The European Bank for Reconstruction and Development (EBRD) has announced that starting from January 1, 2020 it will not finance hydropower plants (HPP) projects in areas with high biodiversity.
EBRD’s new environmental and social policy sets stricter conditions for financing HPP projects, including higher transparency and standards for environmental protection.
It will also require commercial banks to set additional criteria for financing such projects, as well as reviewing and monitoring those that have already been financed. This will also apply to commercial banks operating in Albania, which will have to make sure that projects they have financed meet the new criteria set by the EBRD, before January 2020.
The changes in the EBRD’s policies have been hailed by environmental organizations, in particular by those opposing the trend of hydropower plants construction in the Balkans. Since 2005, more than 2,200 HPPs were planned to be built throughout the region, including protected areas. Some of the projects have been financed by international financial institutions such as the EBRD, European Bank of Investment (EIB) and World Bank (WB).
According to a study conducted by BankWatch Network, these international banks have supported at least 37 HPPs in protected areas, with loans amounting to a total of € 727 million.
Albania has been recognized as one of the countries with the most problematic policies in the region regarding controversial HPPs that raise environmental issues. Since 2002, governments have granted 183 concessions for the construction of over 524 HPPs. Almost every year, governments have allowed dozens of construction permits. 32 such permits were granted in 2018 only, amidst contestation and opposition by environmental organizations and civil society.
The hydropower sector in Albania has been considered as a good business opportunity by banks and companies, not sparing even the protected areas. For example, the EBRD has supported the construction of 8 HPPs in Albania, three of which are situated in protected areas, such as Shebenik-Jabllanicë or Martanesh, projects of which were reviewed after environmentalists contested them.
According to the BankWatch Network study, 32 of the recent HPP projects in Albania were financed through loans from commercial banks, some of which have financial ties to the EBRD. Of these projects, 15 are planned to be constructed in protected areas.
Intesa SanPaolo Bank Albania has financed the construction of three HPPs (Lura 1, 2, 3) in the protected area of Zall-Gjoçaj National Park, an area that was nominated as an Emerald Site by the European Council in November 2018. Emerald Sites are protected areas for the conservation of European wildlife and natural habitats.
Raiffeisen Bank has funded the following four HPPs: Topojan 2 – located in the natural park Korab-Koritnik, Peshku HPP – located in the protected landscape of the Mali me Gropa Bize-Martanesh area, Langarica HPP and Radovë HPP – located in the National Park of Bredhi i Hotovës-Dangëlli.
Societe Generale Bank, which was acquired by the Bulgarian OTP Group, has financed the construction of Ternovë HPP and Dardhë HPP in the Liqeni i Zi (Black Lake) natural monument in Martanesh and in Morava, also a candidate area nominated as an Emerald Site.
Five months ago, the Albanian government announced the suspension of hundreds of HPP concession contracts that have not been implemented, but the process has been ineffective and untransparent. The government has not yet made public which projects are suspended, and no hydropower plant in protected areas has been canceled.