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New life for old nukes in Ukraine means more risk for people and planet

A decision today by Ukraine’s nuclear regulator to extend the operations of another Soviet-era reactor has been made in spite of the country’s failure to implement fully the obligations it took on when receiving EU funding for its ageing nuclear fleet.

Slated for closure by February 2016, the second unit at the Zaporizhska nuclear power plant – located in the proximity of the ongoing war with Russia over the Donbas region – was granted a new lease on life today. The State Nuclear Regulatory Inspectorate Council ruled that the reactor could continue operations until 2026. This follows a similar decision made in September 2016 for unit one at Zaporizhska.

The ruling brings the total number to six reactors with a green light to operate beyond their originally designed lifetime. Together with another nine reactors, as much as 55 per cent of Ukraine’s electricity is provided by these plants [1].

Yet despite its obligation under the UN’s Espoo Convention and the loan agreements signed with the financiers of its nuclear ‘safety upgrade’ programme – the European Bank for Reconstruction and Development and the EU’s Euratom – Ukraine has yet to initiate the requisite discussions regarding the Zaporizhska extensions in its neighbouring countries.

Ukraine is already under scrutiny [2] by the Energy Community for its failure to implement the EU’s Environmental Impact Assessment Directive, a further obligation for Ukraine in receiving its nuclear loans.

Iryna Holovko, campaigner at the National Ecological Centre of Ukraine, said: “Ukrainian authorities need a clear message from the European Commission that disrespect for international obligations comes with consequences. No respect for conventions, no money.”

Bankwatch has also taken legal action against the European Commission over the lack of information provided about its decision to disburse the first tranche of funds to Ukraine. When a 2015 request for information from the Commission’s Directorate for Economic and Monetary Affairs [3] – which has jurisdiction of the loan to Ukraine – was insufficiently answered, Bankwatch referred the case to the European Court of Justice.

Dana Marekova, Bankwatch campaigner in Slovakia, said: “Today’s decision shows little regard for safety and for public opinion. Bankwatch had asked for information from the Commission about the disbursement of loan payments, because we want to understand the rationale for supporting a programme that fails to honor commitments made to international conventions.”

For more information contact:

Dana Marekova
Campaigner, Bankwatch – Slovakia
dana.marekova@bankwatch.org

Iryna Holovko
Campaigner, National Ecological Centre of Ukraine
iryna@bankwatch.org

Notes

[1] More on individual reactors in Ukraine and their designed lifetimes https://bankwatch.org/image-upload/UAnuclear-map-new.pdf

[2] https://www.energy-community.org/portal/page/portal/ENC_HOME/NEWS/News_Details?p_new_id=13263

[3] https://bankwatch.org/publications/letter-european-commission-dg-ecfin-ukraine-does-not-meet-obligations-under-internation

Juncker investment plan: deep reforms necessary for sustainable future


Brussels, 28 September 2016 – Cash that should be flowing into projects that boost environmental sustainability is instead fuelling outdated carbon-intensive projects like motorways, airports, and fossil-fuel infrastructure, according to a new report on Europe’s investment plan released today [1].

The report analyses projects approved by the European Fund for Strategic Investments (EFSI) in its first year of operation. The fund should catalyse €315 billion in new investment, and play an important role in the fight against climate change. However, during its first year an additional €1.5 billion was earmarked for fossil fuel infrastructure, and 68% of transport investment is destined for carbon-intensive projects.

Markus Trilling, EU policy officer for CEE Bankwatch Network and Friends of the Earth Europe, said:
“Despite the best laid plans, Europe is hemorrhaging cash in deeply unsustainable projects like motorways, airports and gas infrastructure. Europe is missing huge opportunities to modernise and decarbonise its economy through investments in renewables and energy efficiency.”

Anna Roggenbuck, EIB campaign coordinator for CEE Bankwatch Network, said:
“Our analysis proves that in the energy sector, the EFSI did not catalyze more support for renewables than what was already provided by the European Investment Bank – although this was its initial mandate. This looks like window-dressing. We need to ensure that the EFSI provides real added-value in order to catalyse investments needed for an energy system of the future.”

Sebastien Godinot, economist in WWF European Policy Office, said:
“The Juncker plan should be used for climate action, not for climate destruction. There is no reason why it should support more investments in gas infrastructure while the EU gas consumption is going down. Instead of investing in polluting costly infrastructure for which there will likely be no market in the future, we should focus on energy efficiency and renewable energy solutions.”

The report raises concerns about the European Commission’s proposal to extend the Investment Plan for Europe under “EFSI 2.0” [2]. Although some support for renewables and energy efficiency is welcomed, deep reforms are necessary if the fund is to guide a sustainable energy transition, according to the organisations [3].

The report recommends improving both the sectoral and geographical balance of investment, increasing transparency, and putting a clear focus on genuinely sustainable projects.

For more information please contact:

Markus Trilling
CEE Bankwatch Network and Friends of the Earth Europe
Tel: +32 (0) 484 05 66 36
markus.trilling@foeeurope.org

Anna Roggenbuck
CEE Bankwatch Network
Tel: +48 509 970 424
annar@bankwatch.org

Sebastien Godinot
WWF European Policy Office
Tel: +32 (0) 489 46 1314
sgodinot@wwf.eu

Maeve McLynn
CAN Europe
Tel: +32 2893 0950
maeve@caneurope.org

Notes for the edito:

[1] The best laid plans: Why the Investment Plan for Europe does not drive the sustainable energy transition – https://bankwatch.org/sites/default/files/best-laid-plans.pdf

The report was published by CEE Bankwatch Network; Climate Action Network Europe; Counter Balance; Friends of the Earth Europe and WWF EU.

[2] European Commission, Strengthening European Investments for jobs and growth, September 2016:
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2016:581:FIN

[3] European Commission, The Road from Paris, March 2016:
https://ec.europa.eu/transparency/regdoc/rep/1/2016/EN/1-2016-110-EN-F1-1.PDF

Juncker Investment Plan 2 and review of EU budget offer no progress towards Europe’s long-term climate goals

What should have been two significant contributions to Europe’s war chest in the fight against climate change will in fact leave the planet short-changed and open the door to even more polluting fossil fuel projects, argue campaigners at Bankwatch, Friends of the Earth Europe and Climate Action Network Europe.

Today, the European Commission proposed a second iteration of the European Fund for Strategic Investment (the so-called ‘Junker Investment Plant’) [1]. It would extend its operations until 2020 – two and a half years beyond its initial term – and aim to leverage 500 billion euro in additional infrastructure investments across the EU.

While the new proposal would include so-called ‘climate action components’ in at least 40 percent of new projects, the groups argue that virtually any investment could fit within this framework.

Anna Roggenbuck, EIB campaigner at Bankwatch, said:
“The Commission’s proposal is pretty generous about what it would consider climate-friendly. Moving the goalposts would mean that refurbishing a gas pipeline would count as a climate action component. We need a real guarantee that money allocated for climate action is spent to fulfil the EU’s climate obligations under the Paris Agreement and not some form of green washing.”

Also at issue is the introduction of a new provision that would make any piece of infrastructure eligible for an EU guarantee under the EFSI as long as it is cross border between two member states.

“This provision paves the way for continued investments in fossil fuels such as gas infrastructure and climate intensive motorway transport”, argued Wendel Trio, Director at CAN-Europe. “Instead, we need investments in genuine alternatives that support the transition away from carbon pollution”, he continued.

In a parallel move, the Commission also published its mid-term review of the Multiannual Financial Framework 2014-2020 [2] (the so-called ‘EU budget’). In a sobering admission [3], it predicts that it will not reach the 20 per cent spending for climate action, as was mandated when the budget was approved in 2013.

The mid-term review gives a nod to the need to foster job creation, investment and economic growth as well as addressing migration and its root causes. However, the mid-term review fails to mention enhancing funding to tackle climate change or removing fossil fuel subsidies which inhibit Europe’s ability to meet its international climate objectives.

Markus Trilling, EU funds campaigner at Bankwatch and Friends of the Earth, said:
“The two proposals today sold out the EU’s long-term plans for climate action. The Commission betrayed the commitments made in Paris by allowing more money for fossil fuels. Now it is up to the European Parliament and the Council to right the Commission’s wrongs and ensure that both the Juncker Investment Plan and the EU budget truly deliver for the climate.”

Contacts

Caroline Westblom, CAN Europe Communications Officer
caroline@caneurope.org
+32 484 566 239

Wendel Trio, CAN Europe Director
wendel@caneurope.org
+32 473 170 887

Markus Trilling
EU funds campaigner at CEE Bankwatch Network & Friends of the Earth Europe
markus@bankwatch.org
+32 484 056 636
Twitter: @SustEUfunds

Notes for editors

1. http://eur-lex.europa.eu/resource.html?uri=cellar:08ec00f9-7a52-11e6-b076-01aa75ed71a1.0001.02/DOC_1&format=PDF

2. http://ec.europa.eu/budget/mff/figures/index_en.cfm#com_2016_603

3. Staff Working Document, page 20 http://ec.europa.eu/budget/mff/lib/COM-2016-603/SWD-2016-299_en.pdf

New report reveals the ‘dark side’ of EIB funds: how the EU’s bank supports non-transparent investment funds based in tax havens

Counter Balance launches today a new report that critically analyses a little-known part of the European Investment Bank (EIB)’s operations: its use of private equity funds.

The report is available for download at
http://www.counter-balance.org/wp-content/uploads/2016/09/The-dark-side-of-EIB-funds_report.pdf

The report presents a number of statistics and facts about recent investment funds financed by the EIB during the period 2011-2015.

Main findings are that:

  • The EIB supports private equity funds incorporated in tax havens and problematic jurisdictions;

    • Graph EIB's support to investment funds located in secrecy jurisdictions

  • There is a systematic lack of transparency involved in these types of operations, both from the EIB and the investment fund’s side;
  • Cases of conflicts of interests and revolving doors are frequent since several fund managers previously worked for the EIB or other international financial institutions.

In this context, the report further challenges the business model underpinning this type of development finance.

At a time when public pressure is mounting on EU institutions to seriously crack down on tax havens, the report calls on the EU to make sure that its own financial institution, the EIB, ends such operations. Indeed, the EIB continues to systematically ignore calls from civil society and the European Parliament to increase the transparency of its operations and take further steps to tackle tax evasion and tax dodging. [1]

The report also presents concrete recommendations on measures that the bank should implement in order to live up to its role. Among them, the adoption of a fully-fledged Responsible Taxation Policy by the end of 2017 should radically restrict its support to clients operating in tax havens and improve the transparency and due diligence conducted on its operations via financial vehicles. [2]

The director of Counter Balance, Xavier Sol, explains:
“The findings of our research show that the EIB operates through obscure and opaque lending practices with dubious added-value in development terms. Therefore, we call on the European Investment Bank to clean up its act and establish a moratorium on its support to investment funds before it addresses and fixes the structural problems related to these operations. As the EIB’s standing and political power has significantly increased over the last ten years, growing responsibilities are falling on the bank’s shoulders.”

For more information:

Xavier Sol
Xavier.sol@counter-balance.org
+32 2 893 08 62

Notes

1. Report on the European Investment Bank (EIB) – Annual Report 2014, European Parliament, (2015/2127(INI)), online at
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+TA+P8-TA-2016-0200+0+DOC+PDF+V0//EN

2. See our previous report “Towards a Responsible Taxation Policy for the EIB”, Counter Balance and Re:Common, 2015, online at:
http://www.counter-balance.org/wp-content/uploads/2015/04/towards-responsible-taxationWEB.pdf

Counter Balance – Challenging public investment banks is a European coalition of development and environmental non-governmental organisations (NGOs) with extensive experience working on development finance and the international financial institutions (IFIs). Our mission is to make European public finance a key driver of the transition towards socially and environmentally sustainable and equitable societies.

We have previously questioned the rationale behind the EIB’s support for private equity funds in the 2010 report “Hit and run development”.

New report: institutionalised corruption in Romania’s third largest company

Counter Balance and its partner Bankwatch have launched a new report exploring corruption cases in Romania’s third largest company. The Oltenia Energy Complex (OEC) is a key player in the energy sector in Romania and today operates ten lignite mines and four power plants. Supposed recipient of a EUR 200 million loan from the European Bank for Reconstruction and Development (EBRD), OEC stands out for a long list of corruption scandals collected in the last decade.

Focusing mainly on the dodgy contracts signed by the company with the Șova and Associates law firm, the report shows a repeated history of state capture practices, involving prominent figures of the Romanian political panorama such as Dan Șova and Victor Ponta, members of the national Parliament, but also local officials.

Although, after fierce protests by civil society, the EU public money did not reach the Romanian company, it is worth remembering the Oltenia Energy Complex case as one to draw some lessons from. Alexandru Mustață, author of the report, claims: “It is crucial that large infrastructure financiers better investigate companies before doing business with them, and monitor them from that moment onwards”.

Xavier Sol, director of Counter Balance, underlines: “Such cases of state capture should alert infrastructure financiers like the EBRD to aim for transparency of both the loaner and the loaned as an essential part of the due diligence practice public banks have to conduct”.

Read the report in English here.

For further information contact:

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

Alexandru Mustață, Bankwatch Romania
alexandru.mustata AT bankwatch.org
+40 726 770 808

EU budget review must enhance European climate action

The European Commission must listen to the European Parliament calling for an EU budget that works for people and planet – according to CEE Bankwatch Network, Friends of the Earth Europe and Climate Action Network (CAN) Europe.

The demand follows the adoption of a report by the European Parliament on the EU budget today [1], that will inform the European Commission’s review of the current 2014-2020 EU budgetary period. In light of the Paris Agreement, the European budget must tackle the causes and impacts of climate change. This includes full integration of climate action across the budget – so-called climate action mainstreaming. It also includes increasing the current 20 percent climate action target of the EU budget to at least 30 percent, and a phase out of fossil fuel subsidies or spending on fossil fuel infrastructure, according to the organisations.

Markus Trilling, EU Policy Officer at CEE Bankwatch Network and Friends of the Earth Europe, said:

“The European Parliament asks to bring the EU budget in line with the Paris Agreement. This would mean an immediate end to funding for fossil fuels and a greater imperative to tackle the climate crisis. It would also mean that measures to reduce greenhouse gas emissions are integrated into all investment decisions in Europe – incentivising the smaller scale, decentralised and community-owned sustainable solutions we need.

“More than ever, not least in the wake of the results of the Brexit referendum, the benefits of EU spending for European citizens must be made clear. Using EU funds as blanket financial support for government budgets has not worked. We need an EU budget that works for people and planet, which means including essential EU objectives like the ‘circular economy’ and which supports clean energy investment plans that are expanding sustainable energy in Member states.

Wendel Trio, Director of Climate Action Network Europe added:

“The Paris Agreement explicitly states that our governments need to change how money is spent so that it enhances climate action, not hinders it. The review of the EU’s budget is an ideal moment to scale up funding for climate action. Aligning the EU’s budgetary spending with the Paris Agreement is an opportunity not to be missed, if the EU wants to be a front-running investor in the transition towards a zero emissions economy.”

For more information contact:

Caroline Westblom
CAN Europe Communications Officer
caroline@caneurope.org
+32 484 566 239

Wendel Trio
CAN Europe Director
wendel@caneurope.org
+32 473 170 887

Markus Trilling
EU Policy Officer
CEE Bankwatch Network & Friends of the Earth Europe
markus@bankwatch.org
+32 484 056 636
Twitter: @SustEUfunds

Notes to editors

1. REPORT on the preparation of the post-electoral revision of the MFF 2014-2020: Parliament’s input ahead of the Commission’s proposal, (2015/2353(INI)):

Follow up of the international agreements on environmental changes

60. Notes that the COP 21 agreement reached in Paris is a universal, dynamic and differentiated agreement aimed at facing the challenge of climate change; underlines that, under this agreement, EU funding needs to be allocated for supporting climate action in developing countries; stresses that any funding for the possible measures originating from COP 21 should be additional to the current spending on climate actions, and calls on the Commission to present its implementation strategy and first evaluation of the possible impact of the COP 21 agreement on the EU budget in due time for the revision; underlines, moreover, that the revision of the MFF creates an excellent opportunity to ensure that the 20 % target of spending on climate-related actions is reached and to provide for a possible increase of this threshold in line with the EU’s international commitments taken during the COP 21; calls on the Commission to ensure that the mechanism of climate action mainstreaming is fully operationalised and that the current method of tracking of such spending is improved; recalls, furthermore, that the EU is also committed to implement the United Nations convention’s Strategic Plan for Biodiversity, and underlines that it should dedicate sufficient resources to fulfil its commitments in that respect;

In its opinion to the above report, the Committee on the Environment, Public Health and Food Safety calls on the Commission to:

3. Calls on the Commission to ensure that Union financial resources contain neither subsidies that are harmful to the climate or lock in fossil fuel infrastructure or support activities which damage ecosystems and biodiversity nor fossil fuel subsidies; also calls on the Commission to introduce an effective method of tracking biodiversity spending in the Union budget