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EIB’s new transparency policy allows for more secrecy

Brussels – Yesterday the European Investment Bank (EIB) formally adopted a revised transparency policy including controversial exceptions to the disclosure of internal documents. This watered down transparency policy comes right before the bank will start implementing the € 315 billion Juncker plan and risks undermining the impact of EU recovery efforts.

The new transparency policy has been met with strong criticism from civil society organisations [1] because it would allow the EIB to establish a new presumption of confidentiality to keep secret internal investigations into irregularities such as corruption and maladministration.

Read also

European Parliament intergroup ITCO condemns new transparency policy of the European Investment Bank
Blog post | March 13, 2015

The exceptions also alarmed some of the Directors of the Bank (the Directors are representatives from the Member States who meet monthly to approve projects and the policies which guide the bank) who could not come to an agreement on the adoption of the final policy during their last meeting on 3 February 2015.

According to sources within the bank, it is the first time that there was no agreement on the adoption of a final policy proposed to the Board of Directors, illustrating how controversial this new policy is. During the public consultation process regarding the policy, the European Ombudsman’s representative also recommended against including the exceptions on of internal documents.

Despite the controversy surrounding the new policy, the EIB decided not to take into account the concerns raised and only made a minor cosmetic change to the policy before adopting it yesterday.

Xavier Sol, Counter Balance Director, said:

“Transparency is widely recognized as a precondition for good governance. The EIB’s new transparency policy comes right before the bank is expected to get Europe’s economy back on track by implementing the Juncker investment plan. The bank’s move towards secrecy might seriously undermine these efforts.”

Anna Roggenbuck from Bankwatch said:

“The new policy casts serious doubts over the bank’s commitments to improve transparency and may further undermine its already bad reputation given its terrible rankings on the yearly published Aid Transparency Index [2]. A number of cases in the past have shown the bank is very reluctant to proactively disclose proactively information of public interest and only acts under external pressure such as from the European Ombudsman [3]. European citizens deserve a much more transparent and accountable public investment bank.”

Toby Mendel, Executive Director of the Centre for Law and Democracy, added:

“It is most unfortunate that the Bank is moving backwards on this core democracy issue while other international financial institutions have been putting in place much stronger transparency policies. This is particularly ironic given the historic commitment of the European Union and its Member States to openness.”

Notes for editors:

1. Read here about the critiques to the new transparency policy:
http://www.counter-balance.org/eib-set-to-weaken-transparency-standards/

2. Year after year the EIB scores very low when it comes to transparency. Last year it ranked second to last of all financial institutions on the Aid Transparency Index

3. Read here about a recent case showing the bank reluctance to disclose crucial information:
http://www.counter-balance.org/long-awaited-investigation-into-glencore-for-alleged-tax-dodging-shows-eu-banks-lack-of-transparency-and-vulnerability-to-abuse/

For more information contact:

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

Anna Rogenbuck
annar@bankwatch.org

South eastern European countries must take climate action or face hefty bills, says new report


Prague, Belgrade, Kiev, Podgorica, Sarajevo, Banja Luka – Countries of the Energy Community [1] risk wasting hundreds of millions of Euros on outdated energy infrastructure if they do not adopt policies to tackle climate change, finds a new report released today by CEE Bankwatch Network and partners in four countries across the region.[2]

The report, commissioned by CEE Bankwatch Network and carried out by think-tank Change Partnership, is available at:
https://bankwatch.org/sites/default/files/EnCom-strategy-climate-action.pdf

The real costs of the planned increase of coal power generation, currently on the table in most Energy Community countries, will have significant impacts on their long term development, according to the study.

So far, none of these countries have adopted carbon pricing policies or taken them into account in their investment plans, but they will have to do so by the time of EU accession.

The new analysis shows that at current EU emission permit prices (Euro 5 per tonne of CO2), existing coal and gas power plants in the region will cost governments at least EUR 575 million each year.

And if materialised, the planned coal energy infrastructure would add additional EUR 133-317 million annually. If carbon prices rise to Euro 30 per tonne of CO2 – as expected to happen by 2025 as a result of a set of measures planned nowadays – these projects’ carbon price tag will soar to EUR 790 million – EUR 1.9 billion every year.

Right now Bosnia and Herzegovina, Macedonia, Kosovo, Montenegro, Serbia and Ukraine are planning to build a total of 14.82 GW of new coal power capacity, much of which would be additional to existing capacity.

By contrast, dropping the plans to build any new coal fired electricity capacity and replacing it with wind power generation, for example, would cost the region 25% less on average, by 2030. [see Figure 15 in the report]

Furthermore, the region is wasting a vast amount of electricity in transmission and distribution. According to the report, reduction of current electricity losses could bring financial benefits to all these countries worth approximately EUR 1.7 billion annually by 2030.

“The Energy Community needs to provide clear guidance on clean and cost effective energy investments in its contracting countries. Otherwise, the region would be put at an economic disadvantage, while the EU continues to decrease the use of fossil fuels in its electricity mix,” says Ioana Ciuta, energy coordinator with CEE Bankwatch Network. “There is no better time than now for these countries to shape inclusive, safe, clean and lower cost energy systems which the European Union itself is building at present, for millions of citizens.”

“The Energy Community needs to start taking climate issues much more seriously and deliver a 2030 vision which integrates the core EU social and environmental legislation into the region,” says Sanjeev Kumar of Change Partnership. “We expect the EU, which stands at the heart of the Energy Community to take immediate action in this regard.”

The findings in this report are of particular importance for those countries in the Balkan region and Ukraine that, in fact, plan much of their new-build electricity capacity for exports across the region and beyond. A dedicated comprehensive report, to be released by CEE Bankwatch on March 19, will outline the threat that such investments end up as stranded assets which are uneconomic to operate.

For more information contact:

Ioana Ciuta
Energy Coordinator, CEE Bankwatch Network
ioana.ciuta@bankwatch.org
Tel.: +40 724 020 281

Notes for the editors:

1. Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Moldova, Montenegro, Serbia and Ukraine.

2. The National Ecological Centre of Ukraine, the Centre for Ecology and Sustainable Development (Serbia), Green Home (Montenegro), and the Center for Environment (Bosnia and Herzegovina)

Southeastern Europe deserves a better energy future – and now is the time to ensure it happens


Brussels, Prague, Sarajevo – The revision process of the Energy Community Treaty [1] is entering its final lap these days, offering a real opportunity to transform member countries’ energy landscape. More than one year since the start of the Treaty revision, the second round of public consultations is closing today.

A number of proposals from the European Commission fall short of the original goals of the treaty – primarily, to bring energy, environmental and climate standards in southeastern Europe in line with the EU’s – but civil society groups, in comments submitted today, argue that the new Energy Community can and should seize the opportunity to achieve this.

In June 2014 the High Level Reflection Group (HLRG) [2] released a recommendations report that was overall environmentally progressive.

The European Commission tabled its own set of proposals for reform (pdf) based on input from the Member States. Yet, unfortunately, some aspects of this version, if adopted, could allow the countries of the Energy Community to fall behind on EU energy, environmental and climate standards.

“For example, the Commission’s text suggesting it would be too difficult for Energy Community countries to transpose the EU’s Air Quality Directive is essentially going against everything that EU climate and energy policies stand for,” says Ioana Ciuta, Energy Co-ordinator at CEE Bankwatch Network.

Heavy reliance on coal burning for electricity in southeastern Europe has also meant a heavy toll on public health. A recent study by the Tuzla-based Center for Ecology and Energy estimated that in 2013, coal power plants in Bosnia and Herzegovina’s Tuzla region, for instance, caused the loss of approximately 4900 years of life, 131,000 lost working days due to heart and respiratory illnesses and around EUR 61 million in economic cost.

But this is not a given. In their input submitted today to the public consultation, a group of 18 leading NGOs [3] active in the Balkans region is insisting that the treaty’s review is an opportunity to bring to southeastern Europe the energy and climate policies these countries deserve to make substantial and sustainable development.

“It’s not just about promoting any energy investment, but rather about advancing carefully chosen energy sources,” says Garret Tankosić-Kelly, SEE Change Net Principal. “If the Energy Community doesn’t have increased monitoring and enforcement capacity, energy investments currently planned could end up infringing EU acquis or become stranded assets in the medium-long term.”

Therefore, a serious reform of the Energy Community’s institutions is needed, and particularly the Secretariat which is currently lacking sufficient staffing in the environment and social fields.

“The Energy Community needs to develop beyond merely serving the business sector,” concludes Dragana Mileusnic, Energy Policy Coordinator for South East Europe at Climate Action Network Europe. “It has to start making a difference for communities severely affected by obsolete and polluting power plants and a weak rule of law.”

Notes for editors:

Read more about the European Community:
https://bankwatch.org/campaign/coal/energy-community

1. The Energy Community brings together Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Moldova, Montenegro, Serbia and Ukraine – and soon also Georgia – with the goal of creating a common energy market between the EU and some of its neighbours. It also aims to extend the EU internal energy policy to south east Europe and the Black Sea region. This includes the obligation for member countries to implement EU environmental law and renewable energy targets.

2. The expert group which was commissioned by the Energy Community to review the institution’s set-up and working methods and to propose directions of reform.

3. CEE Bankwatch Network; Climate Action Network Europe; Health and Environment Alliance; SEE Change Net; EDEN – Environmental Center for Development, Education and Networking (Albania); Ekolevizja (Albania); CPI – Public Interest Advocacy Center (Bosnia and Herzegovina); CZZS – Center for Environment (Bosnia and Herzegovina); DOOR (Croatia); FSO – Forum for Freedom in Education (Croatia); ATRC – Advocacy Training and Resource Center (Kosovo); Front 21/42 (Macedonia); Analytica (Macedonia); Eko-Svest (Macedonia); Green Home (Montenegro); MANS (Montenegro); CEKOR (Serbia); Fractal (Serbia)

For more information contact:

Ioana Ciuta
Energy Coordinator, CEE Bankwatch Network
ioana.ciuta@bankwatch.org
Tel.: +40 724 020 281

Dragana Mileusnic
Energy Policy Coordinator for South East Europe, Climate Action Network Europe
dragana@caneurope.org
Tel.: +32 471 438 442

Masha Durkalić
Communication Officer, SEE Change Net
masha@seechangenet.org
Tel.: +387 33 213 716

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Image: Contracting parties and candidates to the Energy Community. (Original image by Wikimedia user Ssolbergj – available at http://commons.wikimedia.org/wiki/File:Energy_Community.svg)

Dr. Jekyll and Mr. Hyde: An Energy Union torn between clean energy and fossil fuels

Brussels – The vision of Energy Union to be outlined by the European Commission tomorrow proposes making Europe a world leader in renewables and energy efficiency, but at the same time envisages significant investments undermining that goal, such as gas import infrastructure, nuclear and dirty unconventional fossil fuels.

“The latest vision of Energy Union emerging from the Commission has all the right language about a low-carbon and environmentally friendly Europe and empowering European citizens when it comes to their energy consumption,” comments Bankwatch’s Markus Trilling. „But the measures proposed to bring about this vision include more imports of gas from the Caspian region, for instance, or drilling for shale gas. This is non-sense. Europe has to finally face the fact that resilience and sustainability cannot be achieved while at the same time giving in to the gas lobby or cooperating with authoritarian leaders from Central Asia.”

A draft of the Commission proposals for the Energy Union circulated during February, elements of which have been confirmed by Climate and Energy Commissioner Miguel Arias Cañete during the Riga summit, includes mentions of the importance of financing the construction of the Southern Gas Corridor, a system of mega-pipelines meant to bring gas to Europe from the Caspian region. Yet, according to estimates by the Commission itself, under all scenarios, gas demand in Europe will decrease by 2050, raising concerns that the Southern Gas Corridor will turn into just another stranded asset.

The energy mix envisaged by the Commission further includes nuclear power, coal with carbon-capture and storage, liquid natural gas terminals and unconventional fuels.

“While the ‘energy efficiency first’ concept was expounded by Climate Action and Energy Commissioner Cañete in Riga, we see no evidence so far that the EU plans to walk the talk,” adds Trilling. “Instead of focusing on the decarbonisation and the decentralisation of Europe’s energy system, the EU proposes to fast-track for financing fossil fuel projects which have no added value for Europe and will likely end up as stranded assets.”

In a common position similarly leaked to the public during February, Poland, the Czech Republic and Slovakia insisted that the Energy Union must not discriminate among energy sources. Anything from coal through unconventional oil and gas to nuclear should be available to the Member States to reach energy security, climate policy and competitiveness objectives, argued the Central European countries.

“European citizens are no fools to believe that dismissing a clear strategic goal of becoming number one in renewables and sticking to expensive, carbon intensive or obsolete solutions will bring us the competitiveness and independence we are striving for,” comments Bankwatch’s Ondrej Pasek. “Even though the Energy Union does not actually require the central European countries to get rid of coal, gas or nuclear from their energy mixes, if we are to have an effective common energy policy, there is no other way but having a clear focus on technologies that are both low-carbon and competitive: the renewable sources.”

Notes for the editors:

Read more about the Southern Gas Corridor:
https://bankwatch.org/sites/default/files/PipeDreams-LukOil-21Jan2015.pdf

More about the Juncker investment plan:
https://bankwatch.org/news-media/blog/juncker-investment-offensive-against-europeans-economy-and-environment

For more information, contact:

Markus Trilling
Bankwatch EU funds coordinator
Markus.trilling@bankwatch.org
+ 32 484 056 636

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Image credits: Alex Eylar (CC BY-NC-SA 2.0)

EBRD must not back Egyptian coal imports

Cairo — Ahead of tomorrow’s Board vote on the EBRD loan to CEMEX Egypt, a number of civil society organisations [*], inlcuding Egyptian groups, urge the bank to reject this project not only because it involves support for dirty coal-based production but also because it actually means promoting the plans of a repressive government despite opposition from civil society.

On February 25, the EBRD Board of Directors is expected to vote on whether to approve or not a loan of up to 50 million euros to Assiut Cement Company, an Egypt subsidiary of multinational CEMEX, which would constitute almost the entire costs of a programme of “fuel conversion and environmental upgrade”. In reality, the loan would allow the company to switch from natural gas to a combination of coal and alternative fuels (biomass, refuse-derived fuel, and/or tire-derived fuel) for its cement production operations.

“This is a loan that goes completely in the wrong direction, by making the switch from natural gas to coal which is much more polluting. Having no domestic resources, Egypt will also need to construct the whole coal import infrastructure from scratch, an expensive wasteful endeavour taking away the money from solving the burning social issues that plague the majority of the Egyptian citizens” says Bankwatch’s MENA coordinator Kuba Gogolewski. “Of great concern are also the heavy metals such as mercury and lead which will be released in Egypt’s waterways as a result of these industrial processes, especially in the context of this country’s poor track record in addressing industrial water pollution.”

“In addition, this project is promoted by the undemocratic government of Egypt, to the benefit of the cement industry which is very powerful in this country, and in opposition to civil society which has been campaigning against the switch to coal,” says Xavier Sol, Counter Balance director. “The EBRD, which has a mandate to promote democracy in its countries of operation, should not be seen anywhere near this project which would please multinationals and a repressive government and pass the pollution costs onto the citizens who have been opposing it.”

[*] Organisations signing the letter are: Bankwatch, Counter Balance, Platform, urgewald, Re:Common, Egyptian Center for Economic and Social Rights (ECESR), Centre national de coopération au développement (CNCD-11.11.11), the Habi Center for Environmental Rights.

For more information, please contact:

Kuba Gogolewski
Bankwatch MENA coordinator
Kuba.gogolewski@bankwatch.org
0032485358317

Xavier Sol
CounterBalance Director
xavier.sol@counter-balance.org
0032(0)28930861

Notes for the editors:

1. Read the letter sent by Bankwatch and other NGOs to the EBRD concerning this loan:
https://bankwatch.org/sites/default/files/letter-EBRD-Egypt-gas2coal-20Feb2015.pdf

2. Read about EBRD support for Egyptian coal projects:
https://bankwatch.org/bwmail/59/concrete-boots-already-new-ebrd-energy-policy-potential-support-egyptian-coal-projects- and https://bankwatch.org/news-media/blog/guest-post-ebrd-justification-supporting-coal-egypts-cement-industry-negligent

EIB Climate Action undermined by bank’s fossil fuel lending


Brussels — Ahead of a public consultation on the European Investment Bank’s Climate Action Programme tomorrow in Brussels [1], Bankwatch insists that, if the bank’s pro-climate efforts are to be effective, the EIB must give up its loans to fossil fuels and other climate-damaging sectors.

“Via Climate Action, the EIB dedicates about a quarter of its lending to climate-friendly projects, which is commendable,” says Bankwatch’s EIB coordinator Anna Roggenbuck. “But the irony is that what the EIB gives with one hand, it takes away with another: the bank is pouring billions into oil and gas infrastructure, polluting airports and highways and other carbon-intensive projects, all of which effectively undermine the achievements of the EIB’s Climate Action Programme.”

Just this month, the EIB announced that the Trans-Adriatic Pipeline (TAP) is one of its priority projects for 2015. [2] TAP is one of the pipelines in the so-called Southern Gas Corridor, a series of mega-pipelines meant to bring gas from Azerbaijan into Europe, and which the EU is pushing in spite of its own estimates that domestic gas demand does not warrant it. [3]

“In its paper on Climate Action that is the basis for public comments, the bank says that ‘overall GHG footprint of EIB-supported investment projects is assessed to be negative’, which is a highly misleading claim, only made possible by the use of a biased methodology,” says Bankwatch MENA coordinator Kuba Gogolewski. “What this means is that the bank is not counting a baseline scenario with low- or zero-emissions but rather compares the impacts of GHG emissions only to dirtier options.”

According to Bankwatch, the EIB needs to resolve this major inconsistency by proposing a comprehensive Climate Policy to guide all of its lending. Such a policy would:

  • ensure that the entire EIB lending portfolio (not just the Climate Action part) is in line with the EU 2050 decarbonisation objective, an objective that the EIB must adhere to as the house bank of the EU;
  • assess the climate impact of all of the bank’s lending, including financial intermediary lending, and include an annual decreasing cap on absolute GHG emissions from all the EIB’s projects;
  • propose a clear plan to phase out fossil fuel lending by 2020 and plan for the phase out of other carbon-intensive lending;
  • actively seek out opportunities to invest in renewables and energy efficiency, especially in central and eastern Europe and other regions where energy intensity is high.

“The EIB says that the current review of its Climate Action Programme is happening in preparation for this year’s Paris climate change conference,” says Roggenbuck. “But we’d be fools to believe that Paris will be a success with such patchy solutions as increasing climate friendly lending here and there. We must reduce emissions drastically and the most common sense first step in this direction is to end public support for fossil fuels now.”

Notes for the editors:

1. Read the paper presented by the EIB as a basis for the public consultation on the Climate Action Programme:
http://www.eib.org/about/partners/cso/consultations/item/public-consultation-on-eib-approach-to-supporting-climate-action.htm

2. Read about the EIB announcement on TAP:
https://bankwatch.org/news-media/blog/european-investment-bank-confirms-plans-finance-trans-adriatic-pipeline

3. Read a recent Bankwatch study on the Southern Gas Corridor:
https://bankwatch.org/publications/pipe-dreams-why-public-subsidies-lukoil-azerbaijan-will-not-reduce-eu-dependency-russia

For more information, contact:

Anna Roggenbuck, Bankwatch EIB coordinator
annar@bankwatch.org
0048509970424

Kuba Gogolewski,Bankwatch MENA coordinator
kuba.gogolewski@bankwatch.org
0032485358317