Press release

Belgrade – Next week, the EBRD is deciding whether to invest 80 million Euros in the Kolubara „environmental improvement” project in Serbia.[1] With the help of this money, state-owned Elektroprivreda Srbija (EPS) will expand lignite production in Serbia at the cost of forcefully resettling local communities. CEKOR and CEE Bankwatch Network urge the EBRD to rethink this investment.

„The EBRD should reject this loan for EPS because it would entail supporting a company whose integrity and corporate social responsibility are questionable at best,” argues Zvezdan Kalmar, Bankwatch Serbian national coordinator. „I personally witnessed the trauma of hundreds of families from Vreoci who for the past two weeks are watching their local cemetery unearthed by EPS under massive police presence. The company is going ahead with its plans to get the coal out from under Vreoci in spite of any human rights considerations: even though the community has not agreed to the EPS resettlement plan, the company — supported by national authorities — is already implementing it.”

Moreover, EPS is currently under investigation for corruption, as allegedly Kolubara management has been implicated in a number of different schemes involving equipment procurement and leasing and the sale of coal. [2] A recent internal audit at EPS itself revealed that serious irregularities committed by company management led to unjustified increases in EPS expenditures to the benefit of private companies. [3] According to the NGOs, the EBRD should not approve a loan to EPS before the official investigation is completed.

Finally, the EBRD should decide against this investment because it will likely support the expansion of coal in the power generation mix of Serbia, while at the same time indirectly limiting investment opportunities in more sustainable and climate-friendly energy developments. Burning coal already produces 70 percent of Serbia’s electricity. EPS is advocating for increased lignite production with an eye to export profits and, given the company’s close connection to several of Serbia’s ruling parties [4], expanded coal production has become a core part of the Strategy for the development of the energy sector in Serbia until 2015. [5] Public financial institutions such as the EBRD should not further encourage locking Serbia into carbon-intensive and coal-dependent development.

For more information, contact:

Zvezdan Kalmar
Bankwatch Serbian national coordinator
zvezdan@bankwatch.org
+381655523191

Piotr Trzaskowski
Bankwatch energy coordinator
piotrt@bankwatch.org
+48509162988

Notes for the editors

1. Project Summary Document: http://www.ebrd.com/english/pages/project/psd/2002/27005.shtml

2. National television channel B92 aired a series of documentary films exploring the nature and extent of the misuse of financial and other resources at the Kolubara complex and the financial and political repercussions. Links available via: https://bankwatch.org/sites/default/files/Briefing-KolubaraLignite-20Jun2011.pdf

3. http://www.b92.net/eng/news/politics-article.php?yyyy=2011&mm=02&dd=02&nav_id=72487

4. See the composition of the EPS board: http://www.eps.rs/onama/boardofmanagement.htm

5. See the Serbian energy strategy until 2015: http://www.euractiv.rs/odrzivi-razvoj/1938-bela-knjiga-eps-a-predstavljena-u-beu.html

Brussels / Warsaw – As Poland starts its EU Presidency today, serious doubts loom over its willingness to provide ambitious leadership on EU climate policies. Paradoxically, it is the EU’s own public banks which are sponsoring the country’s unfettered coal industry, the root cause of Polish climate scepticism.

85 percent of the electricity currently used in Poland comes from coal. Many of the country’s coal capacities are in dire need of modernisation or decommissioning. While the country could use this opportunity to invest in renewables and energy efficiency, the 2030 energy policy envisages that, two decades from now, 75 percent of the country’s energy demand will still be covered from coal. At the moment, 15 000 MW of new coal capacities are planned to be built in the next years.

In June, Poland was the only country to oppose the conclusions of an EU Environmental Council seeking to endorse the Europe 2050 roadmap calling for 25 percent emissions reductions by 2020 – 5 percent more than the current binding EU goal. According to Bankwatch, this step was justified by the country’s choice to continue relying on the most polluting type of energy generation.

The cost of the investments required in energy generation and infrastructure in Poland until 2020 range from EUR 41 billion to EUR 98.5 billion. Both the EIB (the European Investment Bank, the EU house bank) and the EBRD (the European Bank for Reconstruction and Development) have been involved in financing fossil fuel projects in Poland in the past and the EIB has approved one new coal project as recently as this March. It is the case of a hard coal CHP in Bielsko Biala, which is estimated to cost EUR 155.9 million from which EIB plans to finance half.[1] Several more coal plants are currently being evaluated by these banks for potential investments.[2]

“The Polish resistance to more ambitious climate goals for the EU has been criticized in Brussels, but at the same time some of the huge new planned coal capacities in Poland might not go ahead without finacial support from the European public banks,” explains Kuba Gogolewski, Bankwatch coal campaigner. “While Brussels does not interfere in countries’ energy mixes, the two banks have the freedom of rejecting coal financing and supporting renewables instead. Their preference for large coal projects actually encourages the development of this sector in Poland, a direct cause of the country’s reactionary positions on climate goals.”

For more information, contact:

Kuba Gogolewski
Coal campaigner, CEE Bankwatch Network
Tel.: (+48) 721 440 119

Notes for the editors:

1. Tauron – South Poland CHP in Bielsko Biala: http://www.eib.org/projects/pipeline/2009/20090549.htm

2. The most recent cases for EBRD being Belchatow II project in 2005 and Patnow II in 2003 (both lignite power plants).

Brussels, June 30 – The next long-term budget for the European Union offers ways to fight climate change and to move Europe’s economies to a sustainable development path but still leaves the door open for harmful spending, according to Friends of the Earth Europe and CEE Bankwatch. The analysis comes after the proposal for the EU budget post-2013 was presented in Brussels last night. [1]

The proposal for the upcoming budget (2013-2020) is 1,025 billion Euros, compared to 975 billion Euros for the current seven-year period. Guidelines for how the money – notably funds for Europe’s regional policy and agriculture, around 75% of Europe’s spending – will be used were also revealed by the European Commission.

Friends of the Earth Europe and CEE Bankwatch are now calling on national governments to take the opportunities provided by this budget to combat climate change, end the waste of resources, reverse biodiversity loss, and move their economies onto sustainable development paths. [2]

Markus Trilling, EU Funds coordinator for Friends of the Earth Europe and CEE Bankwatch, said: “This long-term budget calls for European public money to be spent wisely and smartly for the benefit of future generations, but in reality, it still allows for wasteful, fossil-fuelled spending. What we need next from the European Commission is strong regulation to make sure funds are invested in energy and resource efficiency and renewable energy and the promise of this budget is not simply empty words.”

CEE Bankwatch and Friends of the Earth Europe welcomed the proposed broad integration of climate and biodiversity priorities into all funding programmes.

The budget proposal includes a massive increase in infrastructure funding to 50 billion Euros. The money is destined for rebuilding Europe’s transport, energy and communication infrastructure, but it will also be directed to potentially polluting projects and there is no guarantee it will be spent sustainably.

“In the same breath the proposed budget is promoting smart green energy grids and polluting oil and gas corridors. The European Commission needs to ensure the huge allocation for infrastructure goes to low-carbon transport, energy savings, and smart grids,” added Trilling.

In the proposal national governments are given the flexibility to redirect agriculture funds between measures intended for environmental and rural development, and money potentially going to harmful farming practices. The proposal does not specify in which direction this redistribution might go.

Stanka Becheva, food campaigner for Friends of the Earth Europe, said: “Money which could transform European agriculture for the better must be safeguarded. It is essential that money for agriculture and rural development goes towards more environmentally and socially sustainable farming, instead of lining the pockets of large companies, factory farms and big landowners.”

The European Commission will propose how funds should be spent on Cohesion Policy and the Common Agricultural Policy this autumn. CEE Bankwatch and Friends of the Earth Europe believe these regulations must underpin the achievement of Europe’s international environmental commitments and prioritise and promote funding in these key sectors:

– Eco-innovation,
– Energy savings in buildings,
– Sustainable agriculture and fisheries,
– Nature conservation,
– Green infrastructures,
– Sustainable waste and resource management,
– Decarbonised transport.

For more information please contact:

Markus Trilling
EU Funds coordinator, CEE Bankwatch Network and Friends of the Earth Europe
Tel: + 32 (0)2 893 1031
Mob: +32 (0) 484 056 636
markus.trilling AT foeeurope.org

Stanka Becheva
Food campaigner, Friends of the Earth Europe
Tel: +32 (0) 2893 1025
stanka.becheva AT foeeurope.org

Sam Fleet
Communications officer, Friends of the Earth Europe
Tel: +32 (0) 2893 1012
Mob: +32 470 072 049
samuel.fleet AT foeeurope.org

Notes for the editor:

1. http://ec.europa.eu/commission_2010-2014/president/news/speeches-statements/2011/06/20110628_speeches_2_en.htm

2. http://www.foeeurope.org/sites/default/files/press_releases/200611_Budget_briefing.doc

Beirut/Brussels – In a joint statement a group of 67 civil society organizations from across 12 Arab countries are raising concerns about the EU and US backed financial aid packages for post-revolutionary countries in their region [1] on the grounds that it could damage the process of democratic transitions and divert the revolutions’ economic and social justice goals.

“The democratic change pursued by the peoples of the region is not served by increase in aid that comes tied with policy conditionality, further liberalisation of trade and investment, deregulation, and orthodox recipes that contributed to the injustices that Tunisian and Egyptian people faced” Kinda Mohamadieh, programme manager at the Arab NGO Network for Development.[2] “Such conditionalities should not be re-enforced through various forms of partnerships and aid packages promoted in the name of democracy support. The path to development of each country should be decided by its own people, via constitutional processes and national dialogue.”

Caterina Amicucci, Counter Balance: “Western governments tend to confuse the transition to democracy with a transition to liberalisation because it serves their interests, not necessarily those of the people they pretend to support. The European Investment Bank for instance – who will be lending the biggest share of EU money – has been active in the region for 30 years without tangible development results for the people. It has been criticised for its lack of transparency and its focus on fossil fuel projects [3].”

Importantly, according to the statement released by the 67 groups, the international financial institutions now sponsoring the aid package have been systematically promoting the unjust economic models that led to the impoverishment and marginalization of many in North Africa and the Middle East – and against which the pro-democracy movements rose. For example, as late as September 2010, the IMF was still lauding Tunisia’s “sound macroeconomic management and structural reforms over the last decade” and was even calling for more of the same by “contain(ing) public spending on wages and food and fuel subsidies.”[4] Those same economic models are now being promoted, as if nothing happened, via the conditionalities attached to the new aid package.

If the West really wants to support the democratic movements in the region, the 67 groups argue, it could start by helping with: completely eliminating policy conditionalities from aid addressed to support the peoples’ revolutions in the region, ensuring this support is directed to serve development priorities resulting from national participatory and democratic processes, assessing previous lending by development banks in the region, guaranteeing full transparency of any new aid, undertaking audits for debts taken on by formed dictators and cancellation of odious debt, and allowing for assessment and renegotiation of international trade and other economic commitments signed by past governments.

Read the statement of the Arab NGO Network for Development, signed by over 67 groups and networks here (pdf).

For more information, contact:

Kinda Mohamadieh
Arab NGO Network for Development
Tel: +961 1 319 366
kinda.mohamadieh@annd.org

Caterina Amiccuci
Counter Balance
+393498520789
camicucci@crbm.org

Notes for the editors:

1. The G8 group of most developed countries meeting in May this year called on the International Monetary Fund (IMF) and other multilateral development banks, mainly noting the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and the World Bank to deliver “support … to strengthen governance and bolster the business climate” in post-revolutionary North African and Middle Eastern countries. The G8 Summit announced that multilateral development banks could provide over $20bn for Egypt and Tunisia for 2011-2013. Along this, the G8 countries offered a package of “deep and comprehensive free trade agreements and investment” to accompany their efforts. The EU would provide an extra €1.24 billion to the foreseen €5.7 billion support to its southern and eastern neighbours. EC President Barroso noted that aid was not enough to respond to the socio-economic challenges in the EU’s neighbourhood and that “we (the EU) need to do more to boost growth and jobs… push(ing) for faster free trade agreements, targeted concessions and smart investment facilities”.

2. The Arab NGO Network for Development represent a network of over 200 NGOs across the Arab region, represented by 7 national networks and 23 NGO members operating in 11 Arab countries. See membership of the Arab NGO Network for Development: http://annd.org/network.

3. Of €1.87bn lent by the EIB to Egypt between 2006 and 2010, 92% was directed at energy projects – and four-fifths of this to promote fossil fuels. Of the €1.8bn lent to Tunisia in the same period, half went to energy projects, and 10% was invested in infrastructure for transporting gas to Italy.

4. IMF Public Information Notice (PIN) No. 10/121, September 1 2010 http://www.imf.org/external/np/sec/pn/2010/pn10121.htm