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NEW REPORT: Misguided spending by enfants terribles is undermining Europe’s transition to a fossil-free future


Brussels/Prague – EU billions destined to transform the carbon-intensive, inefficient energy systems of central and eastern Europe are being misspent, finds a new report today by CEE Bankwatch Network and Friends of the Earth Europe. Bad spending plans and a lack of climate commitments from nine central and eastern European governments is hampering Europe’s transition away from fossil fuels, the groups say [1].

The full report can be downloaded here: https://bankwatch.org/sites/default/files/enfants-terribles.pdf

Summaries, graphs and more are at: https://bankwatch.org/enfants-terribles

The new research reveals that in CEE countries only 7 per cent of the 178 billion euros in European Regional Development and Cohesion Funds will be invested into renewables, energy efficiency and SMART grids, and that the integration of climate considerations into all plans and projects – as required under EU law – remains superficial.

Markus Trilling, EU funds campaigner for CEE Bankwatch Network and Friends of the Earth Europe said: “Whatever happened at the climate talks in Paris, Poland is still all about coal. We’re seeing EU funds being spent across Central and Eastern Europe for coal, gas and dated transport systems – locking countries into fossil-fuel dependency, at the expense of renewables and energy efficiency.”

The European Commission asked member states to concentrate EU funding on climate action and climate mainstreaming within the EU’s seven year, one trillion euro budget for 2014 to 2020 [2].

The report lays the blame squarely on the insufficient spending plans and absent climate commitments of the countries receiving the funding. For example, both Poland and the Czech Republic will offer financial support for the replacement of ‘old coal boilers’ with ‘modern coal boilers’ under the heading of environmental protection.

Estonia will retain carbon-intensive oil shale as its major energy source; Croatia and Estonia have received support for airport extensions – usually excluded from EU funds. In Romania, a third of all the money received will be spent on the transport sector, without any integral climate considerations [3].

Markus Trilling continued: “This is really ‘close your eyes and drive’ spending. CEE countries are prioritising energy intensive transport and fossil fuels over solutions to climate change. Energy efficiency goals have been reduced to footnotes, and the potential for citizens to shape the energy sector – through innovative community-owned and managed renewables – has been side-lined.”

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Climate's enfants terribles. How new Member States' misguided use of EU funds is holding back Europe's clean energy transition

Country chapters, graphs & more

The report includes a comprehensive set of recommendations for ensuring that EU funds contribute to Europe’s energy transition in a meaningful way. This includes the use of the upcoming EU budget midterm review as an opportunity to align funding in CEE countries with European efforts to tackle climate change.

For more information please contact:

Markus Trilling
EU funds campaigner for CEE Bankwatch Network and Friends of the Earth Europe
Email: markus@bankwatch.org
Tel: +32 (0) 484 056 636

Sam Fleet
Communications officer for Friends of the Earth Europe
Email: samuel.fleet@foeeurope.org
Tel: +32 (0) 470 072 049

Notes

[1] The report “Climate’s enfants terribles: how new Member States’ misguided use of EU funds is holding back Europe’s clean energy transition” is available at
https://bankwatch.org/sites/default/files/enfants-terribles.pdf

[2] Article 8 of Regulation (EU) no 1303/2013 of the European Parliament and of the Council (Common Provision Regulations for ESIF):

‘The objectives of the ESI Funds shall be pursued in line with the principle of sustainable development and with the Union’s promotion of the aim of preserving, protecting and improving the quality of the environment, as set out in Article 11 and Article 191(1) TFEU, taking into account the polluter pays principle. […]

The Member States and the Commission shall ensure that environmental protection requirements, resource efficiency, climate change mitigation and adaptation, biodiversity, disaster resilience, and risk prevention and management are promoted in the preparation and implementation of Partnership Agreements and programmes.’

[3] https://bankwatch.org/sites/default/files/enfants-terribles.pdf

Romanian court rejects environmental permit, halting destruction of 159 hectares of forests and putting breaks on coal mining expansion


Bucharest – A Bucharest court yesterday annulled the environment permit for the felling of another 159 hectares of forest in Gorj country, effectively preventing the expansion of the Roșia lignite mine. [1]

Ruling on a case brought by Bankwatch Romania and Greenpeace Romania, the Bucharest Tribunal overturned the permit because it was granted only for deforestation works that would not otherwise be necessary if the Oltenia Energy Complex did not intend to expand its facilities at the Roșia lignite quarry.

The permit was also said to ignore provisions of the Romania Forestry Code, which mandates that forested lands may only be removed from the National Forests Register if compensation works are undertaken.

“Cutting huge chunks of forest in an area where millions of tonnes of coal are burned every year just to dig up even more coal is absurdity at its best. Expanding the quarry in this region would mean more pollution, more dust and more noise, all problems for which locals need to bear the brunt,” said Alexandru Mustață, Bankwatch Romania campaigner.

“Evaluating the environmental impacts of such a project is essential. Climate change is the biggest threat to humanity, and for the environment permit to omit such an assessment is unacceptable,” said Ionut Cepraga of Greenpeace Romania.

Permitting issues have long plagued the Oltenia Energy Complex, where several lignite extraction projects are located. Yesterday’s annulment is the most recent in a series of similar decisions, including two from earlier in the year related to the expansion of the Pinoasa lignite quarry, a ruling that saved 210 hectares of forest.[2] [3]

As defendants, the Gorj Environmental Protection Agency and the Oltenia Energy Complex can appeal the court decision within fifteen days. The court’s decision was not yet formally communicated to the parties.

For more information contact

Alexandru Mustață, campaigner
Bankwatch Romania
alexandru.mustata@bankwatch.org

Cătălina Rădulescu, lawyer
catalina.radulescu@gmail.com

Notes for editors

[1] http://portal.just.ro/3/SitePages/Dosar.aspx?id_dosar=300000000635602&id_inst=3

[2] http://faracarbune.ro/oprirea-defrisarilor-in-gorj-cotinua-bankwatch-si-greenpeace-opresc-in-instanta-defrisarea-a-inca-130-hectare-de-padure/

[3] http://faracarbune.ro/padure-de-80-de-hectare-salvata-de-la-defrisare-in-judetul-gorj/

New Bankwatch study: European “green energy” funding for hydropower threatens pristine Balkan rivers

Radolfzell, Vienna, Prague – A wave of hydropower development fuelled by European public funding and EU companies is endangering pristine river environments in the Balkans, finds a new study by CEE Bankwatch Network released today.

The extensive analysis [1] shows that multilateral development banks [2] are playing a key role. The European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and the World Bank’s International Finance Corporation (IFC) have extended loans totalling EUR 818 million to no less than 75 hydropower projects, including 30 directly affecting protected areas like national parks, Natura 2000 sites, and Ramsar sites.

The EBRD is the biggest investor in hydropower in the Balkans. The bank has supported a total of 51 plants with EUR 240 million, 21 of them inside protected areas, of which the vast majority are in Macedonia.

Most notably, the controversial Boskov Most project in Macedonia’s Mavrovo National Park has secured an EBRD loan of EUR 65 million, despite the threat it poses to the only remaining habitat of the critically endangered Balkan lynx.

“Our analysis clearly shows that especially for the EBRD, but also the World Bank Group, financing hydropower projects in protected areas is the norm, not an exception. They need to finally start taking their internal safeguard policies seriously”, says Pippa Gallop, Bankwatch’s Research Co-ordinator and co-author of the study.

”The EBRD Board of Directors will be meeting in London on 16 December, and we expect them to discuss how to stop the bank from bending its own policies,” added Klara Sikorova, Bankwatch’s Senior Researcher and study co-author.

Of other public banks and funds, most active has been Germany’s KfW and its subsidiary Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG), with 8 hydropower plants, of which 4 are in protected areas in Macedonia and in Bosnia and Herzegovina.

Most projects are carried out by domestic companies, but of the projects involving foreign investment, Austria stands out: Austria’s companies are involved in more than 40 dam projects, of which at least 20 are based in protected areas: Energy Eastern Europe Hydro Power GmbH (co-owner: Wien Energie) is involved in no less than 27 projects, of which 11 are in protected areas. Another Austrian company, the Kelag group, is involved in 13 projects, of which 9 are in protected areas, including the Medna Sana plant in Bosnia and Herzegovina, which is strongly opposed by local people.

“It’s unacceptable that companies from Austria or other western countries are building hydropower plants in the Balkans, that they would not consider in their home countries”, says Ulrich Eichelmann of Riverwatch.

“The good news is that the majority of the projects we identified are still on the drawing board and we will try to save as many of these beautiful Balkan rivers as possible,” says Gabriel Schwaderer, Executive Director of the EuroNatur Foundation.

The study and the accompanying database can be found at
https://bankwatch.org/publications/financing-hydropower-protected-areas-southeast-europe

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

For more information contact:

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

Klara Sikorova
Senior Researcher
CEE Bankwatch Network
klara.sikorova@bankwatch.org
+ 420 274 822 150, Ext. 27

Ulrich Eichelmann
CEO, Riverwatch
ulrich.eichelmann@riverwatch.eu
+43 676 6621512

Gabriel Schwaderer
EuroNatur
Executive Director
gabriel.schwaderer@euronatur.org
+49 7732 927210

Notes to editors:

[1] The study covers Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Vjosa/Aoos part of Greece, Kosovo, Macedonia, Montenegro, Serbia and Slovenia. It examines hydropower plants which have either been built in the last ten years or are now being planned.

A total of 1355 hydropower plants were identified as being planned now or having entered operation since 2005. Most of the plants are only in the planning stage so most likely do not have financing arranged yet, while others are financed by commercial bank loans which cannot usually be traced.

‘Financing sources’ include loans, guarantees, grants for project preparation/advisory services.

‘Plants’ refers to each separate hydropower facility, so one loan or guarantee may cover several plants but still be classed as a single ‘project’ by a financier.

[2] The EBRD, European Investment Bank and the World Bank group institutions (International Financial Corporation, International Bank for Reconstruction and Development, International Development Agency and Multilateral Investment Guarantee Agency).

Save the Blue Heart of Europe campaign:

About 2700 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 partner in the respective Balkan counties. Find out more here: http://www.balkanrivers.net

Image: The controversial Medna Sana project built by Austria’s Kelag group near the Sana springs in Bosnia and Herzegovina. (c) Za vode Podgorice

Ukraine snubs safety concerns and European donors, extends lifetime of fourth Soviet-era nuclear reactor

Kiev, Prague – An ageing nuclear unit in the South Ukraine power plant is the latest to have its expiry date rewritten by overzealous Ukrainian authorities, despite a number of pending safety issues and concerns over compliance with international treaties.

The board of Ukraine’s nuclear regulator SNRIU has yesterday (Monday) given the green light to the prolonged operation of unit 2 in the South Ukraine nuclear power plant beyond its original expiry date. Designed to work for no more than three decades, this nuclear reactor will be able to continue operations for ten more years as soon as the board decision is approved by the head of the SNRIU, even though a number of high priority safety upgrades are yet to be completed.

In its meeting on April 30, 2015, the nuclear regulator ruled that the unit has 33 safety deviations which need to be eliminated for a lifetime extension to be considered. The unit was therefore shutdown once it exceeded its design lifetime on May 12, 2015, but it could soon resume operations.

Yet, an inspection report from October 23, 2015, showed that only 9 of the 33 deviations have been eliminated and works on 11 others were still underway. The SNRIU board agreed that the remaining 13 issues will be addressed at a later stage.

“The SNRIU claims that it enforces international safety standards in Ukraine’s nuclear fleet, but there is little to back this up as long as no documents to confirm the elimination of safety deviations are presented,” says Iryna Holovko, Bankwatch’s national campaigner in Ukraine.

In fact, the SNRIU’s ability to guarantee the safety of the country’s nuclear reactors is in question. A government-imposed moratorium in effect since January 2015 prevents the nuclear regulator from carrying inspections in nuclear facilities on its own initiative.

A broader safety upgrade programme in Ukraine’s nuclear reactors, including in the South Ukraine power plant, is supported with a total of EUR 600 million from Euratom and the European Bank for Reconstruction and Development and was agreed to be completed by December 2017.

Yet, a governmental decree from September 30, 2015, postponed the deadline for the implementation of the programme until 2020 and without the approval of the European donors. As a result, the implementation of additional safety measures at unit 2 of the South Ukraine plant could now be delayed until the end of 2017.

“Ukraine could not send a clearer message to the programe’s international financiers that, despite the millions of euros of public money that they had invested, they don’t really have a say in how they are used,” says Holovko.

Moreover, in a letter sent to Member of the European Parliament in September the European Commission explicitly confirmed that it is of the opinion that lifetime extensions of nuclear units in Ukraine require transboundary environmental assessments and public consultations in neighbouring countries in line with the Espoo and Aarhus conventions. Yet, the Ukrainian authorities’ refusal to do so has not prevented the European donors from disbursing their loans.

“The Ukrainian authorities are so keen to stifle public debate on this reckless programe that when we commented on the SNRIU’s decision on this nuclear unit in April we were faced with a defamation lawsuit,” says Holovko.

Three other Ukrainian nuclear units are already operating beyond their design lifespan. In 2010 units 1 and 2 in the Rivne power plant have been authorized to continue working until 2030. This decision has been found to be in breach of the Espoo Convention. Unit 1 in the South Ukraine power plant has been granted a ten years lifetime extension in 2013. An independent expert report published earlier this year concluded the reactor is suffering critical vulnerabilities. Next Thursday (December 17) the SNRIU is expected to discuss the status of unit 1 in the Zaporizhia power plant ahead of its December 23 expiry date.

For more information contact:

Iryna Holovko
National Campaigner for Ukraine
CEE Bankwatch Network
iryna@bankwatch.org
Tel.+380 50 647 6700

Note to editors:

For more information visit the campaign webpage:
https://bankwatch.org/our-work/projects/nuclear-power-plant-safety-upgrades-ukraine

Macedonia urged to suspend controversial hydropower project

Strasbourg, Skopje, Prague – In the latest blow to planned hydropower dam in Macedonia’s Mavrovo National Park, the Standing Committee of the Bern Convention, the European wildlife treaty, added today its voice to growing calls to reconsider this reckless project. The spotlight is now on the European Bank for Reconstruction and Development (EBRD), the project’s main financier.

The heated discussions at the Committee concluded today with a resolution calling on the Macedonian government to suspend its plans for establishing over 20 hydropower facilities in the Mavrovo National Park until a Strategic Environmental Assessment, analysing the potential impacts, is completed.

In its resolution, the Committee refers to the park as “one of biodiversity hotspots in Europe, hosting a very high number of species and natural habitats protected by the Bern Convention”.

If materialized, the 68 MW Boškov Most hydropower plant is expected to cause irreversible damage to the fragile ecosystems in the park. Specifically, experts believe it could deal a fatal blow to the critically endangered Balkan lynx, for whom the park and its surroundings are the only known breeding area.

According to the latest scientific estimations, less than 40 individuals of this magnificent feline still remain in the wild.

This week’s discussions follow an independent expert study (pdf) into the planned hydropower developments in the Mavrovo National Park.

The study authors found the hydropower development to be “not compatible with the status of protection of the park,” and concluded that the Boškov Most project “as currently designed must be abandoned until the conservation status of the Balkan lynx population is brought back to a safe level and until when the Mavrovo National Park is no longer the only known core area of reproduction of this species.”

Yet, the Macedonian government has already secured EUR 65 million in funding from the EBRD for the Boškov Most project, despite the bank’s own environmental policy. The Committee’s decision also suggested international financial institutions revisit their involvement in the hydropower projects in the park in light of the outcome of an upcoming strategic environmental assessment.

“The Committee has now sent an unequivocal message to the Macedonian government and everybody involved in this egregious project that protected areas are there for a reason,” says Ana Colovic Lesoska, executive director of the Macedonian environmental group Eko-Svest. “In light of today’s decision, the Macedonian government should seriously reconsider its plans for hydropower developments in the Mavrovo National Park. Specifically, the government should engage the public and civil society in the decision making process, and it should also acknowledge Macedonia’s international responsibility to protect the wildlife and natural habitats in the park through allocating the necessary funds for the conservation of the Balkan lynx population.”

“Boskov Most has now become synonymous with endless trouble and it has already inflicted significant reputational damage on the EBRD,” says Fidanka Bacheva-McGrath, EBRD Campgin Co-ordinator with CEE Bankwatch Network. “Surely the EBRD realizes it is only going to get worse as a new strategic impact assessment buys the project some more time, but is unlikely to contradict numerous assessments done to date. The recommendation to suspend the hydro power plans should give the EBRD enough reason to pull out of the project.”

Yet, Boškov Most is not an isolated case. A study (pdf) released in May by Euronatur and Riverwatch found that 49 percent of hydropower projects in the western Balkans are planned to be located in protected areas. A new study to be released later this month will uncover the companies and banks, including the EBRD, behind this dam tsunami.

For more information contact:

Ana Colovic Lesoska
Executive Director, Eko-svest (member group of CEE Bankwatch Network)
ana@bankwatch.org
Tel.: +389 72 726 104
Skype: ana_colovic

Fidanka Bacheva-McGrath
EBRD Campaign Co-ordinator
CEE Bankwatch Network
fidankab@bankwatch.org
Tel.: +350 877 303097
Twitter: @fidankabmg

Bankwatch statement on hazardous arsenic waste in Dundee operations in Namibia

Last week Namibian news outlets reported on Bankwatch’s findings on the potential impacts of Dundee Precious Metals’ (DPM) operations in the country. Yet, in light of the company’s response we believe a number of points need to be stressed.

For more background on the Tsumeb smelter in Namibia, see Exporting toxic pollution from Europe to Namibia (Blog post | November 19, 2015)

First, inorganic arsenic is a highly toxic compound. Despite DPM’s statements to the media in recent days, arsenic trioxide, a by-product of the copper smelting process in Tsumeb, is “one of the most toxic and prevalent forms [of arsenic]”, according to the U.S. Agency for Toxic Substances and Disease Registry. “Small amounts of arsenic trioxide can lead to multiple organ damage and death.”

And this is not just our interpretation. DPM’s own 2014 Sustainability Report (page 63) states that “After the copper concentrate has been smelted, the extracted arsenic is classified as hazardous waste”.

We believe that information about the handling of this hazardous waste is not available to the public, even upon request. If DPM are happy about the situation in Tsumeb, why not make the relevant information public? Despite claims made by the company’s spokesperson, the information on monitoring of the waste disposal site, on exposure of workers and community members to toxic substances, and arsenic levels in the environment is not available on DPM’s website.

Moreover, since February 2015 Bankwatch has repeatedly approached DPM with requests for detailed information about the improvements in the Tsumeb smelter facilities, the environmental assessment of those improvements and the environmental permits. But so far the company has refused to supply any information with various arguments.

No less worrying is the fact Bankwatch’s request for information from the Ministry of Environment and Tourism has been ignored. Sent in early October, our letter to the Minister of Environment and Tourism Pohamba Shifeta, the ministry’s Permanent Secretary Dr Malan Lindeque, and the Environment Commissioner Teofilus Nghitila, remains unanswered.

We believe this information is of profound public interest, and both the government and DPM are ought to be as transparent and as publicly accountable as possible when dealing with such amounts of hazardous compounds.

For more information please contact:

Genady Kondarev
Campaigner “Public Funds For Sustainable Development”
Za Zemiata – Friends Of the Earth, Bulgaria (member group of CEE Bankwatch Network)
genady.kondarev@bankwatch.org

Daniel Popov
Centre for Environmental Information and Education
National Co-ordinator for Bulgaria, CEE Bankwatch Network
dpopov@bankwatch.org