An EBRD interpretation of biodiversity protection in the western Balkans

Here, at Bankwatch, we were waiting with curiosity for the date of November 8, when the Board of Directors of the EBRD would vote on whether to approve funding for two hydropower plants, one in Croatia and one in Macedonia.

Both plants look set to seriously damage the natural habitats of endangered and endemic species and both would be built in areas that are due to be Natura 2000 sites when Macedonia and Croatia join the EU. In both cases the environmental assessment has been inadequate.

In spite of these striking similarities between the two cases, on the same day, during the same meeting, the EBRD Board approved financing for Boskov Most, while postponing the decision over Ombla. (Postponement most likely means that the EBRD Board is looking into our objections to the project.)

Why this difference in treatment of the two projects? It's not really obvious. The only slight difference I can think of seems to be between a seriously incomplete Environmental Impact Assessment study (Boskov Most) and a seriously out of date one (Ombla) – hardly something that should justify the former.

The EBRD's response has been less than convincing . Although its explanations on Ombla have been much more detailed than on Boskov Most, we'll leave it to the reader to see if s/he would give the thumbs up to a project whose justifications include the following:

1. The EIA for Boskov Most failed to analyse the impacts on mammals, primarily the Balkan Lynx - a national symbol of Macedonia.

According to the EBRD, the lists of species found in the area, as noted in the annexes of the environmental impact assessment (EIA) for Boskov Most, is a sufficient analysis. Yet, the EIA contains only one page of text for analysis of the entire group of mammals.

2. Because of its location, the construction of the Boskov Most hydropower plant will damage a national park and a future Natura 2000 site.

The EBRD responded that the HPP will not disrupt the environment and future qualification of the site as Natura 2000. This is a rather naive statement. The Balkan Lynx is by far the most important Natura 2000 species in the area and its population has already decreased due to human activities. If the construction leads to the disappearance of the Lynx population, there’s a good chance the Natura 2000 qualification will follow suit.

3. The Environmental Impact Assessment for the Ombla HPP dates from 1999, and hence no longer corresponds to reality.

The EBRD replied that the Croatian Ministry of Environment considers the EIA still valid, and so does the bank as a result. For me it is less self-evident that such a statement by the Croatian Ministry of Environment can be taken at face value, particularly when the project promoter, HEP, is a state-owned company. The EBRD should at least commission an independent assessment done of the EIA's validity.

4. An independent study commissioned by the EBRD itself stated that the project is technically risky and not economically viable and that it could only be implemented if it was heavily subsidised by the government.

This bit is really bizarre. The EBRD responded that the version of the consultants’ study read by us was labelled „final” by mistake. Since then, according to the bank, the consultants have issued a „final-final” version of the same report which deems the project viable and no longer particularly technically risky. It looks seriously like a case of changing the results to suit pre-decided conclusions to me.

5. We raised the issue of the lack of a Strategic Environmental Assessment (SEA) for Croatia’s Energy Strategy – one of the national programmes with largest impact on the environment and the document on which the Ombla investment is based.

The bank responded with a noncommittal assurance that it will continue to follow the implementation of the EU SEA Directive in Croatia while at the same time restating that the lack of an SEA for the National Energy Strategy does not invalidate its support for the Ombla hydropower plant. Sorry, I thought the point of legislation was exactly that not sticking to it does invalidate what comes afterwards. Why is a strategic assessment of environmental risks not crucial for the approval of a project that will affect the environment of Croatia for decades to come?

The EBRD cannot continue to hide itself behind project promoters' pretenses of legality: either it sends a clear message to countries that environmental protection legislation is essential (including SEAs) or it should stop pretending that it is following EU legislation!

Original image courtesy of Lassi Kurkijärvi - CC 2.0