small generation capacity, one of the dams – Uloški Buk – would be 41-56 m tall (the environmental assessment is unclear).
  • The Save the Blue Heart of Europe campaign aims to protect the most valuable rivers in the Balkans from a dam tsunami of about 3,000 planned projects. The campaign is coordinated by the NGOs Riverwatch and EuroNatur and carried out together with partner organizations in the Balkan countries. The local Partners in Bosnia and Herzegovina are the Center for Environment and Aarhus Center Sarajevo. Find more information at https://balkanrivers.net/

Contacts

In the Balkans, virtual run reveals real problem of air pollution from coal power plants

**High quality photographs from the events will be available on 25 October 2020 from davor@bankwatch.org** Participants in the Lung Run (www.thelung.run) will be fitted with pollution exposure sensors to gather information about air-borne particulate matter, volatile organic compounds, and nitrous oxides caused by exhaust gasses released near coal mine facilities.  While the race was originally planned around the perimeter of the Bitola coal power facility in Novaci, N Macedonia, the competition is now being held virtually due to government restrictions on organising sporting events.  Bitola is one of 16 coal power plants in the Western Balkans that together emit as much sulphur dioxide and dust pollution as the entire fleet of coal plants in the European Union. In 2016, these 16 plants were responsible for an estimated 3 900 premature deaths and 8 000 cases of bronchitis in children and other chronic illnesses. But the extent of the problem is not well known because little official information is produced or reported. Governments do not regularly monitor pollution levels, and in cases where monitoring is done, little to no information is made available to the public.  The Lung Run will address this gap both by collecting air pollution data and as well using the registration fees to purchase pollution sensors for the Novaci municipality. Self exposure monitoring devices will also be distributed to runners and used to track pollution in Croatia and Romania and as well in the northern Bohemian mining region of Czechia. Ioana Ciuta, energy co-ordinator for CEE Bankwatch Network and Lung Run co-organiser, said, “Nowhere in the world is safe from air pollution as long as there is coal power. The Western Balkans stand out in every global measure of dust and sulphur dioxide emissions. Not only are the countries not making efforts to reduce these harmful pollutants, but two – Serbia and Bosnia and Herzegovina – are actively pushing for more coal units. Better awareness about the scale of the problem and pressure from various stakeholders are two things that can prevent the region’s stifling coal addiction.” Davor Pehchevski, Balkan air pollution campaign co-ordinator for CEE Bankwatch Network and Lung Run co-organiser, said, “Living near a coal power plant means living in pollution. It is imperative that locals know exactly what they are breathing. It is their right to know. A permanent solution to lack of awareness is needed, which is why we’re donating sensors from  this race to Novaci.” For more information contact  Davor Pehchevski Balkan air pollution campaign co-ordinator, CEE Bankwatch Network Email: davor@bankwatch.org Mobile: +389 71 264 087 Ioana Ciuta Energy co-ordinator, CEE Bankwatch Network Email: ioana.ciuta@bankwatch.org Mobile: +40 724 020 281

Eastern Europe climate plans struggle to keep pace with EU’s green ambitions

NECPs include the specific policies, measures and investments that each Member State will follow to reach the 2030 climate and energy objectives of the EU. Yet with the Commission upping its proposed emissions reduction target from 40 to 55 per cent, and the European Parliament voting on Tuesday 6 October for as much as a 60 per cent reduction, eastern Member States are woefully underprepared in their climate plans to fulfill EU pledges.

A Bankwatch report from July [2] documented the ways in which both Member States and the Commission could focus scant pandemic recovery funds in the post 2020 EU budget to build on the few positive investments present in the NECPs at the time. Whilst the Commission assessment today is a step towards identifying these positives, it had already concluded in September [3] that eastern Europe’s plans are unambitious and do not involve citizens enough. 

Raphael Hanoteaux, EU funds policy officer for CEE Bankwatch Network, said “These plans are not fit for purpose, and the Commission knows it. We are not on track to hit the updated 2030 target, meaning the NECPs cannot close on the European Green Deal.”

“Now the only way to effectively reach the 2030 and 2050 targets is by focusing on a green recovery and having an ambitious post 2020 EU budget. Business as usual will mean a lost decade for the climate.” 

For more information contact 

Raphael Hanoteaux, EU funds policy officer
CEE Bankwatch Network
E-mail: raphaelh@bankwatch.org

Notes 

[1] https://ec.europa.eu/energy/content/individual-assessments-and-summaries_en
[2] https://bankwatch.org/wp-content/uploads/2020/07/EU-FUNDS-FOR-A-GREEN-RECOVERY-report-_July-2020.pdf
[3] https://ec.europa.eu/info/news/commission-publishes-assessment-national-energy-climate-plans-2020-sep-17_en

Worlds Rivers Day: Save European free-flowing rivers – end subsidies for small hydropower

WORLD RIVERS DAY PRESS RELEASE                                                                                  

Freshwater ecosystems are being lost at unprecedented rates. According to the latest Living Planet Report, populations of freshwater species have declined by 84% since 1970. 

In Europe, 60% of rivers are in bad health, degraded and destroyed by hydropower dams, dykes, drainage canals, pollution, unsustainable sand and gravel extraction, poorly planned navigation infrastructure, etc. It’s the most obstructed river landscape in the world. 

Despite this, on World Rivers Day, which this year falls on September 27th, it is worth celebrating that there are parts of Europe where rivers still run free.

The Balkans is home to some of the last free-flowing rivers in Europe, but they are under attack. Driven by substantial state-sponsored feed-in tariffs for renewable energy production, around 2,700 small hydropower plants are planned across the region, threatening to destroy hundreds of free-flowing rivers and streams – in total, losing more than 5,000 km of pristine rivers.

“Supported by the state, small hydropower development is a major threat to the Balkans’ rivers. It is also fuelling social unrest in the region, as more and more local communities are rising up against small harmful hydropower projects. The time has come for states to end subsidies for the destruction of nature and protect the last free-flowing rivers in Europe”, said Zoran Mateljak, WWF Adria Freshwater Program Manager.

Over the last ten years, the number of hydropower plants under 10 megawatts has quadrupled in Western Balkan countries. Governments have clearly favoured small hydropower development. In 2018, more than 70% of all renewable energy incentives in the region were spent on small hydropower. Yet, despite this, they generated only 3.6% of total electricity.

“The EU has already moved away from feed-in tariffs for all but the smallest projects, so the subsidies system now in place for hydropower in most Western Balkan countries directly contradicts the EU guidelines on state aid for environmental protection and energy” explains Pippa Gallop, Southeast Europe Energy Advisor at Bankwatch. “Governments must change the rules urgently to prevent any more unnecessary destruction of our rivers”. 

The disproportionate environmental and social damage caused by small hydropower compared to its energy generation potential has already been recognised by the Energy Community, the EU’s Technical Expert Group on the sustainable finance taxonomy, and in the EU’s Principles for Sustainable Hydropower Development in the Western Balkans. But Western Balkan governments have dragged their feet in halting subsidies and diversifying their renewable energy sources.

“As the countries of the Western Balkans are setting their 2030 renewable energy targets and policies, it is time to end subsidies for small hydropower projects and focus on more viable alternatives. Increasing energy efficiency and investing in wind and solar both have tremendous potential in the region if planned correctly and with public participation”, concluded both organizations.

-END-

Contact:

Pippa Gallop, Southeast Europe Energy Advisor, pippa.gallop@bankwatch.org, +385 99 755 9787

Danijel Loncar, program officer (communications), dloncar@wwfadria.org, +385 95 3894 799