The energy director of the European Bank for Reconstruction and Development has made astonishing statements about coal investments prompting Bankwatch’s EBRD campaign team to react.

posted on the Bankwatch blog by Fidanka Bacheva-McGrath, Bankwatch EBRD campaign coordinator

At about the same time as scientists declared an unprecedented and increasingly dangerous CO2 concentration in the earth’s atmosphere, the Energy Director of the European Bank for Reconstruction and Development, Mr. Ricardo Puliti, warned in an interview with the guardian against an “ideological” approach to financing energy projects that only takes climate change into consideration. Clearly as a reaction to a widespread call to end coal financing, Mr. Puliti specifically ruled out a “No” to coal.

The news has been received with surprise and open criticism not only by environmental organisations. [*] Colleagues here at Bankwatch were particularly astonished by Mr. Puliti’s understanding that what scientists repeatedly called for was “ideological”: to reduce carbon emissions as quickly as possible. (We were also surprised by the claim the EBRD only financed two coal-related projects between 2006 and 2012. A quick look at the database for 2006-2011 – one that includes natural resources projects and is based on Bankwatch’s own methodology – shows 16 coal-related projects worth more than EUR 600 million.) [**]

Yet, Mr. Puliti is not the only one at the bank talking about balancing [the apocalyptic threat of] climate change with other priorities such as security of supply and affordability. We have heard the same repeatedly in the corridors and meetings at the EBRD’s annual meeting in Istanbul last week, which is why it is time to make a few points in reaction:

Ideology vs. science

First of all, intensified efforts to halt climate change are not urged by ideologists, but for decades by climate scientists, on the one hand, and by respected institutions like the International Energy Agency, on the other hand. Bankwatch’s demand to exclude coal projects from the EBRD’s portfolio is informed by these scientific analyses and supported by calls from several other international institutions (including other development banks) for a discontinuation of fossil-fuel subsidies and by the warnings about the economic “cost of inaction”.

Climate science suggests one meaningful target, to keep the rise in global temperature under a maximum of 2 degrees if catastrophic climate change is to be prevented. Seemingly blind to this goal, the EBRD has expressed great satisfaction and pride with ANY contribution to CO2 reductions, even if it enforces the status quo by entrenching coal in the energy mix of countries for decades to come.

A case in point is the Kolubara lignite mine which provides more than half of Serbia’s electricity. The EBRD’s investment will bring estimated emission reductions of 200 000 tonnes CO2 equivalents while the mine’s remaining lignite reserves will produce 540 million tonnes if burned. (Other examples are the Sostanj lignite power plant in Slovenia and potentially a lignite power plant in Kosovo.)

Does excluding coal contradict affordability?

Mr. Puliti suggests affordability as one possible reason to keep coal in the mix. But affordability calculations often favour fossil fuels, because promoters

• look at a relatively short time horizon, as fossil fuel prices are hard to predict for the life-time of a facility;
• excludes the related health costs: an estimated price tag of coal power generation is from EUR 15 to 40 billion per year in Europe as a recent report has calculated;
• counts renewables subsidies, but overlooks fossil fuels subsidies.

Security for whom and what?

A 2012 report by Corner House vividly discusses the pitfalls of “energy security” (and security of supply), both as policy and as rhetoric.

[T]he more that the term “energy security” is invoked, the less clear it is just what is being “secured” as a range of different interest groups use it to signify many often contradictory goals. The multiple meanings of “energy security” are an obstacle to clear thinking and good policymaking. They are also an open invitation for deception and demagoguery, making it easy for politicians and their advisers to use fear to push regressive, militaristic social and environmental programmes.

I’m certainly not accusing the EBRD of demagoguery or militarism, but our experience with the bank has often been that where security of supply is the core justification, alternatives to the damaging energy sources have not properly been assessed.

If you do not change direction, you may end up where you are heading

I have been struggling to understand why in our communication with the EBRD we seldom come to a shared understanding. In the endless policy consultations in which the banks engages us these days, if we get to agree, usually it is an agreement to disagree. In Istanbul we reached one conclusion with the bank’s staff, that perhaps our disagreements have to do with our incompatible definitions of ‘sustainability’. Why else would we consider the Sostanj lignite power plant an outrageous investment that will lock Slovenia into a high carbon future while the EBRD places it under its Sustainable Energy Initiative?

If the EBRD believes in a low-carbon transition and indeed wants to act as a responsible “active citizen” (Mr. Puliti) it should invest in projects that enable the fundamental shifts in industrial, institutional, social and political relationships that are needed in our region for an effective response to the climate threat. Anything less than that will not be fit for purpose.

[*] The EBRD’s Director of Communications stated on twitter that Mr. Puliti has been misquoted in the guardian article, referring, however, to the notion of a possible expansion of coal funding by the EBRD, not the points discussed in this blog post. By the time of publication, no correction has been made on the guardian’s website.

[**] More details, including an outline and explanation of Bankwatch’s methodology can be found in the report Tug of War: Fossil fuels versus green energy at the EBRD

Related articles

• European energy chief puts forward case for funding coal (guardian.co.uk)
• EBRD with disastrous start in Kosovo, European Parliament not amused (bankwatch.blogactiv.eu)
• Serbia’s unabated quest for coal causes tremors among mining communities | Claire Provost (guardian.co.uk)
• Arab organisations speak out against EBRD  dailynewsegypt.com)

A new report takes a critical look at the engagement of European development banks in Egypt after the popular uprisings in the Middle East and North African region. This article appeared originally on the Counter Balance blog and has been shortened and slightly edited.

posted on the Bankwatch blog by Berber Verpoest, Media officer for the Counter Balance coalition

Remember the Arab Spring, the wave of popular revolts that hit several Arab countries in 2011. They initially resulted in the ousting of cruel dictators and brought about impressive political changes. Following these events, the European Union decided to change its approach to the region and to channel in more resources from international financial institutions (IFIs) such as the European Investment Bank, the European Bank for Reconstruction and Development and the International Monetary Fund.

The IFIs had longstanding relationships with the Arab countries. When a new wind started blowing they were willing to change their narrative but not necessarily their methods. The positive aura of change might have left most of the Arab countries but the IFIs have not. We think that the Arab Spring is worth an evaluation of the EU’s engagement in the region, and tracking the records of development banks in the Middle East should be a key priority.

The role of development banks

Our latest report “the great Middle East beanfeast” is a first attempt in that regard. Anders Lustgarten, the author of the report, investigates the role of the development banks in Egypt and how they responded to the Arab Spring. The report reads as a fierce critique to the policies of liberalisation and privatisation promoted by those institutions in Egypt and in the MENA region (Middle East and North Africa). It also targets the use of Public Private Partnerships (PPPs) and what we call the “financialisation of development finance”.

These development banks betray the spirit of the Arab Spring by the financial mechanisms they use, Lustgarten argues. While the slogan of the Arab Spring was ‘bread, freedom and social justice’, the policies and financial mechanisms used by the development banks mainly bring about the opposite.

PPPs, one of the priorities of the European Investment Bank when it is active in the region for example, are a tool to shift public assets into private hands. The list of privatisations under the Mubarak regime is impressive. It has been much contested and successfully challenged in court. Extensive recourse to private equity and the use of financial intermediaries typically benefit a small elite and subject the economy increasingly to the whims of the financial market. The increasing role of the private sector decreases the ownership of civil society and undermines the ability of the state to redistribute wealth. In brief, these were not exactly the aspirations of the Tahrir demonstrators.

Before and after the Arab Spring – a different approach?

Moreover, the author shows how the EIB and the World Bank were deeply entangled with the pre-Arab Spring dictatorships. The EIB has a significant track record of supporting the Mubarak regime for instance, lending nearly €4 billion to Egypt in the decade preceding the Arab Spring. In the whole MENA region, the EIB invested €15.5 billion in the same decade, twice as much as in any other region outside Europe.

So when those institutions now refer to “democratic development of the region”, it must be remembered that they loaned more under the old dictators’ regimes than to any other regime, and they used the same justifications to do so than as they use now. For instance, a 2004 joint financial package for the MENA region between the EIB, World Bank and EU Commission claimed that it “will be used to lend support to institutional and economic reform, human rights and democracy projects, the fight against poverty and education and training”.

Read more

• More on the launch debate that included a discussion on the use of the term “development mafia” on the original Counter Balance blog post
• The Great Middle East Beanfeast – How ‘Development’ Banks are Using Public-Private Partnerships to Carve Up the Arab Spring Countries (20 page report, pdf)
• PPPs: Not a silver bullet for public infrastructure. Our website Overpriced and underwritten exposes the hidden costs of public-private partnerships.

The European Parliament yesterday chastised the European Bank for Reconstruction and Development for its explicit interest in financing a new lignite-fired power plant in Kosovo. NGOs hope the bank will pay more attention to the Parliament than it did to civil society and energy experts so far.

posted on the Bankwatch blog by Ionut Apostol, Bankwatch EBRD campaign coordinator

At the end of last year, Kosovo became the newest member of the European Bank for Reconstruction and Development (EBRD). One of the first words we heard from the bank on their financing plans for the country indicated an interest to invest in a new 600 MW lignite plant, Kosovo C, planned to be built close to capital Pristina.

EBRD enters Kosovo: Past IFI failures must be heeded (Bankwatch Mail article)

In March this year, the EBRD concretely spelled out what it considers to be investment priorities in its draft strategy for Kosovo (pdf). In the document, the EBRD confirms its interest in giving a loan for the new coal plant, which has been for years pushed by the World Bank and the United States:

“The Bank will consider engagement in the implementation of the greenfield thermal power plant Kosovo C that is planned to start construction in the second half of the strategy period, provided the project complies with EBRD environmental and social standards, its policy on financing energy projects and delivers high transition impacts.”

Following comments to the draft strategy from Bankwatch and Kosovo coalition KOSID and a letter complaining about the hurried nature of the strategy’s public consultation process, the European Parliament now adopted a resolution that strongly criticises the EBRD’s plans. It reads:

“regrets that the EBRD is planning to support new lignite capacity (Kosova e Re) in its draft country strategy, and calls on the Commission to take action to contest plans such as this that run counter to EU climate commitments.”

(See more details in our press release from today)

Coal is misguided progress for Kosovo

The EBRD’s enthusiasm for this project is misguided. Burning coal to produce electricity at the country’s two existing coal plants (Kosovo A and Kosovo B) is already costing the country over 100 million euros annually only in health related issues, with people dying prematurely and children suffering respiratory diseases, and building a new plant will perpetuate these health problems.

Importantly, Kosovo already produces more energy than it consumes domestically, but much of it is wasted due to inefficiencies in the distribution network, lack of insulation in buildings, irrational usage such as using electricity for heating, commercial losses (ie. electricity used but not paid for, eg. through illegal connections to the network or unpaid bills).

These are the areas where the EBRD should be focusing on, particularly on remedying technical inefficiencies. In addition, providing support for energy efficiency measures for residential buildings would come a long way in avoiding energy waste and reducing bills for households. Kosovo does not need new coal generating capacity; it needs to stop wasting energy and to explore sustainable energy sources.

An alternatives analysis carried out by the Renewable & Appropriate Energy Laboratory Energy & Resources Group University of California, Berkeley, shows that in the period until 2025, Kosovo can meet its energy needs through energy efficiency improvements, wind and hydro energy, as well as biomass and geo-thermal. This scenario would also result in three times more jobs created for the country, and address environmental problems.

Is the EBRD listening?

And these are the messages that Bankwatch sent to the bank in our contribution (pdf) to the public consultation of the strategy draft. The problem is, it seems that the bank could not care less about what NGOs like ours or our colleagues from Kosovar coalition KOSID, who submitted similar points (pdf) to the attention of the bank, have to say.

Why? Because the deadline for submitting the inputs was yesterday, April 18. But the final country strategy document will be approved by the EBRD on May 1, less than 10 working days later. It is highly unlikely that the bank has time and capacity in this interval to seriously assess the fundamental objections we raised.

Despite the bank bragging (pdf) about its openness to civil society in Kosovo, NGOs there are already frustrated with the hurried nature of the development of a document that will send strong but wrong political signals in Kosovo. KOSID and Bankwatch have this week sent a letter to the President of the EBRD (pdf) to criticise the rush of the adoption of such a momentous strategy and the superficiality of the civil society engagement.

The EBRD claims it has come a long way over the past years when it comes to cleaning up its energy portfolio and improving communication with stakeholders and certainly it has increased its renewables and energy efficiency investments.

With regards to the energy lending, however, Bankwatch maintains that the continued support for fossil fuels and above all, coal, undermines this progress and locks in an unsustainable energy infrastructure in many countries. And the start of operations in Kosovo does not set an example for an improved communication with civil society.

Read also

• European Parliament wants green energy, not coal, as part of Kosovo integration (Bankwatch press release)
• Kosova e Re lignite power plant, Kosovo (Project background)
• EBRD enters Kosovo: Past IFI failures must be heeded (Bankwatch Mail article)
• NGOs to banks: Never again Sostanj (bankwatch.blogactiv.eu)

Poland’s government is hasting to adopt liberal shale gas legislation. It tries to avoid any interference by factually excluding local opposition movements and by pre-empting the development of an EU wide framework on unconventional fossil fuels.

posted on the Bankwatch blog by Ola Antonowicz, campaigner in Polish Green Network

Amid the excitement about a European shale gas boom – that sooner or later will also get international public lenders interested – critical voices and any opposition to the controversial “fracking” technology are a thorn in the sides of governments dreaming of an end to the dependence on Russian gas and energy firms dreaming of a shale gas bonanza.

In Poland, where almost one third of the land area is subject to exploratory drilling licences, the government apparently wants to avoid any interference in the exploitation of the already “dwindling” reserves (so far every new estimation of the size of shale gas deposits has been a downward correction of earlier figures).

Liberty for oil companies

Firstly, the Polish government seems adamant to ensure shale gas investors a minimum of regulation rushing on with new rules on hydrocarbon extraction before the European Commission can finalise a regulatory framework for the extraction of unconventional fossil fuels in Europe.

The proposed law prescribes only very liberal rules for exploratory works, not taking standard environmental safeguards into account. More precisely, the law would allow exploratory drilling without environmental impact assessments even though such activities result in the same types, extent and intensity of environmental impacts as the actual exploitation. And All the while Poland has delayed the nationalisation of Europe’s Renewable Energy Directive so long that it is being taken to court for it.

Gagging environmental opposition

Secondly, while quarrels between Warsaw and Brussels are not unexpected, even Polish citizens are being treated as a nuisance rather than legitimate stakeholders when it comes to the energy sector.

Among the most disturbing aspects of the mentioned law is the attempt to shut out local initiatives from public consultations. Environmental organisations would only be allowed to participate in administrative procedures if they were active in the field of environmental protection and nature conservation during at least 12 months before the administrative procedures began.

In practice this means that organisations formed specifically in reaction to newly planned investments (such as shale gas exploration works) would be excluded from the decision making processes concerning these same investments. Worse even, if a procedure lasts for some time already the required timeframe of being active can be prolonged to an absurd dozen years or so.

This is yet another attack (see an older example here) on Poland’s civil society and an attempt to limit its ability to influence our country’s energy policy. Shale gas exploration, open pit mines and similar endeavours obviously lead to opposition on a local level. Communities and villagers that fear health, environmental and geological impacts often quickly and spontaneously organise to protect their homes and themselves – like in Zamojszczyzna, where Chevron had started exploratory drillings.

The reason brought forward by the Polish Ministry of the Environment illustrates the impossible bigotry that environmentalists have to face in Poland:

“Sometimes in Poland people set up an environmental organisation, but only in the name. Just because they want to make some kind of business, and say we will stop your investment because we will sit in the court for years and you will never do your job, until you do this or that.” (Source: RTCC)

All short-term local protest movements are simply and by decree rejected as a bunch of opportunistic racketeers. This is the Polish environment ministry speaking!

The doubts surrounding shale gas exploitation in Europe are still extensive and range from the obvious environmental dangers to the fundamental question whether shale gas is at all economically viable in Europe.

Poland is rushing to create new, liberal legislation regarding the exploitation of shale gas. But haste makes waste. We could avoid some far reaching mistakes by waiting for the finalisation of the EU’s “Environmental, Climate and Energy Assessment Framework to Enable Safe and Secure Unconventional Hydrocarbon Extraction”. That way we could use the experience and knowledge of other EU member states regarding hydraulic fracturing. We could avoid amending our law yet again when European legislation is put in place.

Instead, Poland is again putting profit before people. And by trying to silence legitimate concerns early on, the Polish government yet again proves just how bad our country is for the environment and for its own citizens.

The news circulated yesterday that Mikhail Beketov, a Russian journalist who campaigned against corrupt practices in connection to the planned highway construction through Khimki Forest, has died. This guest post by Mikhail Matveev and Ivan Smirnov, fellow Khimki activists, tells Beketov’s story.

posted on the Bankwatch blog by Mikhail Matveev and Ivan Smirnov, Khimki forest activists

On April 8, 2013, former editor of independent local newspaper Khimkinskaya Pravda Mikhail Beketov died in hospital. He was 55, but for the last four and a half years he has been severely disabled. On November 13, 2008 Mikhail Beketov was found unconscious near his house in the village of Starbeyevo. He was beaten extremely severely with baseball bats. He is thought to have been laying on the ground in the cold for around 36 hours. Though doctors saved his life, Beketov lost a part of his brain, his right leg, four fingers on both hands and remained disabled forever. He could neither walk, nor talk and needed constant external care. He underwent several surgical operations and had recently even been able move for short distances with the help of a prosthetic leg, however normal speech never returned. But all this progress appears to have been futile: now Mikhail Beketov is dead.

The official police investigation has still failed to find either the perpetrators or the masterminds of the attack. There was little doubt though that the attack was connected to his professional activity: beforehand, Mikhail received several “warnings”: his car was burnt, and his dog was killed. The administration of Khimki systematically pressured businesses that dared to advertise themselves in his newspaper “Khimkinskaya Pravda”, or took part in its distribution. Mikhail himself said that in case of a fatal attack one should seek those responsible in the Administration of Khimki.

The most likely explanation for the attack is that Beketov became the first casualty of the toll motorway construction project through the Khimki Forest. The project is still perpetrated by French construction giant Vinci jointly with Russian oligarch Arkady Rotenberg known for his “special relationship” with President Putin. Violence has become one of the hallmarks of the Moscow – St.Petersburg toll motorway project, and tens of criminal attacks against activists have been reported.

Beketov questioned the official version of the road across the Khimki Forest as an alleged way to solve the transport crisis in Khimki. He was the first person who publicly named corruption as the main reason explaining why the worst possible option was chosen for the motorway. The explanation was simple – protected forest lands were considered as a source of gross extra-profit for the perpetrators of the project. In one of his last articles headlined “The Khimki Forest Condemned” he attracted public attention to the plans of then Governor of Moscow Region Boris Gromov. According to his ruling, a 6-km-wide strip of land in Khimki Forest was ‘reserved’ for infrastructure needs of the future motorway. Now the project concessionaire denies any additional use of forest lands. Nevertheless, there is no official documents confirming it. The planned layout of the motorway in the project of new General Plan of Khimki reveals massive infrastructure object inside the forest except the motorway itself. It was symbolic for the Movement to Defend the Khimki Forest that in the last issue of Mikhail Beketov’s newspaper he summoned residents to a meeting to protect the Khimki Forest.

Of course, Khimki Forest was not the only point where Mikhail Beketov opposed the authorities. Since he began to publish the Khimkinskaya Pravda early in 2007, this newspaper became a truly alternative source of information for Khimki residents. He systematically criticized the course perpetrated by the authorities and took aim at the authorities’ neglect of the social and environmental interests of the majority in favour of the profit of a few “close friends“ of those in power. It is a pity that in the case of Khimki Forest, European business took side of those in power rather than of people like Beketov – Vinci still refuses to take seriously its contribution to corruption, destruction of the environment, and suppression of civil society in Russia.

Many top officials, including President (then Prime Minister) Vladimir Putin in October 2011, promised to find the criminals, who had attacked Beketov in November 2008. All these promises remained void. No culprits have been caught. And there is a strong suspicion that nobody has ever tried to investigate this crime seriously.

Responses to the EBRD’s justification for financing nuclear lifetime extensions

In an unprecedented effort to defend its support for Ukraine’s nuclear programme the EBRD publicly replies to some of our objections. Several colleagues sent us their (sometimes outraged) rebuttals, which we include here in our rejoinder to the bank’s arguments.

posted on the Bankwatch blog by Iryna Holovko, Ukrainian energy campaigner

Earlier this month, the European Bank for Reconstruction and Development approved a 300 million euros loan for the highly contended so-called “Nuclear Safety Upgrade Programme” in Ukraine.

Having faced strong opposition against the project, the EBRD went to unusually great lengths to publicly justify the loan decision. Besides a promotional video and a guest post on the FT’s beyondbrics blog, the EBRD’s specifically prepared a Q&A on their website on “What the opponents say – and how the Bank responds”.

Yet as my rejoinders below will show, the EBRD’s responses fail to dispel the concerns that opponents raised repeatedly. And to illustrate the great deal of disappointment that fellow environmentalists have expressed I will include some of the comments I received from them. (EBRD responses are small and in italic, quotes from colleagues are indented.)

1. The programme is basically a lifetime extension of nuclear reactors which instead should be shut down.

EBRD response: Nuclear safety is a consideration of the utmost priority at any time regardless of whether a unit has just been connected to the grid or has been producing electricity for decades. The upgrade programme includes measures to address well-known generic safety issues with reactors of this design irrespective of their age. [...]

The opposition to the project does not target the timing of the safety upgrades but the measures included in them. It has been pointed out repeatedly and in detail that the safety upgrades specifically include measures that prepare old nuclear units for running longer than their designed lifetime and cannot be considered mere safety upgrades.

Jan Haverkamp, Greepeace anti-nuclear campaigner added:

The EBRD has been informed of this issue [the lifetime extensions], did not want to address it and avoids addressing it by diverting attention in their answer here.

With this loan, the EBRD is net increasing the risk to the population of Ukraine and Europe, because the chance of a nuclear incident or accident increases with age exponentially. Whereas the upgrade may (or may not, depending on the risk assessment) decrease the risk in the few years of the expected technical lifetime, it does not do so over the entire extended lifetime during which the risk will increase in absolute terms.

2. Unit 1 at South Ukraine NPP initially did not get a licence beyond 2012. Does the EBRD have confidence in the independence of Ukraine’s nuclear regulator?

Energoatom has made a case to the nuclear regulator (SNRIU) for a longer operation period of SU1 arguing that the design life of the plant had not yet elapsed. Energoatom provided documentation, including information by the design institute, to substantiate the claim. After review SNRIU granted the extension of the licence until the end of the current fuel campaign. Due process was followed and we have no indication that any pressure was put on the regulator to influence its decision.
SU1 will go into a long outage at the end of its current licence, Energoatom will perform (safety and other) upgrades and seek a new licence. We have confidence that such a request will be duly reviewed by SNRIU and Energoatom will get a new licence if it can demonstrate that SU1 meets all the requirements. This process, however, has nothing to do with our project.

Unit 1 at the South Ukraine plant has been taken off grid already, because its lifetime has expired. The EBRD explicitly admits here that the decision on a new licence (and thus a lifetime extension) will be made after safety and other upgrades have been implemented.

These are exactly the upgrades of the Nuclear Safety Upgrade Programme that the EBRD now supports. In other words, the EBRD finances safety measures at a reactor whose lifespan is over, full stop. The unit has stopped working and Energoatom plans to resume its operations after the upgrades are completed.

And still the EBRD maintains that its project has nothing to do with lifetime extensions.

3. The Bank did not use its leverage sufficiently to bring Ukraine to a commitment to a fixed date for the phasing out of nuclear power production

The Bank has no policy basis for forcing the closure of any source of energy. The EBRD’s energy policy is mainly geared towards bringing about greater energy efficiency. However, the Bank has been given a clear mandate by its shareholders that: “it may provide financing to an operating facility in relation to nuclear safety improvements” (EBRD Energy Operations Policy).
Ukraine is currently reviewing its own energy strategy but has made it clear that it will continue to use nuclear power generation. Consequently, addressing the safety issues and raising of standards is the EBRD’s primary concern and its due role.

Greig Aitken, long-time IFI activist and editor of Bankwatch Mail wrote:

Support for nuclear safety, if it does result in the closure of unsafe facilities, is the kind of tough medicine Ukraine needs, but that is not what the latest EBRD loan is going to bring about.

The excuse being offered by the bank – that Ukraine has made a sovereign decision to extend nuclear lifetimes in which the EBRD has not been involved and which it cannot influence – is highly disingenuous. The implementation of this sovereign decision depends on external, European support. The EBRD is providing this support and is thus playing the role of an accessory to a dangerous, unsustainable policy agenda – moreover, one that has not been consulted with a transparent and democratic due process, and where the alternative of shutting down the outdated nuclear reactors has not been assessed.

The Ukrainian nuclear horse has bolted once again (destination unknown), and while the bank’s arguments are akin to saying it is now trying to close the stable doors, on this occasion the EBRD’s offer of ‘safety financing’ has clearly helped to prise those stable doors open in the first place. The attempt to paint this intervention as responsible financing is naive, not to say totally illogical.

4. The EBRD should rather invest in renewables and lessen Ukraine’s dependency on imports of gas and oil and nuclear power.

The Bank is taking a very active role in the promotion of “green” energy in Ukraine and in many cases serves as a forerunner. In 2012 alone the Bank invested over €200 million in energy projects based on renewables sources such as wind or water. At the same time, the Bank is a leading force in the drive to improve the country’s energy efficiency. Ukraine still has an energy intensity which is three times higher than the European average. The EBRD therefore strongly supports the present review of the country’s energy strategy and the commitment to reach an 11 per cent renewable energy target by 2020.

It is not at all clear if Ukraine’s commitment under the European Energy Community to reach the 11 per cent renewables target by 2020 is reflected in the latest draft of the Energy Strategy. The Ministerial Council claims (pdf) that the renewable share in gross energy consumption already now lies at 5.5 percent – a number that includes a mysterious ‘other sources’ category which are not necessarily renewable energy sources. And even the State Agency on Energy Efficiency and Energy Saving admits that the new Energy Strategy contradicts Ukraine’s commitments under the Energy Community.

While the EBRD claims to see Ukraine’s “strong effort to increase energy efficiency”, the new draft Energy Strategy is not at all that convincing: it aims at decreasing GDP energy intensity by 60% by 2030 which would take Ukraine only as far as Poland in 2006 and is hardly an ambitious target. The EBRD loan for the NPP safety upgrade programme will again allow the Ukrainian government to continue their “business as usual”. And we will wait another 10-20 years for a strong stimulus to seriously address the country’s high energy intensity.

Read more on Ukraine’s Nuclear Safety Upgrade Programme >>

Related articles

• Nuclear Safety Plan Has Ukrainians Worried  ipsnews.net)

Disappointed by loan disbursements to one of the dirtiest coal projects in Europe, almost 100 organisations have called on two public lenders to not repeat the same mistakes, ever.

Guest post on the Bankwatch blog by Barbara Kvac, Climate campaigner for Focus, Slovenia

In the beginning of March, the European Investment Bank and the European Bank for Reconstruction and Development paid out half a billion euros in loans for a new unit at the Sostanj lignite power plant in Slovenia (TES 6).

The reactions I got from fellow environmentalists who had been campaigning against the project expressed a tremendous disappointment over this decision. Not only were the two banks not courageous enough to take one of the numerous flaws of the project and pull out. They also presented their decision with what was perceived as positive spin.

Ignoring the ongoing corruption investigations, the EIB’s press release for instance ends with this wording:

“The new plant will generate up to 30 per cent more electricity with no additional C02 emissions.”

But “not more” carbon emissions is missing the point, what we need, as international bodies and various experts constantly point out, is fewer emissions. Instead, TES 6 alone will emit about as much carbon by 2050 as Slovenia as a whole would be allowed to emit if it is to reach European climate objectives.

This disappointment and the (justified) fear that the Sostanj lignite power plant may not have been the EBRD and EIB’s last controversial project has led 98 organisations to send an open letter (pdf) to both banks calling on them to never commit to such a misguided loan again. (You can read a quick summary of the letter’s content in Bankwatch’s press release from today.)

At this very moment the EBRD is considering a loan for the Kolubara B lignite plant in Serbia, and has recently published a draft country strategy for its newest member, Kosovo, which features as its centrepiece none other than the planned 600 MW Kosovo C lignite power plant.

With the energy lending of the EIB and the EBRD under review at the moment, this is just the right time to inscribe the lessons from the Sostanj disaster into their institutional memory. Coal should be off the table once and for all, as should any project under investigation for corruption. This applies to the Western Balkans as much as to any other region.

Related articles

• Members of European Parliament call on EIB not to finance Slovene lignite power plant (bankwatch.blogactiv.eu)
• Sostanj Power Station  sourcewatch.org)
• Anti-coal campaign in Kosovo puts focus on health (bankwatch.blogactiv.eu)
• Why the European Investment Bank received the ‘Coal Down’ Award (bankwatch.blogactiv.eu)

Following a fake press release in which the EIB ‘announced’ its divestment from coal, activists struck again the next day during the bank’s annual press conference. EIB President Werner Hoyer received the 2013 ‘World Coal Down’ award on behalf of all EU citizens. Unfortunately he had to put an end to the rumours of the EIB’s coal divestment, saying it was “complete nonsense”.

Originally posted on the Counter Balance blog

“Lets hope the EIB changes its mind by June, when it is supposed to have completed its energy policy review”, says Berber Verpoest from Counter Balance, a coalition of organisations behind the hoax. “The EIB presents itself as a climate action champion, but we don’t see how it can be a leader on climate action if it refuses to be a coal down champ. Coal is the dirtiest of all conventional fossil fuels.”

The aim of the action was to highlight this contradiction within the Bank’s operations. “But this isn’t just about the Bank. It’s EU member states, the European Commission and the European Parliament that ultimately decide what it does. These EU decision-makers know what they have to do and now it’s high time they showed us that they’re sincere in their desire to ensure a better future for generations to come”, explains Mark Fodor, executive director for Bankwatch, one of the organisations in Counter Balance. “The absurdity of this is that all we’re really asking is that the EU bank’s energy policy be aligned with the EU’s own 2050 sustainability goals. Simply put: no more investments locking us in into dirty energy infrastructure and a full shift towards renewables and energy efficiency.”

With this action Counter Balance and CEE Bankwatch hope to remind the Bank and EU policy makers of where their priorities should lie. It fits within the campaign of both organisations around the Bank’s energy policy revision. Besides getting involved in official consultations and advocacy meetings an important role is to raise awareness among EU citizens. “It’s a challenge to create attention around such a technical issue and it requires creativity to put it in the spotlight”, Verpoest explains.

It took us quite some preparation but luckily we could count on the professional assistance of the Yeslab, the team behind the know hoax machine The Yes Men.

Our starting point was to come up with a positive scenario for the EIB. Instead of blaming the Bank for bad projects we rather wanted to show what we think is the only way forward. We also wanted to encourage the bank because we think it actually can play a much more successful role in financing an energy shift. The award in the form of a smoke stack with flowers coming out – a design by Afreux – visualises this idea perfectly. “I’d love to see this in a real coal fired power plant. Maybe even Sostanj”, Fodor dreams out aloud referring to the highly controversial Slovenian coal plant for which half of a billion euros of EIB support is still pending.

Read more at bankwatch.org/eibhoax >>

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A Bankwatch competition for ideas for EU funds investments that benefit the sustainable development of European communities could offer inspiration for EU and national decision makers. At the final award ceremony in Brussels, the winners told us about their ideas and how EU funding could benefit their countries.

Posted on the Bankwatch blog by Patrycja Romaniuk, EU funds campaigner in Poland

While negotiations over the EU budget 2014-2020 are still in limbo with many Members of the European Parliament ready to veto the deal from two weeks ago many decisions on the nitty-gritty details of how exactly the (less than) one trillion euros will be spent are yet to come.

Coverage so far of the “big-numbers game” of EU budget negotiations left little media space for the voices of those who are to benefit of EU funded projects. Yet, for those who listen carefully, these voices are not only loud and clear, they can also help make decisions that are in the interest of European citizens and communities.

Such was the intention of Bankwatch’s Better Ideas competition, that in the second half of 2012 invited ideas for projects that best contribute to the sustainable development in people’s communities. The outcome stands in sharp contrast to a supposed EU fatigue: Not only the number of project ideas that we received but also their quality surprised our national campaigners. There is, for example:

• the community garden scheme in Stredokluky (CZ) that promises to create jobs in a rural area, provide local, ecological food and restore land and biodiversity;
• or the center for eco-passive building technologies in Kock (PL) that would offer consulting, training and production of eco-passive building technology and would employ around 15-20 people.

And the list goes on (pdf).

This week, the winners of the national competitions as well as jury members from all participating countries joined us in Brussels for the final award ceremony. It was inspiring to see all these people from across central and eastern Europe who care about the future of their communities, countries and “their” Europe.

We asked some of them to tell us what inspired them to take part in the contest, how they see their project’s potential to receive funding and what they would like to tell national and EU decision makers. See for yourself:

Read more

See a list of all winning projects of Bankwatch’s Better Ideas competition (pdf)

Read our positions on greening EU funds

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A meeting of civil society and the European Investment Bank’s Board of Directors saw a surprising degree of agreement between two often adverse groups.

posted on the Bankwatch blog by Anna Roggenbuck, EIB campaign coordinator

This week saw the second ever meeting between the European Investment Bank’s Board of Directors and civil society representatives. It may have been a less historical event than the first meeting in 2011, but it was still a welcomed chance for non-governmental organizations (NGOs) to discuss the EIB’s operations with the bank’s high level staff and directors.

The impression I got was that both NGOs and EIB appreciated the exchange and I’m glad the EIB committed to repeating and even intensifying similar meetings in the future.

At the session on climate action – more relevant than ever now that the EIB is reviewing its energy lending strategy – the EIB heard a loud and clear call from civil society organisations that it needs to more seriously tackle the European Union’s long-term de-carbonisation objective for 2050. As a starting point – an equally unanimous opinion among NGOs – the EIB should effectively stop its lending to coal, even if it is not a major part of its energy portfolio. Instead it should boost its investment in energy efficiency (highlighted also by Austrian Director Wolfgang Nitsche) and renewables financing, which can both still be improved.

I had a similar impression of general agreement at the session on promoting jobs and growth in Europe. NGO participants’ view that environmental sustainability and economic growth should not be seen as a trade off corresponded to EIB statements about the priority of long-term sustainability objectives. The admission by EIB staff that a too strong focus on GDP growth has its limitations rather unexpectedly concurred with the opinions from NGOs, who called for corrections in the EIB’s operations for example through the application of life cycle analyses.

A more articulate, almost fundamental rift however marked the session on growth and development. Faced with calls for much more accountability and the full inclusion of local communities, the EIBs vice-president Pim van Ballekom claimed there was no need because the EIB was fully accountable – after all projects need consent from the European Commission and hosting country governments. That this isn’t nearly enough in the practice of development finance was exemplified by Robert Kugonza from the Ugandan NAPE who invoked the case of the Bujagali Dam to underline the urgent need for more transparency and greater inclusion of affected communities.

Similarly, while the EIB staff regards its year old Results Measurement Framework (REM) as a “game changer” in measuring the EIB’s impacts outside of Europe (a long-standing call by civil society organisations), NGOs complained they had no chance to get acquainted with the methodology because it hasn’t been made publicly available.

Read more

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More on the European Investment Bank, the ‘EU bank’

Background, publications and news on the Šoštanj lignite power plant

Finally, the afternoon seminar with the Board of Directors saw Slovenian organisations calling on the EIB directors not to finance the Šoštanj power plant – a project facing several corruption investigations at the moment. That the EIB has always treated all fraud and corruption allegations very seriously, as Secretary General Alfonso Querejeta emphasised, hopefully means that no money will be disbursed until the investigations are resolved.

Debating differing views can be challenging – no doubt both for NGO and EIB personnel – but there is no alternative to open discussions if the EIB wants to be an accountable institution. Therefore I appreciate the chance to discuss with the EIB Board of Directors and I am willing to continue on future occasions.

Yet, more important than constructive discussions is the practical implementation of what is widely seen as the right way forward. It is now up to the EIB management and staff to follow-up on some of the so far only abstract accordance.

Related articles

• Members of European Parliament call on EIB not to finance Slovene lignite power plant (bankwatch.blogactiv.eu)