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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

Complaint to EBRD highlights negative impact of mining on Mongolian herders

Ulaanbaatar, 04 July 2013. A group of Mongolian herders submitted today an official complaint to the Project Complaints Mechanism of the European Bank for Reconstruction and Development (EBRD), hoping to initiate a process of evaluation of the adverse impacts on their health and livelihoods of two mining projects financed by the international public lender.

The mining boom in Mongolia has raised high expectations for lifting the country’s population out of poverty, however, pastoralist communities that for generations raised their herds on top of the immense underground deposits now find their traditional lifestyle threatened with extinction.

The EBRD has approved investments for more than one billion USD in the Ukhaa Khudag coking coal mine [1], the Oyu Tolgoy copper and gold mine [2], as well as several more fuel and metal resources projects [3] in the South Gobi region that benefits from its closeness to China. Export of raw materials from these mines was meant to be done by rail, however, continuing delays with the rail project resulted in a several desert routes that fragment and spread dust over pastureland.

Therefore the PCM complaint seeks redress and compensation for the unmitigated negative impacts and damage caused by transportation of the commodities to the Chinese market. It should be mentioned that additional to export roads, a multitude of routes resulted from the construction of mine-supporting infrastructure, including water pipelines, river diversions, worker camps, airstrips, electricity transmission lines etc.

Ms Ts. Tsetsegmaa, Chair of Shuteen Gaviluut NGO, said on behalf of the group of complainants “Companies do not recognize the fact that reducing size, fracturing and contaminating pastures with dust and noise is having a negative impact on our livelihoods and health. Internal parts of animals we raise are no longer consumable due to which we lost a significant part of our traditional diet. Soon animals will completely lose their commercial value. Most herding families are forced to reduce the number of livestock bringing it down to less than the number needed for subsistence. We have nowhere to turn now.”

The grievances of the herders are a result of inadequate public consultations and impact assessments for the two projects: the Ukhaa Khudag Environmental and Social Impact Assessment (ESIA) focused on the advantages of the railroad over the road infrastructure, while the Oyu Tolgoi assessment is retroactive, lacking operational plans, and focusing on mine construction at the time when construction is almost completed and production is beginning.

Sukhgerel Dugersuren from OT Watch said “Mongolian nomads are land-based mobile people. Not recognizing their right to the pastures, which to date are regulated by customary tradition and not measuring impact on nomads’ livelihoods based on reduced, fractured, contaminated pastures by mine roads is just not acceptable, not compliant with the accepted international norms and standards set to protect land-based people. Energy Resource has a dirt-graded road, blacktop road and a planned railroad. Oyu Tolgoi has a dirt or graded and plans a blacktop and a railroad. The roads all go from north-to-south to China. All animal migratory and grazing routes go from east-to-west. Companies are not good at putting adequate passages in their roads blocking access to water and pastures for livestock and wildlife.

Richard Harkinson from London Mining Network said “The herders’ situation has been severely compromised by the lack of engagement by international public banks and mining companies with impacted and displaced communities. These mining projects will inevitably exacerbate competition for scarce water resources, massively increasing the vulnerability of already quite marginalised communities”.

For more information, contact:

Sukhgerel Dugersuren
OT Watch
+976 99,185,828
otwatch at gmail.com

Richard Harkinson
London Mining Network
+44 [0] 7563238179
research at londonminingnetwork.org

Fidanka McGrath
CEE Bankwatch Network
fidankab at bankwatch.org

Regine Richter
urgewald
+49 [0] 170-2930725
regine at urgewald.de

Notes for the editors

[1] In March 2010 the bank approved a USD 180 million loan for the UHG mine, see Project Summary Document
http://www.ebrd.com/english/pages/project/psd/2010/39957.shtml

after an equity investment of up to 30 million, see PSD
http://www.ebrd.com/english/pages/project/psd/2009/39820.shtml

[2] In February 2013 the EBRD approved financing of up to USD 400 million, see the PSD
http://www.ebrd.com/english/pages/project/psd/2012/41158.shtml

[3] Additionally in December 2009 the bank approved a USD 35 million loan to Leighton Mongolia for equipment for contract mining of the UHG mine, see PSD
http://www.ebrd.com/english/pages/project/psd/2009/40664.shtml

and in December 2011 it approved a loan of USD 350 million to finance the construction of the Tsagaan Suvarga copper mine project, and a USD 100 million stand by facility for the same project, see PSD
http://www.ebrd.com/english/pages/project/psd/2011/41547.shtml;

Background

on EBRD and mining in the South Gobi, see:
https://bankwatch.org/publications/spirited-away-mongolias-mining-boom-and-people-development-left-behind

on Oyu Tolgoi see:
https://bankwatch.org/publications/ngos-suggest-key-recommendations-oyu-tolgoi-copper-and-gold-mine-project-mongolia

(Photos and maps available.)

EU budget: green jobs to be found amidst disappointing deal

Brussels, July 3, 2013 – Following today’s approval by the European Parliament of Europe’s €960 billion budget for 2014-2020, Bankwatch and Friends of the Earth Europe are calling on individual member states to make the most of a disappointing deal by respecting green spending commitments – thereby boosting green jobs and truly sustainable investments.

Commenting after the vote, Markus Trilling, EU Funds coordinator for Bankwatch and Friends of the Earth Europe, said: “We’ve got agreement on the broad outline, it’s disappointing, but it’s time to draw a line under the discussions and get to work salvaging some green shoots from the battle-scarred budget. With quality at the heart of their spending plans, member states can still ensure environmental and economic benefits and help bring Europe out of crisis.”

A well-spent budget has the potential to create green jobs and bring Europe out of its economic and environmental crises, according to the organisations [1]. For example, a €1 billion investment could create 29,000 jobs if invested in the Natura 2000 nature protection scheme, or approximately 52,700 jobs in the renewables sector or 25,900 jobs in the energy savings sector.

Markus Trilling continued: “The millions of young unemployed across Europe may initially welcome the new emphasis on fighting unemployment, with a frontloaded €6 billion now being made available, but it’s unlikely to reach deep enough or wide enough. Committing to quality green spending across the entire budget, via the 20 percent climate mainstreaming agreed in February, would bring sustainable, long-term job creation in sectors such as renewable energy and energy savings.”

“In contrast, subsidies for carbon-intensive transport and energy infrastructure must be ruled-out from regional investment plans – they promote fossil fuel use and lock European economies into carbon dependency.”

More than a third (€362.7 billion) of the EU budget 2014-2020 is committed to agriculture as part of the Common Agricultural Policy (CAP). The majority of this will support industrial farming, benefitting multinationals and large-scale farms, while devastating biodiversity and small farmers, according to Friends of the Earth Europe [2].

Stanka Becheva, food and agriculture campaigner at Friends of the Earth Europe, said: “The majority of CAP subsidies will be used to prop up a failing system that benefits a few multinationals and industrial-scale farms. This will be a disaster for the environment, small farmers and developing countries. But, if at the national and regional levels the CAP supports the growing movement for quality, sustainable food, we could see benefits for local communities and the environment.”

For more information please contact

Markus Trilling, EU Funds campaigner at CEE Bankwatch/Friends of the
Earth Europe
Tel: +32 (0) 484 056 636
Email: markus.trilling at foeeurope.org

Sam Fleet, communications officer, Friends of the Earth Europe
Tel: +32 (0) 2 893 1012
Email: samuel.fleet at foeeurope.org

Greig Aitken, Bankwatch media support,
Tel: +420 549 212 517
Email: greig.aitken at gmail.com

Notes for the editors

1. Cohesion policy that works for the environment:
http://www.wellspent.eu/

Investing for the future: More jobs out of a greener EU Budget:
http://www.foeeurope.org/investing-future-Feb2012

2. CAP reform: failure for environment and small farmers:
http://www.foeeurope.org/cap-reform-failure-environment-developing-countries-small-farmers-260613