The World Bank’s International Finance Corporation (IFC) is the largest financier of hydropower projects in protected areas in Albania, according to a new study [1] launched by Riverwatch, Euronatur and CEE Bankwatch Network today.

The IFC supported 4 plants in Albania in protected areas with loans and advisory services worth EUR 139 million.   Additionally, the European Bank for Reconstruction and Development (EBRD) has financed 2 hydropower plants located in wildlife areas.

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Overall, the IFC has supported 16 and the EBRD 8 hydropower plants in Albania. This makes up more than 80% of the 30 projects either planned now or having entered operation since 2005 for which financing sources were identified in Albania by the study [2].

The research has revealed that not only do some of the EBRD and IFC-financed hydropower projects in Albania impact on biodiversity but they also reduce people’s access to water resources and degrade the water quality.  The works on IFC-supported Bistrica 3 small hydropower plant near Sarande have repeatedly been put on hold due to the environmental violations and pollution of local water. The EBRD-financed Ternove small hydropower project in Diber has depleted drinking water resources of the surrounding villages.  Both projects are strongly opposed by local people.

The research exposed that 75 projects have been directly supported with EUR 818 million by multilateral development banks [3] across southeast Europe. 30 of them are in protected areas. However, in addition the EBRD and the European Investment Bank (EIB) have provided EUR 36 million for 27 small hydropower plants through commercial banks. They have refused to identify the names of the projects, citing client confidentiality.

 Olsi Nika from EcoAlbania and an Albanian coordinator of the Blue Heart Campaign notes: “The fact that multilateral development banks have financed hydropower plants in protected areas in Albania shows that much more scrutiny is needed – by the banks themselves, the governments that control them and the Albanian state authorities”.

Of other public banks and financing mechanisms, Austrian and international public fund have also contributed to the development of the Lengarica hydropower project impacting the Albanian Vjosa, one of the Europe’s last remaining wild rivers. A further 38 new plants are planned in the Vjosa catchment , including 6 upstream on the Greek part of the river.

The companies backing the hydropower projects in Albania are mostly local companies, but of those involving foreign investment, Italy, Austria and Norway stand out. The United Arab Emirates-backed 127MW Shala cascade will partially affect the Theth National Park and its planned extension of the Albanian Alps National Park.

Ultimately, if the problems caused by hydropower plants are not prevented in Albania and the rest of the Southeast Europe, the whole renewable energy sector will face a backlash, so it’s in the EU’s interest to step up its oversight of this sector if it wants to promote renewable energy in its new member states and accession countries,” commented Klara Sikorova, Researcher at CEE Bankwatch Network.

“The good news is that the majority of the plants we identified are just plans for now, so they can still be stopped where necessary,” she added.

Contacts

Olsi Nika EcoAlbania/ Blue Heart Campaign

Mob. +355 69 29 44 757

Klara Sikorova

CEE Bankwatch Network

Tel. + (420) 274 822 150

 Notes for editors

[1] The study and accompanying database can be found at:  www.bankwatch.org.  It covers Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Vjosa/Aoos part of Greece, Kosovo, Macedonia, Montenegro, Serbia and Slovenia.

2] A total of 436 hydropower plants were identified as being planned now or having entered operation since 2005 in Albania turning the country into a regional leader in terms of the number of greenfield hydropower plants. Most of the plants are only in the planning stage so most likely do not have financing arranged yet, while others are financed by commercial bank loans which cannot usually be traced.

‘Financing sources’ include loans, guarantees, grants for project preparation/advisory services.

‘Plants’ refers to each separate hydropower facility, so one loan or guarantee may cover several plants but still be classed as a single ‘project’ by a financier.

 [3] The EBRD, European Investment Bank and the World Bank group institutions (International Financial Corporation, International Bank for Reconstruction and Development, International Development Agency and Multilateral Investment Guarantee Agency).