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Controversial Turkish-Azerbaijani gas pipeline gets major EU loan

Prague, Brussels, Rome, London – Today the board of directors of the European Investment Bank (EIB) green-lighted a EUR 932 million loan to the Trans Anatolian gas pipeline (TANAP), the Turkish section of the Southern Gas Corridor, a month after handing out the largest ever fossil fuels loan to the western section of the same project.

The Southern Gas Corridor is the biggest energy project the EU is currently pursuing, with the intention of annually delivering 6 billion cubic meters of Azerbaijani gas to Turkey and additional 10 billion cubic meters to the EU. Scheduled to be completed later this year, the 1800 kilometers long TANAP would traverse Turkey from the border with Georgia to the border with Greece.

Civil society groups – including Bankwatch, Counter Balance, 350.org, Re:Common, CEO, Friends of the Earth Europe and many others – have been repeatedly warning that the Southern Gas Corridor project is at odds with EU commitments on both human rights and climate action [1].

A study released by Bankwatch in late January has shown that, due to fugitive methane emissions and burning of gas, the Southern Gas Corridor’s climate footprint could be comparable to that of coal, the dirtiest source of energy, or even worse [2].

In addition, there are mounting concerns over corruption among both governments and companies involved in realising the Southern Gas Corridor. In Turkey, all subcontractors hired by the state-owned energy firm Botas for the project have close ties to President Erdogan’s AK Party, according to a Bankwatch report from December 2016 [3]. An international journalistic investigation published in April 2017 also unveiled the extensive network of politically exposed people in Turkey and Azerbaijan that stand to directly benefit from the project [4].

In light of the disturbing human rights situation under the increasingly authoritarian regimes in both Turkey and Azerbaijan, last December, 33 Members of the European Parliament wrote to EIB President Werner Hoyer, urging him to suspend plans to finance the TANAP project [5].

Today’s approval of the EIB’s loan adds to chain of investments in the Southern Gas Corridor from multilateral development banks now totalling over EUR 6 billion in public money.

This decision also took place a day after the European Court of Auditors criticized European financial support to Turkey for being particularly ineffective when it came to the independence of the Turkish judicial system, fighting corruption and media freedom [6].

Anna Roggenbuck, Policy Officer at CEE Bankwatch Network, said: “With the decision to finance TANAP, the EIB has shown its disregard to Europe’s commitments to climate change mitigation.This project has been approved without a proper climate impact assessment, and in contradiction to pledges under the Paris Agreement to keep global temperature rise to well below 2 degrees Celsius which entails limiting fossil fuels consumption.”

Xavier Sol, Director of Counter Balance, said: “The EIB today decided to give a blank cheque to energy companies controlled by the autocratic regimes of Turkey and Azerbaijan. The EU bank has been repeatedly ducking its responsibilities by hiding behind the political support of the European Commission and External Action Service to the Southern Gas Corridor. The bank has given no evidence of the human rights impact assessment it should have carried out at project level, and demonstrates that it simply disregards human rights issues effectively placing them at the lowest of its priorities”.

Elena Gerebizza, energy campaigner at Re:Common, said: “This decision raises serious concerns on the credibility of the EIB in the fight against corruption, in its respect for democracy as well as the core principles of the EU the bank is supposed to uphold. We expected the EIB to carry out an in-depth due diligence process on the politically exposed people linked to the Azerbaijani Laundromat scandal in Turkey and in Azerbaijan. Instead, the EIB chose to pour more money into companies that are at the core of the power structure in these countries, with no guarantee of delivering any good to the people. This is a shame.”

Colin Roche, extractives campaigner with Friends of the Earth Europe, said: “Like adding gas to a fire, today’s decision by the EIB, the EU’s investment bank, to pour more funds into new gas infrastructure is yet another cash injection for climate destruction. The more we invest in gas pipelines like TANAP the more we lock Europe into decades of fossil fuel dependency when we need to be moving to a fossil free future.”

Notes to editors:

[1] Human rights concerns over EIB loan to TANAP (September 2017): http://bit.ly/2HzUwX0 [PDF]

[2] Smoke and mirrors: why the climate promises of the Southern Gas Corridor don’t add up (January 2018) https://bankwatch.org/publication/smoke-and-mirrors-why-the-climate-promises-of-the-southern-gas-corridor-don-t-add-up

[3] Risky business – Who benefits from the Southern Gas Corridor (December 2016)  https://bankwatch.org/risky-business

[4] The Pipeline of the Three Regimes (April 2017) http://espresso.repubblica.it/inchieste/2017/04/18/news/the-pipeline-of-the-three-regimes-1.299786

[5] Letter from 33 MEPs to EIB President Werner Hoyer (December 2017) https://bankwatch.org/wp-content/uploads/2018/03/EIB-TANAP-loan-33-MEPs-signatures.pdf [PDF]

[6]  The Court of Auditors report “EU pre-accession assistance to Turkey: Only limited results so far” is available here: https://www.eca.europa.eu/en/Pages/DocItem.aspx?did=45148

For more information contact:

Xavier Sol
Director, Counter Balance
xavier.sol@counter-balance.org
+ 32(0)2 893 08 61
Twitter: @xavier_sol

Anna Roggenbuck
EIB Policy Officer, CEE Bankwatch Network
annar@bankwatch.org
Mobile: +48 509970424
Office: +48 91 831 5392

Elena Gerebizza
Energy Campaigner, Re:Common
egerebizza@recommon.org
+39 3406705319
Twitter: @elegere

Noelie Audi-Dor
Keep It In the Ground coordinator, 350.org
noelie@350.org
+447927110002
Twitter : @350Europe

Pascoe Sabido
Researcher, Corporate Europe Observatory
pascoe@corporateeurope.org
+44 7969 665 189
Twitter: @pascoesabido

Colin Roche
colin.roche@foeeurope.org
Extractive Industries Campaigner, Friends of the Earth Europe
+32 (0)2 8931021
Twitter: @ColinRoche

European Parliament calls for future EU budget to support the energy transformation in regions that need it most

CEE Bankwatch Network applauds the Parliament’s report because of the emphasis placed on MFF spending being directed towards transforming Europe’s energy system and as well the importance of Cohesion Policy, a critical pot of money for less developed regions across the EU.

The Parliamentarians’ report stands in contrast to recent calls for cuts to Cohesion Policy resources, advocating instead for a significant increase in the overall size of the EU budget.

At the same time, the report stresses that Cohesion Policy should continue to be the main investment policy that covers all EU regions, with the majority of its resources being concentrated on the most vulnerable and carbon-intensive regions, which are often located in central and eastern Europe.

Bankwatch believes that the report is a strong signal to capitals across the region to seize the opportunity for a transformation of their carbon-intensive economies by implementing commitments of the Paris Agreement and meeting the EU’s 2030 climate and energy goals, while phasing-out harmful subsidies for fossil fuels.

Barbora Urbanová, national campaigner in the Czech Republic for Bankwatch and member Centre for Transport and Energy, said: “MEPs got it right with this report. The heel dragging on climate by governments in our region cannot continue, so laying the foundations for a strong Cohesion Policy that can bridge the investment gap for transforming the energy sector is a hard carrot to ignore.”

Juraj Melichar, national campaigner in Slovakia for Bankwatch and member Friends of the Earth-CEPA, said: “Making more money available through the MFF to unlock the potential for sustainable renewables is a great way to reconnect people to the European project. A solar panel on a roof or a heat pump in households will go a long ways in demonstrating the added value of Cohesion Policy.”

Selina Vancane, national campaigner in Latvia for Bankwatch and member Green Liberty, said: “Reforming Cohesion Policy is needed, and rather than simply shrinking it, this report kick starts a move towards an ambitious, sustainable and democratic People’s Budget that works for all Europeans.”

For more information, contact

Barbora Urbanová

Centre for Transport and Energy, Czech Republic
Email: barbora.urbanova@ecn.cz
Mobile: +420 605 276 909

Juraj Melichar
CEE Bankwatch Network, Friends of the Earth-CEPA, Slovakia
Email: juraj.melichar@bankwatch.org
Mobile: +421 903 473 816

Selina Vancane
CEE Bankwatch Network, Green Liberty, Latvia
Email: selina.vancane@bankwatch.org
Mobile: +371 263 000 52

Notes

[1] The BUDGET Committee draft report is available here.

The report comes in advance of a 23 February informal European Council meeting of heads of states to discuss the next budget priorities.

Controversial gas pipeline gets EUR 1.5 billion in public money amid massive climate risk

CEE Bankwatch Network, Counter Balance, Friends of the Earth Europe, 350.org

Press release
For immediate release

Prague, Brussels –– The European Investment Bank (EIB) voted today to hand out one of Europe’s largest ever loans to one of the EU’s largest fossil fuel projects, the contentious Trans Adriatic Pipeline (TAP).
The loan approval follows the release of a study last week demonstrating that the Southern Gas Corridor – of which TAP is a part – could be as emissions-intensive or even more so than coal power. [1]

Over the past few years Bankwatch, Counter Balance, Friends of the Earth Europe, 350.org and a growing number of civil society groups across the world have warned that TAP and the entire Southern Gas Corridor project would be detrimental to the EU’s efforts to cut greenhouse gas emissions.
In spite of these calls, none of the institutions promoting or financing the Southern Gas Corridor have actively publicised a climate impact assessment of this massive fossil gas project so far [2].

But a document obtained via a freedom of information request revealed [3] that the European Commissioner for Energy and Climate Action and the Vice President of the European Commission in charge of the Energy Union have been lobbying the EIB to green-light loans to TAP and the eastern section of the Southern Gas Corridor, the Trans Anatolian Pipeline (TANAP).

The EIB decision on the TAP project has already been delayed multiple times over the past years. Just days before its December meeting, the EIB’s board of directors, representing all 28 EU Members States, received over 4 000 emails from concerned citizens urging them not to fund TAP, resulting in another postponement of a decision on the project.

The December meeting, which coincided with the anniversary of the Paris Climate agreement and the One Planet climate finance summit, had been slated for a decision on the loan.

Xavier Sol, Director of Counter Balance, says: “We witnessed today a historical mistake by the EIB, a self-styled green finance champion which has shown its true colours. The bank is showing its poor consideration of climate challenges, as well as its disregard to the problematic human rights situation in Turkey and Azerbaijan.”

Colin Roche, extractives campaigner for Friends of the Earth Europe, says: “Having avoided the embarrassment of announcing a fossil fuel mega-loan on the anniversary of the Paris climate agreement, the European Investment Bank is now shamelessly locking Europe into decades of fossil fuel dependency even as the window for fossil fuel use is slamming shut. The Banks’s biggest ever investment in dangerous fossil fuels undermines the EU’s commitment to climate action when we urgently need to be transitioning to a fossil free future.”

Anna Roggenbuck, EIB Policy Office with CEE Bankwatch Network, says: “This is symptomatic that the Southern Gas Corridor has been approved without EU institutions disclosing its climate impact.”

Tim Ratcliffe from 350.org says: “There is no time to lose. While European politicians and financiers continue to put their support behind the fossil fuel industry, the local communities that will directly feel the negative impacts on their lives are determined to stop projects like these gas mega-pipelines from ever being built. More and more people across Europe are stepping up in support to ensure not a penny more is invested in climate-wrecking fossil fuels.”

Notes to editors

[1] Traversing Greece, Albania and the Adriatic Sea before making a landfall on Italy’s southern shores, TAP is envisaged as the western section of the Southern Gas Corridor. A 3500 kilometre long chain of pipelines starting in Azerbaijan’s Shah Deniz II offshore gas field, this project is designed to pump annually ten billion cubic metres of fossil gas to Europe starting 2020, in addition to six billion cubic metres of gas that could arrive to Turkey as early as this year.

The independent climate impact assessment, conducted by researchers from the Observatori del Deute en la Globalització and the Polytechnic University of Catalonia is available at https://bankwatch.org/publication/smoke-and-mirrors-why-the-climate-promises-of-the-southern-gas-corridor-don-t-add-up

[2] The EBRD has at Bankwatch’s request disclosed a climate impact assessment for the Southern Gas Corridor, commissioned to Carbon Limits.

[3] Letter from Commissioners Miguel Arias Canete and Maros Sefcovic to Werner Hoyer: https://www.asktheeu.org/en/request/4741/response/15094/attach/3/gestdem%206199%20annexe%20letter%20CAB.pdf

[4] A recent study by the Tyndall Centre for Climate Change Research found that EU countries can afford just nine more years of burning gas and other fossil fuels at the current rate before they will have exhausted their share of the earth’s remaining carbon budget for maximum temperature rises of 2°C http://www.foeeurope.org/new-study-incompatability-climate-safety-gas-071117

For more information contact

Xavier Sol
Director, Counter Balance
xavier.sol@counter-balance.org
+ 32(0)2 893 08 61
Twitter: @xavier_sol

Anna Roggenbuck
EIB Policy Officer, CEE Bankwatch Network
annar@bankwatch.org
Mobile: +48 509970424 Office: +48 91 831 5392

Colin Roche
Extractive Industries Campaigner, Friends of the Earth Europe
colin.roche@foeeurope.org
+32 (0)2893 1021

Mark Raven
European Communications, 350.org
mark@350.org
+90 5441 45425

New study shutters EU claims on climate benefits from flagship energy project

In less than two weeks the Trans Adriatic Pipeline (TAP), a key section of the Southern Gas Corridor, could be awarded a record EUR 1.5 billion loan in public money from the European Investment Bank.

The full study can be found here.

TAP, the western leg of the 3500-kilometre long Southern Gas Corridor, is intended to bring at least 10 billion cubic meters (bcm) of Azerbaijani gas to the EU every year. Additional 6 bcm are to be shipped to Turkey via the Trans Anatolian Pipeline, the central piece of the Southern Gas Corridor. In later stages of the project these quantities are planned to rise, and starting 2026 the Southern Gas Corridor is meant to carry up to 31 bcm of Azerbaijani gas each year [1].

Officials at the European Commission and European financial institutions have occasionally argued the Southern Gas Corridor would actually help the EU meet its climate goals. Nevertheless, in January 2017 Miguel Arias Cañete, the Commissioner for Climate Action and Energy, admitted [2] the Commission has not carried out any climate assessment of what is in fact the largest fossil fuels project the EU is currently pursuing. None of the public banks that are considering financing parts of the Southern Gas Corridor, or that have already provided funding, have publicised any climate assessments of the project.

The new study, commissioned by CEE Bankwatch Network and conducted by researchers from the Observatori del Deute en la Globalització and the Polytechnic University of Catalonia, finds that in more than half of the nine scenarios examined, the level of fugitive emissions of methane, the main component of natural gas and an exceptionally potent greenhouse gas, would mean the Southern Gas Corridor’s climate footprint is comparable to coal power’s or even larger.

The International Energy Agency’s World Energy Outlook 2017 defines a threshold of three percent of fugitive emissions, above which natural gas projects’ emissions intensity surpasses that of coal, which is widely considered the dirtiest fossil fuel. [3]

In five of the scenarios considered by the authors of the new study, the share of unintended releases of methane in the extraction and transmission would range between 2.44%-5.95%, thus raising the risk of exacerbating, rather than mitigating, climate change.

In addition, the study shows that the annual emissions of the Southern Gas Corridor’s first stage alone would exceed the total emissions of Bulgaria in 2015, or even match Romania’s in that year.

On February 6 the board of directors of the European Investment Bank is scheduled to vote on a EUR 1.5 billion loan for the TAP project. So far the bank has not disclosed its climate impact assessment for the Southern Gas Corridor or even just for the TAP project.

Anna Roggenbuck, EIB Policy Officer at CEE Bankwatch Network, says: “As long as Europe continues to pursue the Southern Gas Corridor project, the findings of this study cast serious doubts over the EU’s commitment to tackling the climate crisis as a party to the Paris Agreement.”

Josep Nualart Corpas, researcher from Observatori del Deute en la Globalització, says: “Coal thresholds must be considered as an inadmissible limit for methane leaks produced along the gas supply chain. As this fossil fuel is mainly used as an energy resource, low carbon alternatives like energy efficiency and renewable energy must be evaluated.”

Notes to editors

[1] See the Environmental and Social Impact Assessment (non-technical summary) for the Trans Anatolian Pipeline project (PDF, p. 7): http://www.ebrd.com/cs/Satellite?c=Content&cid=1395256764251&d=&pagename=EBRD%2FContent%2FDownloadDocument

[2] See: http://www.europarl.europa.eu/sides/getAllAnswers.do?reference=E-2016-007932&language=EN

[3] See: https://www.iea.org/weo2017/

For more information contact

Anna Roggenbuck
EIB Policy Officer, CEE Bankwatch Network
annar@bankwatch.org
Tel. +48 918 315 392 / +48 509 970 424

European-financed small hydropower plants damaging pristine Balkan landscapes – study

Prague, Radolfzell, Skopje, Zagreb – Eight hydropower projects in Albania, Croatia and Macedonia financed with European public money have damaged biodiversity and are in urgent need of increased monitoring and restoration measures, finds a study by CEE Bankwatch Network released today (1).

See the full the study and available languages

The hydropower plants were enabled by support from the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB) and were built in 2013-2015. They are affecting endemic and endangered species, and in some cases they have also hampered local communities’ water use, the new study finds. In most cases, flagrant violations of national laws and international financial institutions’ standards are visible and include blocking fish passes, releasing insufficient or no water at all downstream, and creating significant erosion with access roads. National authorities appear to have imposed fines on the hydropower plant operator in only one of the cases.

“Our research shows that so-called small hydropower plants have large impacts. It is high time for financiers to stop investing in any industrial activity in ecologically sensitive areas”, says Igor Vejnovic, Bankwatch’s hydropower policy officer and the author of the study.

“Both European Bank for Reconstruction and Development and European Investment Bank will revise their lending policies in 2018. We expect them to introduce no-go zones for financing hydropower in line with the recommendations of the International Union for Conservation of Nature (IUCN)” added biologist Ana Colovic Lesoska, from Eko-svest, Macedonia, one of the chief participants in the field research.

The study shows that it should have been reasonably obvious that projects in ecologically sensitive areas, such as national parks, would have significant impacts on wildlife. Nevertheless, the European public banks decided to proceed relying on environmental impact studies of dubious quality that had played down potential effects. As a result, these projects have caused the destruction of habitat of the endemic Prespa Trout in Macedonia and the filling of the glacial Black Lake in Albania with sediment, among other impacts. All this could have been prevented by excluding financing for projects in protected areas. The situation has been aggravated by governments’ inability or unwillingness to properly monitor and enforce legislation.

In three of the cases – Lipkovo (aka Kamena reka), Tearce 97-99 (aka Bistrica 97-99) and Ilovac – the sources of financing remained secret until recently. They were not directly financed by the European public banks, but through loans extended via local banks, who refuse to reveal which projects they finance.

“In the Mavrovo National Park in Macedonia alone,15 more plants are planned. Given the impacts the Tresonecka hydropower plant is already having, plans for additional ones must be abandoned,” says Theresa Schiller from the EuroNatur Foundation.

“The EBRD and EIB’s money is still public money even when channelled through commercial banks. Yet the names of such projects are not disclosed by the banks and the public is denied the chance to influence their decision-making. Three cases covered by the study show what kind of impacts even small projects can have and that greater scrutiny is needed,” says Pippa Gallop, Bankwatch’s Research Coordinator.

 

The study was produced as part of the campaign “Save the Blue Heart of Europe”

 

For more information contact:

Igor Vejnovic, Bankwatch
igor.vejnovic@bankwatch.org
+420 773 140 691

Ana Colovic Lesoska, Eko-svest
ana@bankwatch.org
+389 72 726 104

Anja Arning, Euronatur
E-Mail: anja.arning@euronatur.org
Phone: +49 7732 9272 13

Notes for Editors

(1) The research covered the following hydropower plants

  • Rapuni 1-2, Albania. Owner: C & S Construction Energy shpk (Albania), financed by the EBRD
  • Ternove, Albania. Owner: Teodori 2003 shpk (Albania/Canada), financed by the EBRD
  • Ilovac, Croatia. Owner: Tekonet d.o.o (Croatia), financed by the EIB
  • Brajcinska reka 1 (also: Brajcino 1), Macedonia. Owner: Mali hidroelektrani DOO (Macedonia), financed by the EBRD
  • Brajcinska reka 2 (also: Brajcino 2), Macedonia. Owner: PCC HYDRO DOOEL (Germany), financed by the EBRD/KfW
  • Tresonecka reka (also Tresonce), Macedonia. Owner: Hidro Enerdzi Group (Macedonia), financed by the EBRD
  • Lipkovo (also: Kamena reka), Macedonia. Owner: SOL Hidropauer DOOEL (Italy), financed by the EIB
  • Tearce 97-99 (also: Bistrica 97-99), Macedonia. Owner: SOL Hidropauer DOOEL (Italy), financed by the EIB

Save the Blue Heart of Europe campaign:

About 2800 new dams are currently projected between Slovenia and Albania. In order to counteract this spate of destruction, ‘EuroNatur’ and ‘RiverWatch’ have launched the “Save the Blue Heart of Europe” campaign in cooperation with local partners in the respective Balkan countries. Find out more here: http://www.balkanrivers.net

EUR 1.5 billion public loan for controversial pipeline withheld

Brussels, Prague, Paris – Today, at a board meeting in Luxembourg the European Investment Bank (EIB) has decided, for now, to postpone loaning €1.5 billion to the controversial Trans-Adriatic Pipeline (TAP).

A growing number of civil society groups are calling on the EIB not to fund this fossil fuel pipeline. In the last few days over 4000 people across Europe and beyond told the bank’s board members that supporting TAP with a massive public loan would be inconsistent with the EIB’s attendance at the One Planet Summit in Paris where the bank pledged, once again, to align its finance with the Paris climate Agreement.

Traversing Greece, Albania and the Adriatic Sea before making a landfall on Italy’s southern shores, TAP is envisaged as the western section of the Southern Gas Corridor. A 3500 kilometre long chain of pipelines starting in Azerbaijan’s Shah Deniz II offshore gas field, this grandiose project is designed to annually pump 10 billion cubic meters of gas to Europe starting 2020, in addition to 6 billion cubic meters to Turkey as early as next year.

Nevertheless, TAP, and the entire Southern Gas Corridor, is a climate-busting fossil fuel project that serves to prop-up corrupt regimes that trample over human-rights, and today’s tragic news of the gas explosion in Baumgarten, Austria, demonstrates that these pipelines increase danger and vulnerability, not European energy security.

On a day in which the World Bank pledged to end funding for oil and gas exploration and gas extraction projects, the EIB board seemed to recognize the myriad problems with the TAP project and decided it needs further discussion before deciding on such a large, controversial loan. The project has been sitting in the bank’s pipeline for more than two years now, and the board will discuss the loan again no earlier than February 2018.

Anna Roggenbuck, EIB Policy Office with CEE Bankwatch Network, says:

“Acknowledging the impacts the project would have on both the climate and impacted communities, the EIB board decided it needs more discussion. We expect the board to demand the bank responds meaningfully to all the complaints raised so far by affected communities along the pipeline route.”

Xavier Sol, Director of Counter Balance, says:

“This further postponement of the Board’s decision on TAP is an important sign that the project’s toxicity has become increasingly obvious. The climate paradox at the heart of the project, together with the human rights abuses, impacts on local communities and corruption links associated with it have made it harder and harder for the EU’s bank to endorse.”

Cécile Marchand, climate and public actors campaigner from Friends of the Earth France says:

“Clearly it was too much even for the EIB to fund this fossil fuel mega project on the anniversary of the Paris Agreement – now they should make sure that 2018 sees them end support for fossil fuels entirely’’

Tim Ratcliffe from 350.org says:

“Communities in Italy, like the people of Melendugno, have been bravely resisting this pipeline in the face of fascist-era laws. Now, everyone that has been demanding the European Investment Bank defund the Trans Adriatic Pipeline just got the decision on a €1.5bn delayed until next year. This is a massive blow to this dangerous new pipeline – we’re turning the tide on new fossil fuel projects. TAP will not go ahead.”

For more information contact

Xavier Sol
Director, Counter Balance
xavier.sol@counter-balance.org
+ 32(0)2 893 08 61
Twitter: @xavier_sol

Anna Roggenbuck
EIB Policy Officer, CEE Bankwatch Network
annar@bankwatch.org
Mobile: +48 509970424 Office: +48 91 831 5392
Twitter: @RoggenbuckA

Cécile Marchand (in the One Planet Summit)
Climate and Public Actors Campaigner, Friends of the Earth France
cecile.marchand@amisdelaterre.org
Mobile: +33 (0)6 69 97 74 56
Twitter: @Cecile_Mcd

Mark Raven
European Communications Specialist, 350.org
mark@350.org
+447841474125 (UK) +90544145425 (Turkey)