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Citizens urge Montenegrin government to halt gas deal with Japanese energy giant

According to the signatories, the projects not only contravene the Spatial Plan of Montenegro until 2040 – which explicitly excludes gas power plants and LNG terminals – but also potentially constitute criminal breaches, prompting notification to relevant EU institutions. Local authorities and citizens have voiced strong opposition to the project over safety, environmental, and public health risks, as well as the threat of creating new debt dependencies on imported fossil fuels. 

Montenegro’s national energy and climate plan, currently being finalised, has drawn extensive criticism for its stance on the development of gas infrastructure. Under its own decarbonisation commitments, the government is obliged to reconsider any projects that would significantly undermine the country’s 2050 climate targets. 

Commenting on a proposal for the Minister’s participation at the conference, during which he is expected to formally sign the memorandum, the signatories refuted claims that fossil energy from third countries such as Azerbaijan or Russia would ensure security of supply. In reality, such projects could generate over EUR 1 billion in debt, creating long-term dependency and supply instability. Serbia’s experience highlights the risks: in 2023, its district heating sector recorded total losses of EUR 10 million and an additional EUR 36.4 million in debt, due to volatile gas prices and investment costs. 

The signatories also warn that the project is not only economically unjustifiable but also unfeasible. Under its proposed lengthy construction timeline, the gas power plant and accompanying infrastructure would operate for only a few years before full decarbonisation in 2050. 

Fossil gas cannot serve as a temporary solution in 2025. Montenegro can no longer afford projects that deepen reliance on fossil fuels and divert the country from its clean energy goals. Resources must instead be directed towards sustainable renewable energy sources and energy efficiency, including solar, wind, geothermal, heating electrification, and energy storage technologies. Any new borrowing or investment in fossil infrastructure would jeopardise the clean energy transition and increase both climate and financial risks. 

The signatories call on the government to abandon the agreement and prioritise sustainable investments that strengthen long-term energy security, reduce costs for citizens, and align with EU climate policies. 

More information: 

 

Bishkek residents seek mediation to restore trolleybus service

The EBRD has invested around EUR 24 million in loans and grants to support Bishkek public transport projects. These include a new e-ticketing system, the preparation of a public transport development strategy, infrastructure upgrades and 130 new trolleybuses. Of these, 52 were purchased in 2017 and 2018. 

Although the EBRD recently repaid two of its previous trolleybus projects (approved in 2011 and 2015), it still maintains an active financial interest in Bishkek’s public transport sector. In 2020, the Bank approved an additional EUR 25 million loan along with an EUR 8 million grant to rehabilitate a bus depot, purchase new buses running on compressed natural gas (CNG), and implement the city’s Green Cities Action Plan.

Trolleybuses were once the iconic mode of transport for citizens of Bishkek, the capital of Kyrgyzstan. Emissions-free and more spacious than both CNG buses and the city’s overcrowded ‘marshrutka’ minivans, the fleet of 183 trolleybuses provided a reliable and comfortable mobility option across 11 routes throughout the city.

Unfortunately, in spring 2024, the city authorities began dismantling the trolleybus system with plans to transition to electric buses.(1) A year later, however, only two electric buses had entered pilot service, leaving Bishkek’s locals facing an acute shortage of public transport. This gap has resulted in worsening air quality (2) and increased health risks. And these impacts are disproportionately felt by vulnerable groups, including older people, women and children, and people with disabilities, whose mobility needs cannot be met by the city’s insufficient public transport fleet.

After numerous petitions and letters from local, national, and international stakeholders, legal action in Kyrgyz courts, and unsuccessful attempts to communicate with international financiers, a coalition of Bishkek citizens and civil society groups has decided to request mediation. The group – which includes youth and women leaders, human rights organisations, environmental activists, and an association representing people with disabilities – has formally asked the EBRD’s IPAM to launch a problem-solving process through which they hope to negotiate with local authorities for the return of at least the newest 52 trolleybuses. 

Problem-solving supports voluntary dialogue between parties aimed at resolving environmental, social and access-to-information concerns without attributing blame or fault. Facilitated by the IPAM and an independent mediator, the process enables an open exchange of information and helps all parties reach a mutually satisfactory agreement through alternative, consensus-based resolution approaches.

To ensure focus and efficiency, the IPAM’s problem-solving process can last up to one year. A degree of flexibility is allowed until an action plan is agreed, at which stage the IPAM then monitors the implementation of the approved actions. If problem-solving fails to commence or a consensus is not reached, the IPAM can initiate an investigation to assess whether the EBRD has followed its own environmental and social standards. 

A representative of BishkekSmog: ‘Air pollution continues to negatively affect the health and well-being of the more than one million people living in Bishkek. And the problem is only getting worse due to smog, the city’s “silent killer”. With around one-third of emissions coming from transport, we’re calling for open and constructive dialogue with Bishkek City Hall to restore the city’s trolleybuses – our most environmentally friendly, emissions-free mode of transport.’ 

A representative of the Association for Human Rights for People with Disabilities: ‘Unfortunately, it’s currently extremely difficult for people with disabilities to get around in Bishkek. Trolleybuses were equipped for accessibility, but they are no longer in service. Bus drivers never lower the ramps and completely ignore people with disabilities and pensioners. As a defender of the rights of people with disabilities, I often accompany them around the city and, for us, the absence of trolleybuses is a huge loss and a major obstacle to mobility.’

A representative of Bir Duino Kyrgyzstan: ‘In Kyrgyzstan, activists and civil society leaders are working within an ever-shrinking civic space. As watchdogs, they continue to demand justice, effective use of development aid, transparency, and good governance – including in development bank projects.’ 

Fidanka Bacheva-McGrath, Strategic Area Leader for Cities for People at CEE Bankwatch Network: ‘It’s in the interests of requesters, local authorities and international financiers to find a sustainable solution to Bishkek’s public transport system. Although two EBRD loans have been repaid, the trolleybuses purchased in 2018 can still contribute to the achievement of Bishkek’s Green City Action Plan as well as its climate mitigation and air quality objectives. To be “money well spent”, Green City investments need to deliver long-term benefits and create space for discussion on the mobility needs of communities.’

Egor Muleev, transport expert at the Leibniz Institute for Regional Geography: ‘It’s difficult to say why the decision was made to replace one electric bus system with another. It certainly wasn’t based on engineering knowledge, economic appraisals, or aesthetic considerations. What is clear, however, is that City Hall received loans from two international banks and should adhere to the initial agreements to support the city’s sustainable transition. Hopefully, the IPAM will maintain focus on sustainable development in the decision-making process and influence future steps towards delivering environmentally friendly transport solutions in Bishkek.’

Alessandro Ramazzotti, researcher at the International Accountability Project: ‘Residents of Bishkek have consistently expressed a preference for clean and reliable public transport. That’s why it’s essential that all stakeholders engage in the mediation process with integrity, respect the expressed needs of communities, and safeguard the long-term public benefit of previous investments.’

For more information, please contact fidankab@bankwatch.org or bishkek.smog@gmail.com.

NOTES FOR EDITORS:

(1) Read more about the decision to remove Bishkek’s trolleybuses: The last trolleybus of Bishkek: mayor’s decision defies logic and undermines foreign investments in green transport – Bankwatch.

(2) Learn more about air pollution in Bishkek and the city’s trolleybuses: https://bishkeksmog.info/.

Western Balkans: Majority of EU energy crisis package funds untraceable, shows new report

Announced in November 2022, the EU Energy Support Package for the Western Balkans aimed to mitigate the immediate effects of the energy crisis and accelerate the energy transition. EUR 500 million was to be disbursed by the Western Balkans Investment Framework (WBIF)(2), and the other half consisted of budget support to assist vulnerable families and small businesses.

90 per cent of the budget support funds were transferred between February and May 2023, with the remainder to be disbursed on completion of Action Plans. Tracking was to be based on indicators, not spending (3). The Commission published ‘indicative’ plans in 2022, but the finally adopted versions for Albania, Bosnia and Herzegovina, Kosovo and North Macedonia do not seem to be available online.

Short-term subsidies for energy bills dominated the draft plans, with unclear results. In Albania, the support only covered existing schemes, while Montenegro and Serbia provided one-time payments with no long-term effect. North Macedonia subsidised all household electricity bills through transfers to state-owned utility ESM, instead of targeting vulnerable consumers.

Montenegro and Serbia also included ‘energy security’ measures in their Action Plans, including direct fossil fuel subsidies via the purchase of oil stocks.

All the countries planned incentives for insulation, efficient heating devices and/or small-scale renewable installations, but only Bosnia and Herzegovina and Kosovo published significant information on their progress. Out of the EUR 500 million budget support, Bankwatch was only able to confirm EUR 41.1 million as contributing to a sustainable energy transition.

Pippa Gallop, Southeast Europe energy policy officer at Bankwatch – ‘The lack of public information on the EU’s energy crisis package for the Western Balkans is beyond comprehension. Hastily set up indicator-based funds are becoming the Commission’s modus operandi in the region, but without coherent spending plans, public consultations, regular progress updates and accountability, billions of euros of public funds risk being wasted.’

Davor Pehchevski, Balkan energy coordinator at Bankwatch – ‘The main energy crisis passed long ago, so it’s high time for the governments and the Commission to answer the billion euro question: what has been done and what has it achieved? In a region known for its nepotism and corruption, it’s unbelievable that so much money was disbursed upfront, with so few conditions attached. We expect a thorough evaluation of the Package to be carried out as soon as possible, involving all relevant actors, and the results to be made publicly available.’

Contacts

Pippa Gallop, Southeast Europe Energy policy officer, CEE Bankwatch Network 

pippa.gallop@bankwatch.org, Tel: +385 99 755 9787

Davor Pehchevski, Balkan Energy Coordinator, CEE Bankwatch Network

davor.pehchevski@bankwatch.org, Tel: +389 71 264 087

Notes for editors

  1. The report is available here.
  2. The WBIF component consisted of:
  • EUR 123 million grants for energy infrastructure projects such as solar and wind plants, which Bankwatch assessed as relevant for advancing the energy transition;
  • EUR 52 million credit lines, which most likely supported worthwhile projects but lack publicly available information on their uptake and results;
  • EUR 100 million for the Regional Energy Efficiency Programme, which mostly supports worthwhile projects but lacks publicly available information on their timing and results;
  • EUR 230 million for EFSD+ guarantees which are difficult to trace and may not all have been issued yet.
  1. As of mid-July 2025, Albania and Montenegro have received their final 10 per cent tranches (in November 2024 and December 2023); Kosovo and Bosnia and Herzegovina have requested it; and North Macedonia and Serbia have not yet done so.

This activity is part of the “Green Agenda Navigator” project supported by the European Union. The project is implemented by the Belgrade Open School in cooperation with six regional partners: the Aarhus Centre Association, Eco-Team organization, Eco-Z organization, the Center for Environmental Research and Information Eko-Svest, the Protection and Preservation of Natural Environment in Albania organization and CEE Bankwatch Network.

A budget aware of the challenges, yet falling short on solutions for a resilient future

To make the budget more focused, simple, impactful and responsive, the European Commission is proposing a major overhaul.  

Daniel Thomson, EU Policy Officer for Biodiversity at CEE Bankwatch Network: ‘While we agree with the problems identified, the Commission has chosen the easy way of deregulation in the name of “simplification” instead of supporting Member States in enforcing key principles to ensure quality spending. The “do no significant harm principle” should be a valuable tool in this regard, but the proposed exceptions for fossil fuels and mining will open the floodgates to use public money for highly damaging activities.’ 

The proposed merging of a series of existing funds, such as cohesion, just transition, and agricultural funds, would result in a lack of targeted funding for regions seeking to phase out carbon-intensive industries and derail the progress made to date. While Member States are encouraged to include regional chapters, this does not necessarily guarantee just transition regions will receive sufficient attention. So far, the Just Transition Fund has supported the Commission’s pledge to ‘leave no-one behind’ through the transformation of the energy system. 

But the abolition of this dedicated fund after just a few years would leave Europe’s coal, peat, and oil shale regions without the necessary financial tools and capacity to ensure a socially just and ambitious energy transition, especially in peripheral and rural areas. The proposed budget also fails to offer dedicated just transition support for carbon-intensive regions in the Western Balkans, despite the willingness of local authorities to embark on this process. 

The Commission’s proposal also dismantles the LIFE programme (1), ending its decades-long and proven track record in financing unique and innovative projects. In addition, the 35 per cent spending target for environmental objectives is still not enough, especially since this target will be dispersed between different programmes. Separate targets for different environmental objectives, such as distinguishing between climate and biodiversity, are urgently needed.  

Branka Španiček, Strategic Area Leader for Finance and Biodiversity at CEE Bankwatch Network: ‘The LIFE programme – a prime example of high-quality, high-impact EU funding that contributes to the EU’s resilience and excellence – should be scaled up. Instead, the Commission’s proposal to deprioritise this vital financial instrument will lead to its disappearance and leave gaps in already weak public funding for biodiversity, capacity-building, and peer exchanges on energy transformation.’  

Anelia Stefanova, Strategic Area Leader for Energy Transformation at CEE Bankwatch Network: ‘We hoped the European Commission would better consider inputs from the consultation process and Citizens’ Panel, which clearly underlined the need to fund capacity-building, education, and citizen-led solutions for a socially and environmentally just transition. This unambitious budget proposal will favour business as usual and result in the misallocation of precious funds. Only genuine public involvement through robust enforcement of the partnership principle across all EU funds can help address the shortcomings of this proposal.’ 

The partnership principle – a long-standing approach grounded in shared responsibility and inclusive governance – has consistently demonstrated its value in strengthening regional resilience and fostering democratic participation. Yet the principle is only applied to selected EU funding instruments. The Commission’s proposal includes requirements for the partnership principle to be applied to the development of national and regional plans.  

With negotiations now in the hands of Member States and the European Parliament, there is still time to steer the budget in the right direction. 

Contacts: 

Anelia Stefanova, Strategic Area Leader for Energy Transformation, anelias@bankwatch.org 

Branka Španiček, Strategic Area Leader for Finance and Biodiversity, bspanicek@bankwatch.org 

Daniel Thomson, EU Policy Officer for Biodiversity, daniel.thomson@bankwatch.org 

Notes for editors: 

(1) Recent report: LIFE for nature: Why Europe’s flagship environmental programme must remain part of the next EU budget 

EU climate fund shrinks support for dirty energy

Three investments of particular concern: 

  • EUR 20 million has been allocated for heat and electricity production in Poland, earlier such investments have been used primarily to back fossil gas projects at a time when gas dependency must be reduced. 
  • EUR 150 million will support a renewable energy scheme in Romania that allows funding for small but harmful hydropower projects. Such projects, including in Romania, have already caused environmental damage with questionable energy gains. 
  • EUR 37 million is going to hydrogen-powered buses in Greece, a technology that has already proven too costly and inefficient to operate in previous attempts around Europe. 

Bankwatch has long been calling on both EU and national authorities to eliminate support for dirty energy via the Modernisation Fund, and this disbursement round has the smallest share of unsustainable projects and schemes so far, chiefly fossil gas. 

Intended to utilise revenues from EU emission trading to catalyse the energy transition in 13 lower-income member states, the little-acknowledged Modernisation Fund has simultaneously been extending hefty support to fossil gas and other forms of dirty energy. 

Between 2021 and 2024, the Modernisation Fund has handed out at least EUR 4.2 billion to dirty energy – roughly half of this amount just to fossil gas – according to a Bankwach report1 released in early May. This analysis found that between 27% and 44% of the Modernisation Fund’s total investments have gone to anything from biomass-fired heating plants to waste incinerators to fossil gas pipelines primarily in Romania, Czechia and Poland. And several governments have indicated they’re seeking billions more from the Modernisation Fund for similar projects and schemes in coming years. 

Crucially, part of the reason that national authorities and the Modernisation Fund’s governing bodies are able to allow investments that run counter to the Fund’s very purpose is the lack of public scrutiny. Despite civil society calls to increase public participation and transparency, even in the current disbursement round, several investments lack detail to assess whether they might in the end support fossil gas or biomass combustion, both technologies run contrary to the stated aims of the Fund.  

Gligor Radečić, gas campaigner with CEE Bankwatch Network, says: 

“It is encouraging to see that significant funding was disbursed to genuinely necessary projects. However, unless the rules are changed to prohibit fossil gas and other false solutions from getting EU climate money, there is no guarantee that the Modernisation Fund’s next investments continue in this direction. 

“Unfortunately, up to now, this Fund was treated by its beneficiaries as a dumping ground for projects that wouldn’t qualify for support under other EU funding streams. This should not be allowed.” 

The Commission is currently reviewing the rules governing the Modernisation Fund. This is an opportunity to ensure that EU climate money doesn’t end up entrenching countries’ dependence on fossil gas and false solutions. For instance,  by introducing a binding emission reduction threshold for all potential investments could help prevent EU money from being spent on the wrong kinds of energy infrastructure. 

For more about Bankwatch’s campaign on the Modernisation Fund, see here: https://bankwatch.org/modernisation-fund 

For more information please contact: 

 Gligor Radečić, Gas campaigner, CEE Bankwatch Network  

gligor.radecic@bankwatch.org 

Footnotes: 

1 Keeping the flame alive with emission revenues: How the EU Modernisation Fund props up fossil gas and waste incineration (May 2025) https://bankwatch.org/publication/keeping-the-flame-alive-with-emission-revenues-how-the-eu-modernisation-fund-props-up-fossil-gas-and-waste-incinerationf 

 

Western Balkan governments still complicit in deadly coal pollution – new report

Seven years since pollution control rules came into force under the Energy Community Treaty, in 2024 sulphur dioxide emissions from coal plants included in the National Emissions Reduction Plans (NERPs)(2) of Bosnia and Herzegovina, Kosovo, North Macedonia and Serbia were still collectively six times as high as allowed.

For the first time, Bosnia and Herzegovina’s NERP coal plants were the highest SO2 emitters, with 212,840 tonnes – an increase from the previous year and 11.3 times as high as allowed. Serbia followed, with 205,925 tonnes, or 4.6 times as high as allowed.

Region-wide, SO2 emissions have decreased only slightly since 2018. And the emissions limits were more stringent in 2024 than in previous years, leading to an even larger compliance gap.

For the fifth time since 2018, the biggest individual SO2 polluter in 2024 was Ugljevik in Bosnia and Herzegovina, with 112,943 tonnes – even more than the previous year. Its operator, an Elektroprivreda Republike Srpska subsidiary, has spent at least EUR 85 million, financed by a Japan International Cooperation Agency loan, on a desulphurisation unit, but has admitted it is not working, partly because it is an ‘economic burden’.

No fewer than six units across the region exceeded their individual ceilings for sulphur dioxide emissions by more than ten times – Ugljevik, Gacko, Tuzla 6 and Kakanj 7 in Bosnia and Herzegovina; Kostolac A2 in Serbia; and Bitola B 1 & 2 in North Macedonia.

Dust pollution from NERP coal plants in the region was nearly twice as high as allowed in 2024 (1.9 times the limit). Emissions dropped slightly from 2023 but remained similar to 2018 levels. 

The highest dust emitter was Gacko in Bosnia and Herzegovina. It emitted 3,339 tonnes – 13.7 times as much as allowed. After protests by local people, improvements were announced in autumn 2023, however the plant’s pollution in 2024 was even higher than the previous year.

Nitrogen oxides pollution also totalled 1.4 times as much as allowed in the countries’ NERPs in 2024, compared to 1.3 times in 2023. Bosnia and Herzegovina, Kosovo and Serbia all continued to breach their NOx limits, with Nikola Tesla B in Serbia emitting the most – 12,418 tonnes.

In addition to the NERP breaches, at the end of 2023, the deadline for closing the smallest and oldest plants under the ‘opt-out’ limited lifetime derogation expired. All three countries in the Western Balkans with coal power plants subject to this rule – Bosnia and Herzegovina, Montenegro and Serbia – are still breaching it, as none of the plants have closed.

Montenegro’s Pljevlja plant has been running illegally since late 2020, and in 2022 was joined by Tuzla 4 and Kakanj 5 in Bosnia and Herzegovina and Morava in Serbia. The Kolubara A plant, also in Serbia, also failed to stop operating at the end of 2023.

The Energy Community Secretariat has opened several infringement-type cases against the countries (3) but not a single government has imposed penalties on the coal plants in question. Nor do they have clear, updated and realistic plans for compliance and/or closure.

Davor Pehchevski, Balkan Energy Coordinator at Bankwatch – ‘In six months, the EU’s carbon border adjustment mechanism (CBAM) will finally limit exports of Western Balkan countries’ carbon-intensive electricity by imposing fees on imports to the EU. This will make their ageing, inefficient coal plants even less economic. But the Balkan governments and utilities seem oblivious, as if they have all the time in the world. Clear, workable plans are urgently needed.’

Pippa Gallop, Southeast Europe Energy Policy Officer at Bankwatch – ‘EU enlargement is back on the agenda, but the harsh reality is that Western Balkan governments are showing no interest in people’s health or the environment. Instead of a robust response to these chronic breaches, the European Commission recently prioritised the Jadar lithium mine in Serbia as ‘strategic’, rewarding the regime’s failure to uphold the rule of law. This has to change, and fast’.

Contacts:

Davor Pehchevski,

Balkan Energy Coordinator

davor.pehchevski@bankwatch.org  

Tel: +389 71 264 087

Pippa Gallop

Southeast Europe Energy Policy Officer

pippa.gallop@bankwatch.org

Tel: +395 99 755 9787

Ioana Ciută, Strategic Area Leader – Beyond Fossil Fuels

ioana.ciuta@bankwatch.org

Tel: +40 724 020 281

 

Notes for editors: 

(1) The report is available at ComplyOrClose.org

(2) As part of their obligations to comply with the Large Combustion Plants Directive under the Energy Community Treaty, four Western Balkan countries – Bosnia and Herzegovina, Kosovo, North Macedonia and Serbia – have drawn up National Emission Reduction Plans (NERPs) covering the period from 2018 to 2027. Instead of requiring each large combustion plant to comply with the emission limit values from the Large Combustion Plants Directive from 1 January 2018, these plans allow the countries to calculate national emissions ceilings for sulphur dioxide, nitrogen oxides and dust, and to gradually decrease their total emissions from selected pre-1992 large combustion plants until 2027. In 2027, all the plants included in the NERPs will individually need to be in compliance not only with the emission limit values from the Large Combustion Plants Directive, but also with Part 1 of Annex V to Directive 2010/75/EU on Industrial Emissions.

(3) Due to the breaches of the NERP pollution limits, in March 2021 the Energy Community Secretariat opened dispute settlement cases against BiH, Kosovo, North Macedonia and Serbia.

In July 2023, the Energy Community Secretariat took further steps against Bosnia and Herzegovina, Kosovo, and North Macedonia, making a reasoned request to the Energy Community Ministerial Council to make decisions on the cases, which it did in December 2023. The case against Serbia remains open but has not escalated due to ongoing desulphurisation investments.

Due to the breaches of the opt-out provisions, the Energy Community Secretariat also opened dispute settlement cases against Montenegro in April 2021, Bosnia and Herzegovina in October 2022, and Serbia in October 2023.