April 20, 2001 – CEE Bankwatch Network today publishes a report on the European Bank for Reconstruction and Development (EBRD). The report shows that, over the decade since the EBRD was set up, it has not only failed to fulfil its mission of promoting democracy and sustainable development, but has used tactics of misinformation, secrecy and denial of public involvement to advance its own agenda at the expense of the needs of Central and Eastern European (CEE) countries.

“The EBRD does not serve the interests of the people in our countries, but rather the interests of oil, nuclear and other lobby groups,” commented Petr Hlobil of CEE Bankwatch Network. “Projects such as the funding of two nuclear reactors in Ukraine also clearly show that the EBRD is incompetent as a bank, since the project is uneconomic.”

“Friends of the Earth is appalled at the EBRD’s missed opportunities in the CEE and CIS,” stated Jim Barnes, Counsellor to the Friends of the Earth International Network. “Instead of supporting the development of civil society and democratic institutions, EBRD has sided with transnational corporations. Its investment choices in the crucial energy and transport sector have largely ignored urban transport and energy conservation in CEE countries, for example.”

The report – “The EBRD: a Decade of Misinformation and Secrecy” – looks at five recent EBRD projects, showing that they have been forced on people who have not been given access to project information or the opportunity to comment and have their wishes taken into account. Weak national laws have been exploited so that public participation is minimized or ignored. EBRD continues to fail to provide key information in national languages and projects routinely have late and incomplete release of documentation. Often the EBRD underestimates the environmental and social impacts of its projects.

Case studies include the funding of two nuclear reactors in Ukraine (the project is known as K2/R4 – for which a $215 million loan was approved by the EBRD Board in December 2000). The Ukrainian authorities and EBRD have shown their disregard and contempt for public participation in environmental decision-making through actions ranging from the merely uncooperative to outright intimidation and coercion.

In the Frontera Project in Azerbaijan and Georgia, approval was given without any Environmental Impact Assessment despite the fact that it aims to extract oil in a strict Nature Reserve area in Azerbaijan, established to protect an endangered species of gazelle. The EBRD subsequently approved the second phase of the project with a total loan of $60 million. The public participation process for the second phase of the project has been condemned as inadequate by civil society groups.

Petr Hlobil, CEE Bankwatch Network or James Barnes, Friends of the Earth International (mobile +420-603-154 349), energy(at)bankwatch.org, www.bankwatch.org

Notes for Editors:
The EBRD was established in 1991 with the aim of assisting countries of Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS) with the transition to market-orientated economies. It is answerable to its shareholders, which include 58 countries, as well as the EU and the European Investment Bank. The EBRD provides loans, equity investments and guarantees for private and public sector projects in the areas of finance, infrastructure, industry and commerce in 28 countries in the CEE and CIS regions. The nature of financed projects varies greatly and ranges from nuclear power generation through to cheese manufacturing. The EBRD is now the largest foreign investor in these regions.
CEE Bankwatch Network is an association of citizens’ organisations from 11 countries of Central and Eastern Europe concerned with the activities of International Financial Institutions (IFIs) in the region. One of the main goals of the Network is to facilitate informed public dialogue on IFIs policies and projects.

Friends of the Earth is the world’s largest federation of environmental groups, uniting close to one million activists worldwide. FoEI’s member organizations in 68 countries and 13 affiliate groups campaign on the most urgent environmental and social issues of our day.