Citizens' guides – CEE Bankwatch Network

1991 The European Bank for Reconstruction and Development (EBRD) is established by western nations to support the development of market economies in Central and Eastern Europe. The EBRD is the first international financial institution with a proactive environmental mandate. The Agreement states that EBRD should "promote in the full range of its activities environmentally sound and sustainable development."

1992 First Environmental Procedures, including provisions for public participation, are adopted.

1992 EBRD moves to Carrara marble building. Media notes that the EBRD is providing considerably less in loans and investments then it spent on fitting out its offices, paying salaries and other overheads.

1992 Energy Policy is approved by the EBRD Board. This policy aims to support energy efficiency on the one hand while on the other assisting with "priority nuclear projects". The EBRD is the only multilateral development bank that supports nuclear energy.

1993 Nuclear Safety Account (257 million ECU) was set up to stimulate early closure of the most dangerous nuclear reactors in Eastern Europe. By the time the funds run out in 2000, the NSA did not successfully close down any reactors except Chernobyl, which was closed as part of a larger deal. Meanwhile, the upgrades financed by NSA are used as arguments for life extensions of those nuclear units.

1993 ZSNP Project (Slovakia) is approved by the EBRD Board, with a USD110 million loan and USD15 million equity investment for a new aluminum smelter in Ziar nad Hronom, Slovakia. The EBRD identifies numerous environmental problems (high energy intensity, air pollution, heavy-metal pollution) so the project is screened as Category A. But because of financial pressures, the project is given "fast track" status, which meant that some environmental procedures, particularly those for the public participation, were curtailed.

1993 Mochovce Nuclear Power Plant (Slovakia) is considered by EBRD. The Slovak government approaches EBRD with a proposal by Electricite de France, Bayernwerke and PreussenElektra for completion of a nuclear power plan costing USD1.2 billion (EBRD share is USD300 million). From the beginning the public participation process was handled poorly and the Environmental Procedures are recognized as insufficient. Eventually project is withdrawn in 1995.

1994 First attempt to apply Espoo Convention in Eastern Europe is made by EBRD, for the Mochovce project. (The Espoo Convention on Transboundary Environmental Impact Assessment gives the public in other countries that are affected by a project similar participation rights as in the country where the project is taking place).

1995 Energy Efficiency Unit is set up by EBRD, the first Development Bank to do so. The Energy Efficiency Unit is warmly welcomed by civil society. Although the Unit increases energy saving investments in some CEE countries, it is blocked by internal political disputes from achieving its potential.

1995 Kumtor Gold Mine (Kyrgyzstan) is approved by EBRD Board for USD40 million. Also, EBRD provides USD30.1 million loan to the Kyrgyz Republic for the electricity grid serving the mine. According to the agreement Cameco (Canadian company), the mine does not yield revenues for Kyrgyzstan until the loans are substantially paid back. The mine is situated at a height of 4000 meters in the mountains, and substantial environmental risks are acknowledged.

1996 New Environmental Procedures are adopted by EBRD, because previous ones are shown not to be adequate in a number of controversial projects, especially Mochovce.

1997 Economic Assessment of K2/R4 Project (Ukraine) is done for completion of two nuclear power plants, Khmelnitsky 2 and Rivne 4. Because of the huge public controversy, the EBRD contracts an independent Panel of Experts to review the economics of the project. The Panel concludes that: "...K2/R4 are not economic. Completing these reactors would not represent the most productive use of 1�billion USD at this time." At the time of this conclusion, the cost of completion was expected to be USD1.2 billion.

1997 Sakhalin II (Russia) is approved by EBRD Board for USD116 million, an off-shore oil and gas extraction project, despite the fact that the marine environment near Sakhalin Island in the Russian Far East is one of high marine biodiversity, with endangered whale and dolphin species. Toxic drilling discharge is dumped directly into the marine environment rather than the industry best practice of re-injection into the geologic formation. Public participation is seriously limited both during project preparation and the construction. There is only limited public access to the Oil Spill Contingency Plan.

1998 Chirage Early Oil project (Azerbaijan) is approved by the EBRD and IFC, which give loans totalling USD400 million to the consortium of oil companies led by BP Amoco, for oil extraction in the Caspian Sea and oil pipelines from Azerbaijan to the Black Sea. One of the pipelines is to go through Chechnia, a fact that is conveniently omitted in the project documentation. The pressure from oil companies on the Azerbaijani government leads to increased limits on waste dumping in the Caspian Sea, which - as an inland body of water - is vulnerable to pollution from oil spills and chronic production discharges.

1998, Kumtor Gold Mine (Kyrgyzstan). In May a severe accident happens near the mine when a truck carrying 20 tons of cyanide compound falls from a bridge into a river. Nearly 2 tons of cyanide compound harm the drinking water and irrigation resources provided by the river, while notification of the population is not done in a timely manner. As a result of the toxic spill and the badly designed mitigation measures, several hundred people are hospitalised and some deaths are reported by local sources as well. The ecosystems of the river and Lake Issyl-Kul suffer from the toxic spill. The mine operating company paid only USD4 million in compensation for the damage.

1998 Collapse of Russia's financial system has large impact on the EBRD. EBRD ends the year with anet loss of ECU261 million. EBRD has done little during the past 8 years to create a transparent banking and securities system in Russia or to insist on other democratic governance steps.

2000 Public Consultation on an EBRD Sectorial Policy. For the first time EBRD to organize a public consultation one of its Sectorial Policies - on Energy. As a result of this, such consultations become a standard included in the revised Public Information Policy.

2000 K2/R4 Project (Ukraine) is approved by EBRD Board in December, agreeing to support completion of 2 nuclear reactors with a USD215 million loan (total cost of the project is estimated at USD1.5 billion). The EBRD decides to ignore the fact that the project has support of only 9 % of people in Ukraine and that it makes no sense either economically or environmentally. Being well aware of the social, environmental, economic and financial problems associated with the project, however, EBRD Directors attach unprecedented conditions that must be met by Ukraine prior to "final" approval and disbursement of funds.

2000 Frontera Project (Azerbaijan and Georgia) is approved in March by the EBRD Board for a USD10 million loan to be used for commercial exploitation of oil in Azerbaijan and Georgia. The project is approved without and Environmental Impact Assessment despite the fact that it aims to extract oil in a strict Nature Reserve area in Azerbaijan, established to protect the endangered Jayran deer. Later the EBRD approves another USD60 million loan for the full project. The public participation process for the second phase of the project is done pro forma and is condemned by civil society groups.

2000 Decommissioning Funds are created, after the failure of the Nuclear Safety Account to achieve closure of dangerous nuclear reactors in Eastern Europe. Civil society warmly welcomes the new approach, but criticizes the limitation on the Decommissioning Fund being used only for nuclear reactors in Lithuania, Bulgaria and Slovakia n leaving out Russia and Armenia.

2001 Kosicka Bridge Project (Slovakia), opposed by the public in Bratislava and prepared without a proper Environmental and Social Impact Assessment, is withdrawn from the Bank. Nevertheless the bridge is still being supported by the EIB.

2001 New Public Information Policy is adopted. However, only marginal changes are made, and the public in the countries of operation still does not have the right to receive consultation documents in the local language.

2001 K2/R4 Project (Ukraine) is withdrawn by the Ukrainian Government, which did not agree with conditions attached to the project.