Billions of EU funds could be set for infrastructure projects in the Western Balkans that are not needed, are untransparent, and could lock the region into fossil fuels, particularly gas, for decades to come.
The alarm was raised by Bankwatch who analysed proposals for grants totalling up to EUR 29 billion from the Instrument for Pre-Accession and the Western Balkans Guarantee Facility, under the Commission’s 2020 Economic and Investment plan for the Western Balkans.
The plan lays out ten Flagship areas for investment covering renewable energy, transport, gas and electricity transmission, energy efficiency, digital, and youth. Governments have then submitted proposed 79 projects for financing under each category. Bankwatch noted that the project lists were not subject to any public consultation and have not been made public until now.
“The list contains many projects which appear reasonable and much-needed, but many others are not in line with EU policy and/or legislation and must not be funded with EU money,” the briefing states.
It continues that there is a significant imbalance between categories, with not a single government submitting any project in energy efficiency, despite pressing needs to save energy in the region. Other missing projects include reducing electricity distribution losses, boosting the heating sector, promoting efficient heat pumps and solar thermal and fourth-generation renewable district heating.
In February, the Commission approved the first investment package consisting of 21 projects worth EUR 3.2 billion. According to Bankwatch, the projects include Corridor Vc sections south of Mostar in Bosnia and Herzegovina, where war returnees face the threat of losing their land and destruction threatens the Buna and Bunica rivers.
Bankwatch made a series of recommendations to the Commission regarding the other projects waiting for funding approval. These include not funding ‘red flag’ projects identified by Bankwatch, increasing the transparency of project selection, and limiting the funding of roads.
In terms of energy, they categorically state ‘Stop using EU public money to finance gas in the Western Balkans”. Additionally, fossil fuel projects should not be accepted, renovation and efficiency should be promoted, and hydropower should be ditched in favour of solar, wind, and geothermal.
“In most of the Western Balkans, gas infrastructure would have to be built from the beginning, which would take years and massive amounts of money. This would lock in gas infrastructure at a time when the countries need to be investing in energy efficiency and renewables instead of building new fossil fuel infrastructure,” Bankwatch stated.
In terms of Albanian projects, Skavica got a red flag mention. They criticised that the government did not invest in any solar or wind and instead keeps relying on hydropower.
They noted that the Skavica dam was agreed on “seemingly without a tender procedure” with Bechtel.
“Bechtel has gained notoriety in the region for its involvement in a number of unsuccessful and/or overpriced projects, usually awarded without tender processes.35 This raises concerns both about the value for money for the project and the meaningfulness of the forthcoming environmental impact assessment,” they noted.
The analysis continues that if deals for Skavica were signed behind closed doors, the credibility of the environmental impact assessment should be called into question.
They also noted that local people have already been protesting against the dam as it will submerge 32 villages, displace over 12,000 people and threaten the habitat of the endangered Balkan Lynx.
“The Skavica hydropower plant has already had one round of EU assistance cancelled,38 so it is not clear why more funds are being requested,” the briefing states.
