NEVER AGAIN – Sostanj lignite power plant financing slammed
Bankwatch Mail | 10 May 2013
Following confirmation at the beginning of March that the European Investment Bank and the European Bank for Reconstruction and Development are paying out half a billion euros in loans for a new unit at the Sostanj lignite power plant (TES 6) in Slovenia, 98 organisations sent an open letter to both banks calling on them to never commit to such misguided loans again.
This article is from Issue 56 of our quarterly newsletter Bankwatch Mail
Lidija Zivcic from Focus in Slovenia, one of the letter signatories, commented: “Over the last two years, we have seen the EIB and the EBRD become increasingly embarrassed by the TES 6 project, but at the same time seemingly not managing to find a legal way to extricate themselves from it.”
The letter, addressed to the banks’ respective presidents, sets out the main reasons why TES 6 was undeserving of public loans from the EIB and the EBRD:
- Slovenia will now have to choose between failing to reduce its emissions by 80-95 percent by 2050 and closing TES 6 before the intended date.
- No alternatives to a lignite or coal unit were seriously examined. With the investment of so much public money in a new lignite plant, the development of energy efficiency and renewables in the country will be crowded out.
- Health impacts from the project were not taken into consideration and it was left to civil society to find out that TES 6 would annually (from 2016 on) cause between 33 and 48 deaths and create between EUR 168 million and EUR 242 million in costs to the national economy.
- Corruption allegations about the project were public knowledge when the EIB approved the second tranche of its loan and the EBRD approved its loan in 2010. Even now OLAF, the European Anti-Fraud Office, has not yet concluded its investigation into the case, which still threatens to cause further problems for the project.
The NGO letter is available at: