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Ombla hydropower plant, Croatia


Public protests in Zagreb against the Ombla hydropower plant

Success! The EBRD pulled out of the project.

Details on our blog

The Croatian electricity company HEP plans to build a 68 MW underground hydropower plant at a site which has been designated for protection as part of the EU's Natura 2000 network of important natural areas.

It is obvious that the construction of a large underground dam will have serious impacts on the whole karst water system, which includes various channels whose exact routes and their links to one another are not well understood.

More details in an 2011 open letter from civil society groups to the EBRD

The legality of the project is disputed as the Environmental Impact Assessment dates from 1999, contrary to Croatian legal requirements. The EBRD has approved a EUR 123 million loan for the project (November 2011) in spite of this, but withdrew from the project in May 2013. (See their response (pdf) to an open letter from civil society groups.)

With the loan, the project has lost most of its financing (the total costs are estimated with EUR 152,4 million) and thus its chances of going ahead are drastically reduced. Civil society groups led by Zelena akcija are calling on the Croatian government not to go ahead with the project.

Impact on protected areas

The Ombla hydropower plant would be built in the vicinity of the Vilina Cave, near the spring of the Ombla river - a natural site of special significance:


Proteus anguinus, the 'human fish', lives in the underground karst water system of the Vilina Cave
  • Underground karst rock formations that are associated to the spring contain a water system that runs for many kilometres through relatively soft and porous limestone rock.
  • The area is home to a unique subterranean fauna: five species of protected bats; the fascinating proteus anguinus (sometimes known as the 'human fish' because of its flesh-coloured appearance) and several kinds of aquatic cave snails.

The importance of the area has also been recognised internationally:

  • The spring and the karst rock formations will be a Natura 2000 site when Croatia joins the EU in 2013.
  • Croatia's underground fauna and the threats to it have already been covered by the BBC in its Newsnight programme.


The River Ombla near Dubrovnik.

HEP and the EBRD claim that the Vilina Cave itself will not be flooded. But it is obvious that the construction of a large underground dam will have serious impacts on the whole karst water system, which includes various channels whose exact routes and their links to one another are not well understood.

Illegal Environmental Impact Assessment

The project's Environmental Impact Assessment dates from 1999, making it illegal under Croatian law. A Natura 2000 impact assessment has not yet been carried out.

Nonetheless, HEP, the Croatian government and the EBRD have rushed to get the project approved. (That a Natura 2000 biodiversity assessment is carried out is now a condition under the loan agreement.)

In response to this inexplicable hurry to approve the project before it meets EBRD standards, Zelena akcija has submitted an official complaint to the EBRD (pdf).

Farcical project assessment

The technical assessment of the project by the EBRD has been quite bizarre: French consultants Tractebel were hired by the EBRD to examine the project and wrote a rather critical report saying that the project was technically risky and financially and economically unfeasible:

    “Undertaking the project in full, as designed at present, carries a high risk of the project not achieving its objectives." (p.9-10)

    "The project fails to recover both investment outlays and recurrent costs, in fact yielding a considerable cost in commercial terms... the project could only be implemented if it was heavily subsidized by the government". (p.122-123)

The report furthermore stated that the project would only make a marginal contribution to the project’s declared aim of stabilising Dubrovnik’s electricity and water supply:

    "As the tourist season in Dubrovnik coincides with the dry season, the impact of Ombla on the development of tourism in terms of alleviating the water shortage and power deficit in summer time can be considered as peripheral." (p.127)

When the report was leaked to Croatian media and NGOs, HEP and the EBRD responded that it was only a draft (in spite of it being labelled “final”), that once the consultant had better understood the project the issues were solved.

People following the case have not been convinced by these claims.


For more information contact Croatian Bankwatcher Marijan Galovic.

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Latest developments


 

Bankwatch in the media | August 27, 2015

Balkan governments are under mounting pressure to curb the construction of hydropower plants (HPPs) in national parks and wildlife areas, where hundreds of projects are planned or underway.

Environmental campaigners have already scored successes in halting new HPPs. In late July, Croatia’s environment ministry rejected Hrvatska Elektroprivreda’s impact study for its 68-MW Ombla HPP near historic Dubrovnik,

Courts in Republika Srpska (RS) have twice this year backed activists’ claims that environmental assessments on proposed plants in the Sutjeska National Park were flawed.

Blog entry | August 20, 2015

Building the Energy Union, the European Commission pretends that all is well for renewables in Croatia and unnecessarily fixates on diversifying gas supply instead of managing demand.

Blog entry | August 10, 2015

The Croatian Ministry of Environment and Nature Protection has refused Hrvatska Elektroprovreda (HEP)'s nature impact assessment for the Ombla hydropower project near Dubrovnik.

Blog entry | April 21, 2015

The project promoter of the Ombla hydropower plant in Dubrovnik, Croatia is still stubbornly pushing the project forward. A presentation yesterday of a new nature impact assessment did not offer answers to a range of outstanding questions, including the project's economic feasibility, impacts on locals and more.

Press release | January 13, 2014

The EBRD has failed to properly assess 3 hydro projects it has approved for financing in Macedonia, Croatia and Georgia, according to bank internal investigations initiated after formal complaints by Bankwatch member groups. NGOs caution that, more than mere slips, these improper assessments are a symptom of what could be called bankers’ overconfidence – that is, a tendency to assume that all environmental damage can be ‘managed’, which from a business point of view is much more convenient than admitting that some projects simply should not go ahead.

Balkans, hydropower

Publications

Study | June 25, 2013

South-eastern Europe is riddled with poor planning and corruption in the energy sector and its governments are proving slow to react to the challenges and opportunities offered by the decarbonisation agenda.

Advocacy letter | May 13, 2013

A new nature impact assessment of the proposed Ombla hydropower plant showed that the project could harm many of the 68 identified cave species, including the endemic ones. Based on these findings, civil society groups are calling on the EBRD to pull out from the project for which it has approved a EUR 123 million loan.

Bankwatch Mail | May 10, 2013

If there is one sector in which the EBRD has been causing particular controversy in recent years, it is the energy sector. From lignite in Slovenia to hydropower in Georgia and nuclear in Ukraine, the bank has financed a series of projects that have incurred opposition from various quarters. Now that the EBRD is revising its Environmental and Social Policy it's time to take a look at what needs to be learned from these projects.

Bankwatch Mail | May 10, 2013

At the time of writing, it is highly uncertain what the future holds for the controversial 68 MW Ombla underground hydropower plant. Approved for financing by the EBRD back in 2011, only recently has a nature impact assessment study finally been published, and no final opinions have been given by either state institutions or the EBRD on whether the project is to go ahead.

Briefing | May 10, 2013

In recent years the EBRD has increased its funding for hydropower plants (HPPs) of all sizes. While small hydropower plants are seen by many as a far safer technology than large hydropower plants, they too can cause interruptions in river flows, loss of biodiversity and the degradation of habitats, disruptions for migrating fish and a lack of water for irrigation and drinking in downstream communities. The updated EBRD Environmental and Social Policy should include safeguards to ensure that small HPPs are truly sustainable.