Managers of EBRD-funded Kolubara mines in Serbia arrested for embezzlement

Belgrade -16 current and former members of the management of Serbian state-owned energy company Elektroprivreda Srbija (EPS) were arrested today and yesterday across the country over allegations of embezzlement of company funds. Some of these are people that the European Bank for Reconstruction and Development (EBRD) has entrusted this summer with managing an 80 million Euros loan for the development of the Kolubara lignite fields near Belgrade.

Among those arrested are: Dragan Tomic, EPS general director between 2004-2008 and currently an advisor in the Directorate for Strategy and Investments at EPS; Vladan Radovanovic, current deputy director of Kolubara mining complex and former director of Barosevac-Kolubara field; Zivojin Jovanovic, current director of all four mine fields at Kolubara; Milutin Bobic, current director of West Tamnava Field; Milan Petrovic, current director of Kolubara Field D. Tomic, who had apparently been informed about the possible arrest, was caught at the border with Macedonia, while trying to escape to Greece.

In August this year, the EBRD approved an 80 million Euros loan for "environmental improvements" at Kolubara lignite fields [1], in spite of receiving repeated warnings from NGOs CEE Bankwatch and CEKOR [2] that the management of EPS, which would oversee the developments, should not be entrusted with this money unless the police investigation - already begun at that time - clears them of all corruption allegations.

"Rather than wait for the results of the police investigation, the EBRD chose to rush into this loan rubbing its hands at the prospects of making profit from expanding lignite production in Serbia," comments Zvezdan Kalmar, Bankwatch Serbian national coordinator. "Funnily enough, the Serbian media is writing that the amount syphoned off EPS in the past decade amounts to almost 130 million Euros. If this management that the EBRD chose to give money to had been honest, Serbia would not have needed to indebt itself to the EBRD in the first place!"

For more information, contact

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

Notes for the editors:

1. Bankwatch and CEKOR argue that this money would in fact support the expansion of lignite power generation in Serbia to the tune of 700 MW.

2. See earlier Bankwatch press releases here or here.