EPS

Serbia’s national electricity company (EPS) – despite its long-standing relationship with the EBRD, and despite Serbia‘s obligation to align its legislation to the EU’s environmental, competition, human rights and climate policies – does not plan to reduce greenhouse gas emissions, to change the structure of its electricity mix in favour of renewables, or to respect human rights.

In October 2015 the independent Project Complaint Mechanism (PCM) of the European Bank for Reconstruction and Development found that the bank breached its environmental and social policy with regards to safeguarding the rights of communities impacted by mining operations of the Serbian state energy company EPS. The EBRD responded by requiring EPS to develop “an overall Resettlement Framework which will apply to all of its activities” and by committing to monitor the implementation of the plan.

As part of its new EUR 200 million loan to the Serbian electricity company EPS, the European Bank for Reconstruction and Development aims to assist with “identifying opportunities to improve environmental, safety, social, and labour governance and capacity, and on helping EPS to develop a more strategic approach to managing these issues”. As outlined in this briefing, so far the EBRD's fifteen-year partnership with EPS has not brought visible improvements in company practices and it is high time for the bank to prove that its engagement can add value.

Earlier this year, Serbian media reported that the EBRD was considering providing a new EUR 200 million loan for the financial restructuring of the state-owned electric utility power company of Serbia, EPS. The EBRD Director for Serbia, Mateo Patrone, was quoted by B92.net saying that the loan is aimed at helping the financial restructuring of EPS. Meanwhile, the EBRD's country strategy for Serbia, approved by its board of directors last April, highlights the bank's “key role in promoting energy efficiency and renewable energy” for the country.