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More billions for fossil fuels overshadows European development bank’s climate pledges

Despite commitments to help address the climate crisis, the European Bank for Reconstruction and Development (EBRD) awarded fossil fuel projects EUR 4.05 billion between 2010 and 2016 – more than double its support for renewable energy during the same period

The report can be downloaded from here: https://bankwatch.org/wp-content/uploads/2017/11/EBRD-energy-lending-2010-16.pdf

On Tuesday at the Paris climate finance One Planet summit, international financial institutions will tout their green credentials, but a new report reveals that the EBRD continues to be an ardent supporter of fossil fuels.

According to Bankwatch’s analysis, fossil fuel projects accounted for the largest share, 41 percent, of the EBRD’s EUR 9.96 billion energy and natural resources portfolio in 2010-2016.

A 2012 Bankwatch report warned that though the EBRD had made commendable strides in its support for energy efficiency and renewable energy (2006-2011), nearly half of the bank’s energy lending (EUR 3.26 billion) went to fossil fuel projects [1].

The following year, the revision of the bank’s Energy Strategy effectively halted investments in new coal power.

Four years later, Bankwatch’s new report finds that after several years of increased renewable energy investments, in 2016 the bank relapsed, lending less for renewable energy and more for fossil fuels.

In 2012-2016, the EBRD’s average annual investment in fossil fuels surpassed half a billion euro, and in 2016 alone the bank awarded fossil fuels no less than EUR 774 million.

In 2017 this figure could be even higher, as the EBRD in October green-lighted a USD 500 million loan to Azerbaijan for the realisation of the Trans Anatolian gas pipeline [2].

Overall, the EBRD’s fossil fuels investments were mostly in central Asia, eastern Europe and the Caucasus, and even within the EU.

Next year the EBRD will review its Energy Strategy once again, and the bank should use the opportunity to commit to end its support for new fossil fuels projects as well as to those intended to extend the lifetime or expand the capacity of existing facilities.

The bank can play an important role in supporting its countries of operation in the transformation of their energy systems into more sustainable ones. But this cannot be done while supporting fossil fuels.

Fidanka Bacheva-McGrath, EBRD Policy Officer at CEE Bankwatch Network, says:

“The EBRD has been a trail blazer in renewables development and it has made a strategic commitment to direct 40% of its investments to the green economy transition in our countries by 2020. That is exactly why it is so disappointing to see that the bank’s fossil fuel investments are on the rise, including coal heavy utilities and gas pipelines. Even more disconcerting is that the EBRD counts some of its investments in fossil fuels as climate action. Such financial support for fossil fuels then translates into a moral support for an industry that is dragging our countries away from a sustainable low-carbon development path.”

Notes to editors:

[1] Tug of War: Fossil fuels versus green energy at the EBRD: https://bankwatch.org/publication/tug-of-war-fossil-fuels-versus-green-energy-at-the-ebrd

[2] Major European loan to controversial Azerbaijani gas pipeline risks fuelling corruption, human rights abuse and climate change https://bankwatch.org/press_release/major-european-loan-to-controversial-azerbaijani-gas-pipeline-risks-fuelling-corruption-human-rights-abuse-and-climate-change

For more information contact:

Fidanka Bacheva-McGrath
EBRD Policy Officer, CEE Bankwatch Network
fidankab@bankwatch.org

Tel.: +359877303097

Twitter: @fidankabmg

Rushed loan approval for Tuzla 7 coal plant, but project far from ready

Prague, Sarajevo, Tuzla – The China Exim bank and Bosnian power utility Elektroprivreda BIH yesterday signed a massive loan agreement for the Tuzla 7 lignite power plant – a project that would have dire health, economic and climate repercussions.

The project’s backers used the opportunity of the 6th China-Central and Eastern Europe summit in Budapest to sign a EUR 613 million loan for the planned 450 MW Tuzla unit 7 lignite power plant in Bosnia-Herzegovina.

Reacting to this news, CEE Bankwatch Network, the Center for Ecology and Energy from Tuzla and Ekotim from Sarajevo pointed out that the signing is premature as the project is still far from ready:

Ioana Ciuta, Energy Co-ordinator at CEE Bankwatch Network, says:

“The fact that there’s an occasion to sign this loan agreement doesn’t make the project ready, quite the opposite – it is without the Parliament’s approval and haunted by legal and procedural challenges. The environmental permit is still being challenged in court, there is no energy permit, and the loan guarantee has not been approved by the State Aid Council”.

Denis Žiško from Center for Ecology and Energy, Tuzla, adds that:

“Tuzla 7 still does not have a definite location, let alone permits, for ash disposal. A proposal to locate it in Šički Brod is facing resistance from the local population.”

He called the loan signing a “death sentence for the population of Tuzla canton”, adding that “According to our [2013 study](http://www.ekologija.ba/userfiles/file/Health Impacts of Coal Fired Power Generation in Tuzla.pdf) carried out with the Health and Environment Alliance, between 2015-2030, 39,000 life-years will be lost as a result of the Tuzla and Banovići power plants, with total health-related economic costs of EUR 810 million.”

Pippa Gallop, Research Co-ordinator at CEE Bankwatch Network, says:

“While China is making strong steps forward at home in reducing coal use, it needs to demonstrate more leadership abroad by implementing its ‘Green Credit Directive’ for overseas investments. China Eximbank has failed to take into account the lack of environmental permit for the ash disposal site and has avoided disclosing information on its due diligence on the project. If China Eximbank finances projects like Tuzla 7 and others in the pipeline, there won’t be much left to inspire confidence about China’s green leadership.”

For more information contact:

Denis Žiško
Energy Campaign Co-ordinator, Center for Ecology and Energy, Tuzla
denis.zisko@ekologija.ba
+387 61 140 655

Rijad Tikveš
President, Ekotim, Sarajevo
rijad@ekotim.net
+387 62 381 701

Pippa Gallop
Research Co-ordinator, CEE Bankwatch Network
pippa.gallop@bankwatch.org
+385 99 755 9787
Skype: pippa.gallop

Ioana Ciuta
Energy Co-ordinator, CEE Bankwatch Network
ioana.ciuta@bankwatch.org
+40 724 020 281
Twitter: @unaltuser

Serbia pushes ahead with beleaguered coal plant at Kostolac

The Serbian government has announced today [1] the start of construction works on a new 350 megawatt lignite power plant at Kostolac in the country’s north east.

In response to the announcement, Bankwatch energy co-ordinator Ioana Ciuta said:

The government is deluding itself by doing the same thing and expecting different results. This is the third time it has announced that construction will start at Kostolac B3, in spite of problems at the project persisting since the start of the permitting process. There have been no environmental and social impact assessments of expanding the Drmno mine that will feed the power plant, and the local community’s request to be relocated from the mine borders has not been taken into account.

The project is also not in line with the latest pollution standards adopted this year by the EU. With so many countries in Europe announcing a phase out of coal power, Serbia is again thumbing its nose at the EU and its policies, which it would have to follow if it serious about joining the bloc.

Preparations began in earnest on the Kostolac project in January 2015, when the Serbian parliament ratified a loan agreement worth USD 608 million with China’s ExIm Bank for the coal plant’s construction, and since then the project has been dogged by irregularities at every turn.

The Serbian government took the loan on behalf of its state company EPS, raising issues of compliance with its state aid obligations [2] under the Energy Community Treaty. In addition to concerns about the project’s adherence to state aid rules, the environmental impact assessment process had to be repeated after the original approval expired and the Espoo Convention Implementation Committee [3] criticised Serbia for failing to assess the impacts in neighbouring countries. A new EIA report was then published for consultation in February 2017 and received a final decision in October 2017 [4]. An impact assessment of the mine expansion, which is needed to feed the new unit, was exempted in 2013 [5], a decision potentially at odds with Serbian legislation and the EIA Directive within the Energy Community Treaty.

Moreover, with the European Union updating its legislation governing industrial emissions in November last year, Kostolac B3 would now be obliged to adhere to emissions limits stricter than those set in the EIA decision from October. This means that should Serbia continue towards EU accession, Kostolac would already be saddled with expensive retrofit costs necessary to bring the plant in line with EU standards. [6]

Notes

[1] The announcement is available on the Serbian government website: http://www.srbija.gov.rs/vesti/dogadjaji.php?id=1516#307844

[2] http://bankwatch.org/publications/risks-coal-and-electricity-investments-western-balkans-ukraine-and-moldova-due-state-ai

[3] http://bankwatch.org/news-media/blog/cross-border-coal-pollution-first-time-under-scrutiny-un-body

[4] The EIA decision, including a summary of all inputs received during the consultations: http://www.mmediu.ro/app/webroot/uploads/files/2017-10-17_Decision_Environmental_Impact_Assessement_Study.pdf

[5] Ministry of Energy, Development and Environmental Protection of the Republic of Serbia: Decision no.353-02-901/2013-05, dated 26.07.2013.

[6] https://bankwatch.org/blog/balkan-governments-unprepared-for-new-eu-pollution-rules

For more information contact

Ioana Ciuta
Energy co-ordinator, CEE Bankwatch Network
ioana.ciuta@bankwatch.org
+40 724 020 281
Twitter: @unaltuser

New report: Juncker Plan backs billions in fossil fuels and carbon-heavy infrastructure

Brussels, Bonn — While in Bonn at the UN climate talks the EU touts the Paris Agreement, back in Brussels the European Union is set to continue a funding tool that in last two years has lent billions of euros for fossil fuels projects, finds a new study from CEE Bankwatch Network, CAN Europe, Counter Balance and WWF European Policy Office.

Established in 2015 to leverage private capital with money from the EU budget to guarantee risky loans by the European Investment Bank (EIB), the European Fund for Strategic Investment – also known as the ‘Juncker Plan’ – has since then doled out EUR 1.85 billion for fossil energy, almost 30 percent of its energy loans, and is increasingly funding carbon-intensive transport like motorways and airports, which have received EUR 2.5 billion since the fund’s inception [1].  

Backed by the European Commission and the EIB as a strong instrument in the fight against climate change, the Juncker Plan will be under the microscope of the Parliament one last time on Wednesday this week, before MEPs are set to approve a proposal from the Commission for a two-year extension to the fund during a vote next month.

Already blasted by the European Court of Auditors for not clearly proving its worth [2], the Juncker Plan is being further criticised in the NGO report for the shroud of secrecy cloaking its operations. Scant details are offered about the merits of projects that receive an EFSI guarantee, and the fund’s executive body – Investment Committee – does not publish a rationale for its investment decisions, which now total over EUR 20 bn.

Anna Roggenbuck, EIB Policy Officer at CEE Bankwatch Network, said:

“EFSI clearly fails on sustainability. It is incomprehensible that the EU budget is in a way financing new gas and motorway projects in countries that do not lack for them. It contradicts all of Europe’s green commitments.”

Markus Trilling,  Finance and Subsidies Policy Coordinator at Climate Action Network (CAN) Europe, said:

“EFSI exposure to fossil fuels breaches the Paris Agreement. The Juncker Plan must work for the climate, not against it.”

Xavier Sol, Director of Counter Balance, said:

“As a flagship initiative paving the way for sustainable investments in Europe, EFSI has so far scored poorly on transparency and accountability. In view of its extension, it is imperative that the bar is set much higher:  the minutes of its governing bodies need to be regularly disclosed, together with the assessment of projects under the so-called scoreboard of indicators.”

Sebastien Godinot, Economist at WWF’s European Policy Office, said:

“While EU leaders are bragging about their climate leadership at the UN Climate talks, they are financing fossil fuels almost as much as renewables with the Juncker Plan. This schizophrenia must end once and for all. It is up to the European Parliament to ensure consistency with its position on the Paris Agreement.”

Contacts

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

Markus Trilling
Finance and Subsidies Policy Coordinator, Climate Action Network (CAN) Europe
markus@caneurope.org
+32 2 8944688

Sebastian Godinot
Economist, WWF European Policy Office
sgodinot@wwf.eu
+32 489 46 13 14
Twitter: @Sebgodinot

Xavier Sol
Director, Counter Balance
xavier.sol@counter-balance.org
+32 473 223 893

Notes

[1] The new report is available for download at https://bankwatch.org/wp-content/uploads/2017/11/same-thing-EFSI.pdf

[2] See the European Court of Auditor’s report at https://www.eca.europa.eu/en/Pages/NewsItem.aspx?nid=7767

Civil society joins forces to push Europe beyond coal

Bonn, Germany, November 2, 2017: To combat the worsening impacts of climate change and air pollution, civil society groups across 28 nations are today launching Europe Beyond Coal, a collective campaign to catalyse and hasten the move away from coal and towards clean renewable energy.

Underscoring the need for this urgent shift, new health impact modelling released by the campaign shows that in 2015 the EU’s coal fleet alone was responsible for an estimated 19,500 premature deaths and 10,000 cases of chronic bronchitis in adults. The health costs of coal are equally staggering, with up to 54 billion euros in the same one year period.(1)

“Momentum is building for Europe to be coal free by 2030, and civil society is coming together to make it happen, and happen sooner,” said Kathrin Gutmann, Europe Beyond Coal Campaign Director. “For nations to meet their commitments under the Paris climate agreement and to protect the wellbeing of its citizens, coal plants need to be closing far faster than they currently are. A coal plant in any one country is a liability for all of Europe, and our planet as a whole.”

“We’re calling on governments, cities, companies, banks and investors to cement their plans to move out of coal before the 2018 international climate meeting in Katowice, Poland. The UN climate meeting starting in Bonn next week is an excellent opportunity for additional, ambitious commitments to phase out coal,” said Gutmann.

Since 2016, Europe Beyond Coal groups have helped retire 16 coal plants across Europe, and 39 more are to close, with the governments of the Netherlands, the United Kingdom, Finland, France, Portugal and Italy all committing these countries to being coal-free by 2030 at the latest. The campaign is focussing its efforts on turning these government coal phase out announcements into actions, and hastening the closure of Europe’s 293 remaining plants.

Concrete plans are particularly pertinent for countries like Germany, whose coal use is making it the worst greenhouse gas polluter in Europe and preventing it from meeting its climate objectives. Germany’s coal plants were responsible for an estimated 3,800 premature deaths and up to 10.5 billion euros in health costs inside and outside its borders in 2015.

Europe Beyond Coal groups are urging the new German government and all European countries dragging their feet on coal to stop backing coal utilities at home and in Brussels; to commit to coal phase-outs that ensure a fair and equitable transition for impacted workers and coal dependent regions; and to put their full weight behind a European-wide transition to a clean, renewable energy system.

Joint Statement: Launch of the European Beyond Coal Campaign

Contacts

Greg McNevin, Communications Director, Europe Beyond Coal

greg@beyond-coal.eu, +49 174 565 9356 (Germany) +90 546 873 4512 (Turkey)

Kathrin Gutmann, Campaign Director, Europe Beyond Coal (German, English)

kathrin@beyond-coal.eu, + 49 (0) 1577 836 3036

Mahi Sideridou, Managing Director, Europe Beyond Coal (Greek, English)

mahi@beyond-coal.eu, +45 93 602033

Notes

1) Europe’s Dark Cloud, 2015 update

2) Countries where Europe Beyond Coal groups are active: Albania, Austria, Bosnia & Herzegovina, Bulgaria, Croatia, Czechia, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Kosovo, Macedonia, Montenegro, Netherlands, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden,Turkey, United Kingdom.

3) More analysis and detailed data available at www.beyond-coal.eu/data/. We have the most Complete, comprehensive, up-to-date set of data on the entire European coal power plant fleet, covering all EU-28, Western Balkans, and Turkey. All information comes from a combination of official sources and national campaign groups and is provided in an open source, “share alike” format.

4) Overview of national coal phase out announcements

 

About: Europe Beyond Coal is an alliance of civil society groups working to catalyse the closures of coal mines and power plants, prevent the building of any new coal projects and hasten the just transition to clean, renewable energy and energy efficiency. A similar, sister campaign by the Sierra Club in the US has been running for a number of years now, and has led to 263 announced coal plant closures – more than half of the entire US fleet. These closures continue in spite of the Trump administration’s pro-coal agenda. Our groups seek to replicate this success in Europe, and are devoting their time, energy and resources to this independent campaign to make Europe coal free by 2030 or sooner.

Major European loan to controversial Azerbaijani gas pipeline risks fuelling corruption, human rights abuse and climate change

Prague, Brussels – A USD 500 million loan approved today by the European Bank for Reconstruction and Development (EBRD) for the construction of the Trans Anatolian Pipeline (TANAP) would enable this massive fossil fuels project while overlooking the continued repression of civil society and media in both Azerbaijan and Turkey.

Traversing Turkey, from its border with Georgia to the border with Greece, the 1850 kilometre long TANAP is the central piece of the Southern Gas Corridor, the largest energy project the EU is currently pursuing.

The controversial pipeline is planned to ship 6 billion cubic metres of Azerbaijani natural gas to Turkey every year. TANAP is also intended to feed the Trans Adriatic Pipeline with additional 10 billion cubic metres destined for Europe, despite repeated warnings that new gas deliveries could jeopardise the EU’s commitments under the Paris climate accord.

International civil society groups condemn the decision of the EBRD’s board of directors to approve the loan, and called on the bank to condition disbursement of the loan on the promoter, the Azerbaijani state-owned company Southern Gas Corridor JSC and both Azerbaijani and Turkish governments ensuring full compliance with international human rights, social and environmental standards, including standards on transparency of extractive revenues and civil society participation as stipulated by the Extractive Industries Transparency Initiative (EITI).

In March, Azerbaijan decided to quit the EITI, after its membership had been suspended due to the regime’s ongoing crackdown on journalists and rights defenders in the country. EBRD officials have repeatedly voiced the bank’s commitment to the EITI, but have so far failed to demonstrate how granting Azerbaijan financial support for the realization of the Southern Gas Corridor can help address the regime’s alarming human rights record.

In early September, an investigation by a number of media outlets revealed the USD 2.9 billion Azerbaijani Laundromat, a slush fund allegedly operated by the Azerbaijani regime, with the aim of buying influence among key European decision makers. According to the investigation, Kalin Mitrev, Bulgaria’s director on the EBRD’s board received nearly half a million dollars through the scheme.

The generous financial support for the TANAP project agreed today follows three earlier loans the bank has extended to the Shah Deniz II project, the gas production project off the coast of Azerbaijan that is intended as the source of the Southern Gas Corridor. With it, the EBRD’s overall investment in the Southern Gas Corridor now amounts to more than USD 1 billion.

Anna Roggenbuck, Policy Officer at CEE Bankwatch Network, says:

“With this loan, the EBRD has showed disrespect to its fundamental principles of multiparty democracy, the rule of law and respect for human rights. We regret to see the extraction and import of additional fossil fuels into Europe, benefiting only a handful of corporations and oppressive governments, is valued more than sustainable development and freedom of ordinary people.”

Xavier Sol, Director of Counter Balance, says:

“We witnessed today a historical mistake by the EBRD. By approving this loan, 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. The strategy of ‘constructive engagement’ with the Erdogan’s and Aliyev’s regimes does not stand: giving a blank check to these regimes is likely to reinforce repression on the ground.”

Tim Ratcliffe, senior campaigner at 350.org, said:

“With significant amounts of existing gas infrastructure sitting idle, and demand across the region falling, there is simply no reason for public banks such as the EBRD to be sinking money into climate-wrecking fossil fuel projects. Rather than a European dash for gas we need investment in just renewables to provide clean, affordable energy for everyone.”

For more information contact:

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

Xavier Sol
Director, Counter Balance
xavier.sol@counter-balance.org
+32 2 893 08 61

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