Bankwatch

Home > Archives for Press release

Press release

Montenegrins criticise plan to bypass tender procedure in Pljevlja II coal plant procurement

Montenegrin NGOs Green Home and MANS have today sharply criticised Montenegrin government plans to choose a strategic partner for the EUR 300 million, 220 MW Pljevlja II lignite power plant [1] without conducting a proper tender. Instead the government has stated that it plans to sign an intergovernmental agreement and enact a special law on the project [2], thus signalling, according to the groups, that it plans to use a loophole in the law to avoid a tender procedure. [3]

The groups are also expressing concern about the environmental impacts of the construction of a new lignite power plant in Montenegro’s most polluted town, where a 210MW lignite-fired power plant is already operating.

The government has received preliminary offers for the project from five Chinese companies and three central European ones [4].

“The government’s abrupt statement that it will not hold a regular tender procedure and will decide on the investor, pass a special law and sign an intergovernmental agreement by the end of the year raises suspicions that deals have already been made behind closed doors,” said Ines Mrdovic of anti-corruption watchdog group MANS. “There is no good reason why this project should bypass regular procedures and be served up as a fait accompli when its benefits to the public have not been proven,” she added.

“There is also no clarity about what environmental and social costs will be borne by the investor and what will be subsidised by the public,” added Jelena Marojevic of environmental group Green Home. “Nothing has been said about how much expropriation will cost, or environmental protection measures, or decommissioning and rehabilitation of the existing facilities, and who will pay,” she continued.

Further doubt of the project’s value to the Montenegrin public has been cast by government admissions that the electricity from Pljevlja II may be intended for export to Italy rather than covering Montenegro’s own needs. [5]

Green Home and MANS are asking the Montenegrin government to publish an analysis of the economic justification, public interest and financial sustainability of the project, as well as an analysis of the health impacts of the new plant on Pljevlja’s already heavily pollution-impacted population before taking any decisions on Pljevlja II. It is found appropriate to continue with the project a regular tender procedure must be conducted.

For more information contact:

Jelena Marojevic
Green Home
jelena.marojevic AT greenhome.co.me

Ines Mrdovic
MANS
ines.mrdovic AT mans.co.me

Pippa Gallop
CEE Bankwatch Network
pippa.gallop AT bankwatch.org

Notes for editors:

[1] The Montenegro government and utility Elektroprivreda Crne Gore (EPCG) plan to construct a new 220 MW lignite plant at the site of the existing Pljevlja lignite power plant in Montenegro’s northernmost and most polluted town, Pljevlja. The plant would use lignite from the nearby Pljevlja mine. The process of finding a strategic investor is currently ongoing and several informal offers have been received (see note 4), notably from several Chinese companies.

[2] The further planned process is outlined at http://www.gov.me/sjednice_vlade/27 Item 22, p.8 and http://www.gov.me/sjednice_vlade/28 Item 1, p. 12-13 (both items in Montenegrin language), the latter of which states “Bearing in mind that the Working Group has examined all aspects of the project that it has withdrawn from publication of a tender due to its very difficult implementation, the following activities are proposed.”

[3] According to the Montenegrin Law on Public Procurement, it is allowed to avoid a tender procedure and sign an intergovernmental agreement on a project if the project is declared to be a project of special public interest.

[4] Chinese companies:

China Machinery Engineering Corporation (CMEC)
China Gezouba Group International Engineering Company (CGGC)
China Environmental Energy Holdings CO. LTD. (CEE HOLDINGS)
Powerchina – Hubei Electric Power Survey & Design Institute
China National Electric Engineering Co. Ltd., CNEEC

European companies:

Skoda Praha, Czech Republic,
Istroenergo Group IEG, Slovakia
‘Mixed consortium of firms’ Poland

Rusatom Overseas from Russia and SNC – Lavalin International from Canada also showed interest but did not submit offers.

[5] http://www.gov.me/sjednice_vlade/28 p. 72 and 73

EIB restricts – but does not eliminate – coal and other fossil fuel lending

Brussels — The European Investment Bank (EIB) announced today an energy policy that while introducing stringent criteria for financing coal power plants does not eliminate the possibility of support for coal or other fossil fuel energy sources.

The bank’s new energy policy will introduce Emission Performance Standards for all fossil fuel generation projects to screen out investments whose carbon emissions exceed a certain threshold. While not specified today by the EIB, the EPS level included in a 25 June draft of the policy was set at 550 gCO2/kWh (see below a table explaining what types of fossil fuel projects are excluded by various EPS levels).

“The EPS level proposed by the EIB in June (550) does not guarantee the elimination of all high carbon lending. We need at least a 350 EPS level in order to say that the policy document is serious about addressing climate change,” said Bankwatch EIB coordinator Anna Roggenbuck. “We therefore expect that the EIB review its proposed EPS soon after the discussion on 2030 climate targets is completed within EU.”

One of the most concerning aspects of the EIB draft was the “EPS exception” set out in the document for cases in which “a plant contributes to the security of supply” within the EU or when “it contributes to poverty alleviation and economic development” outside of the EU.

According to the EIB announcement today, the Board of Directors approving the policy has asked for additional clarifications on proposed exemptions to the Emissions Performance Standard.

“It is important to have clarification on these exemptions, because these can open the gates for any dirty coal project to receive financing as long as its proponents are able to convince that the loan is essential for energy security,” says Bankwatch energy campaigner Kuba Gogolewski. “How this issue will be clarified over the next period will say a lot about whether the EIB and EU Member States are indeed committed to the transition to low-carbon economies. While we see promising signs in today’s policy, much more is needed.”

Counter Balance coordinator Berber Verpoest says, “Despite the introduction of stronger emissions standards, the EIB keeps the door open to all fossil fuels including the possible financing of shale gas and also makes it easier to lend to large dams with negative social and environmental effects. More can and should be expected from a self-declared climate champion.”

Yesterday’s vote by the EIB – together with the World Bank guidelines for energy lending approved last week – is an important signal for the European Bank for Reconstruction and Development (EBRD) to modify its own energy policy in order to end its support for coal mining and coal installations.

On Thursday 25 July, the EBRD will present a draft of its future energy policy. Bankwatch and Counter Balance say that the draft document (already published) does too little to reduce climate-damaging financing and needs to be significantly improved by introducing emission reduction targets for the banks’ energy lending and setting concrete timelines and objectives for the bank’s renewables and energy efficiency support. [*]

[*] Read the Bankwatch position on the EBRD draft energy policy:
https://bankwatch.org/sites/default/files/briefing-EBRD-energypolicydraft-23Jul2013.pdf

For more information, contact:

Anna Roggenbuck
Bankwatch EIB coordinator
Email: annar at bankwatch.org
+48 509970424

Kuba Gogolewski
Bankwatch energy campaigner
Email: kuba.gogolewski at bankwatch.org
+48721440119

Berber Verpoest
Counter Balance coordinator
Email: press at counterbalance-eib.org
+32484508416

The EBRD plans more climate damaging loans in new energy policy draft

London – The European Bank for Reconstruction and Development (EBRD) published July 19 a draft (pdf) of its future energy policy. According to CEE Bankwatch Network, although the bank correctly depicts the urgency of transitioning towards low-carbon economies, it falls short when it comes to commitments: lending to fossil fuels is envisaged to continue, including for coal, the dirties of fossil fuels; and promises to support renewables and energy efficiency, though welcome, are not accompanied by persuasive benchmarks and timelines.

The EBRD, which between 2006 and 2011 (with the current energy policy in place) allocated 48 percent of its 6.7 billion euro energy portfolio to fossil fuels, plans to continue climate-damaging lending over the next five-six years, under the new policy.

On a positive note, coal lending criteria have been tightened via the introduction of the following set of criteria:

  • the project must be the least carbon-intensive of the realistically available options to meet forecast energy needs
  • it must be implemented in accordance with the highest standards; in the case of new power plants, this means compliance with the EU’s Industrial Emmissions Directive – IED (emission limits, the use of best available technologies); rehabilitation projects must achieve significant efficiency gains
  • the plant must comply with IED requirements in relation to carbon capture and storage readiness (including the availability of storage sites)

But, according to Bankwatch, the language of the draft would not prevent the bank from financing very dirty coal projects, such as expansion of the Kolubara lignite complex in Serbia or the Kosovo C plant near Pristina. In such cases, as it currently does, the bank would be able to defend financing using the argument that no investors presented clear alternatives to coal.

“The low-carbon transition appears to be a central theme of the draft strategy but when it comes to the fossil fuels sector, this only translates into a potential slight reduction in coal investments,” comments Bankwatch energy campaigner Ionut Apostol. “The draft acknowledges the carbon lock-in effect of fossil fuel infrastructure and that we must avoid this kind of effect, yet the general support for the hydrocarbons sector continues as usual. Oil and gas are the most common words used in this document. Not to mention that in this new draft, the bank opens the door to shale gas investments.”

The EBRD is set to publicly present its draft document in a public event in London on July 25, and the draft strategy is open for comments until September 30th.

CEE Bankwatch Network calls on the bank to use this time to reconsider its intention to finance coal in the future. Additionally, the EBRD should introduce a climate target for its energy sector lending (i.e., emission reductions achieved via the lending) focused on reducing carbon intensity and increasing energy efficiency and renewable energy investments while excluding the most climate damaging sectors. When it comes to the transition to low-carbon economies that the EBRD wants to support, measures must come with a concrete timeline and indicators of completion, in order to make sure that good rhetoric is translated into effective action on the ground.

“The new draft strategy of the EBRD proposes indicators for measuring the countries’ progress with energy efficiency and carbon intensity, which is definitely worth monitoring,” says Bankwatch’s EBRD coordinator, Findaka Bacheva-McGrath. “However, the strategy does not propose any targets and indicators against which the bank can measure the contribution of its own investments to achieving progress towards low-carbon economies – which should be of great interest to the public and its shareholders alike.”

For more information, contact:

Ionut Apostol
Bankwatch energy campaigner
Email: ionut at bankwatch.org
+40 721 251 207

Environment ‘hollowed-out’ of future Cohesion Policy – NGOs slam EP vote

Brussels, July 10, 2013 – The green potential of a third of Europe’s budget for 2014-2020 has been hollowed-out following a vote in the European Parliament today, according to Bankwatch and Friends of the Earth Europe. The committee for regional development (REGI) has approved proposals to reform EU Structural Funds – money intended to improve the economic well-being of regions – which include a last-minute shift from legally-binding to voluntary environmental spending.

Markus Trilling, EU Funds coordinator for Bankwatch and Friends of the Earth Europe, commented:

“Today’s vote has gutted a relatively promising guide for the 2014-2020 spending period, designed to strengthen sustainable, green spending measures across Structural Funds. There will be a lot of room for abuse by countries and regions.”

“Instead of delivering top-notch projects, investments and green jobs with taxpayers’ money, member states can now decide on the scope and relevance of environmental and climate spending within the EU’s Cohesion Policy, with little performance-tracking or orientation.”

The Cohesion Policy package approved by REGI today includes the possibility of financing gas infrastructure from regional funds that could otherwise have gone to renewables and energy savings projects in Europe.

Markus Trilling continued: “This is a missed opportunity for quality spending. But there is hope: if member states get their act together and think green when it comes to future spending then Cohesion Policy can still create green jobs, save energy and protect the environment, creating the sustainable, resilient economy that Europe needs.”

For more information, please contact:

Markus Trilling
EU Funds campaigner for Bankwatch and Friends of the Earth Europe
Tel: +32 (0) 484 056 636
Email: markus.trilling at bankwatch.org

Notes for the editors:

1. Read a briefing prepared by the NGO Coalition for Sustainable EU Funds, on the content of the proposals approved by REGI:
https://bankwatch.org/sites/default/files/briefing-CPtrialogues-analysis-09Jul2013.pdf

2. See a map of examples of good projects financed from the current EU Budget:
http://www.wellspent.eu/

3. Read about the struggle of turning some of the new Cohesion Policy principles in reality in Slovakia:
https://bankwatch.org/news-media/blog/democratising-cohesion-policy-slovakia-not-ready-put-eu-funds-spending-citizens-hand

Decisive European Parliament Vote on the future Cohesion Policy expected tomorrow

Brussels, July 9, 2013 – The European Parliament’s committee for regional development (REGI) will vote tomorrow on the European Commission’s proposals to reform EU Structural Funds. If approved, the watered-down text will significantly dampen Europe’s potential to promote renewables and energy savings, according to Bankwatch and Friends of the Earth Europe.

Markus Trilling, EU funds campaigner for Bankwatch and Friends of the Earth Europe said:

“We’ve ended up with a laissez-faire version of the Commission’s proposals, leaving a lot of room for abuse by countries and regions. Member states could finance gas infrastructure from structural funds with the current text.”

“Cohesion Policy still has the potential to create green jobs, save energy and protect the environment, creating the sustainable, resilient economy that Europe needs but only if countries and regions are responsible about future spending.”

The REGI vote is expected to take place tomorrow, between 10:30 and 12:30, in Brussels.

The vote will cover four separate regulations: for the Cohesion Fund, the European Regional Development Fund (ERDF), the European Territorial Cooperation (ETC) and the European Grouping for Territorial Cooperation (EGTC). In addition, it will cover most of the so-called Common Provisions Regulation (CPR) which sets out common rules for all the European Structural and Investment Funds.

The entire Parliament will still need to confirm tomorrow’s REGI outcome in a vote this autumn.

For more information contact:

Markus Trilling, EU funds coordinator for Friends of the Earth Europe and Bankwatch, will be available for comments after the vote tomorrow.
Tel: +32 (0) 2 893 1031
Email: markus.trilling at bankwatch.org

Notes for the editors:

The original Commission proposals are available here:
http://ec.europa.eu/regional_policy/what/future/proposals_2014_2020_en.cfm

The version put to vote in the REGI Committee can be consulted here:
http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&reference=REGI-OJ-20130710-1&language=EN

Read a briefing of the Coalition for Sustainable EU Funds, the main environmental NGOs in Brussels working on the EU budget, on the amended version of the Commission’s proposal here:
https://bankwatch.org/sites/default/files/briefing-CPtrialogues-analysis-09Jul2013.pdf

The EBRD’s silent shale gas coup in Tunisia

Tunis — On 9 July the European Bank of Reconstruction and Development will decide on a USD 60 million loan to Serinus Energy for a project to develop four oil and gas fields in Tunisia, which is also likely to include drilling for shale gas. Twenty groups in Tunisia and Europe are calling on the EBRD to reject the loan or at least postpone the decision until further studies are prepared.

The EBRD announced that the loan would finance “a multi-year continuous drilling programme, including the stimulation of existing wells and the drilling of new production wells, securing dedicated drilling and service rigs.” However it makes no mention of shale gas, even though in the last year precisely these four fields covered by the project (Sabria, Chouech Essaida, Ech Chouech and Sanrahr) were found to contain shale gas reserves.

While the EBRD depicts Serninus Energy as a „small private independent company in Tunisia,” Serninus Energy is simply the new name of Kulczyk Oil Venture, a subsidiary of Luxemburg-based Kulczyk Investments SA, founded by Polish entrepreneur Jan Kulczyk, the richest man in Poland according to Forbes. In the first quarter of 2013, Kulczyk Oil doubled its net earnings, and the company already fracks for shale gas in Ukraine.

Plans to develop the four fields to be financed by the EBRD include fracking in one of the fields, and possible horizontal wells – likely a prelude to fracking – in two others.

The exploitation of shale gas could have disastrous consequences in a country like Tunisia that faces a serious scarcity of water. Additionally the type of shale identified in the region is known as ‘hot shale,’ meaning that the underlying rock is radioactive. Also one of the concession is located in a sensitive area considered to have unique hydrological potential for the region and proposed for the UNESCO World Heritage List. Developing fracking here could irreversibly damage the area.

In spite of these concerns, the EBRD classifies this project as “category B”, meaning its potential impacts are not considered significant enough to require a full environmental and social impact assessment processes.

In a letter sent last week to the EBRD Board of Directors, twenty civil society organizations asked the bank to reconsider its support for Serinus Energy, citing the opposition to shale gas by movements in Tunisia and that a loan supporting a company that extracts unconventional resources would undermine the tenuous legitimacy of the EBRD in Tunisia.

Anne-Sophie Simpere, from CEE Bankwatch Network, said: “Tunisia will not benefit from this investments: three of the concessions are 100% owned by Serinus Energy, the company is proud to announce that Tunisia offers “highly attractive fiscal terms“ and the EBRD does not provide any information on the job creation expected. Serinus-Kulczyk Oil is a wealthy company that does not need public support, especially not to exploit fossil fuels, or dangerous unconventional fuels!”

“The EBRD extended its mandate to the North Africa region with nice rhetoric about support so SMEs, job creation, renewable energy and energy efficiency,” continues Simpere. „Yet, until now, the Bank seems to be rushing forward and comes up with dodgy projects poorly evaluated, for the sake of being present in the region. It cannot support a project that has a shale gas component without a proper evaluation and in a country where it is clear civil society is opposing unconventional fuels. It does not respect its own priorities nor the spirit of the revolution, and gives a terrible image of Europe and international institutions to the people in Tunisia.”

For more information contact:

Observatoire tunisien de l’économie, contact communication
economie-tunisie at mail.com

Reseau DOUSTOURNA
contact at doustourna.org
reseaudoustourna at gmail.com

Anne-Sophie Simpere
CEE Bankwatch Network, Brussels
Mobile: + 32485140327
annesophie.simpere at bankwatch.org