EIB’s Draft Environmental, Climate and Social Guideline for
investments in Hydropower Development
Luxembourg, 11 June 2018
Introduction to the Stakeholder
Engagement Workshop
Monica Scatasta, Head of Environmental,
Climate and Social Policy, EIB
European Investment Bank Group 2
Objectives of Today’s Workshop
• Focus on the Guideline document
and listen to your feedback
To this end we will first:
• Outline the rationale and process
of development of the guidelines
• Discuss the criteria and objectives
• Highlight key new elements in
EIB’s approach to hydropower
• Listen to your feedback
European Investment Bank Group 3
The EIB: the EU bank
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‣ Shareholders: 28 EU Member States
‣ Natural financingpartner for the EU institutions since1958
‣ Around 90% of lending is within the EU
The EIB at a glance
• Largest multilateral lender and borrower :
We raise our funds on the international capital markets
We pass on favourable borrowing conditions to clients
• Some 450 projects each year in over 160 countries
• Headquartered in Luxembourg with 40 local offices
• Around 3,200 staff:
• Not only finance professionals, but also engineers, sector
economists and socio-environmental experts
• 60 years of experience in financing projects
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EIB’s lending to Hydropower
• Hydropower projects part of the
renewable energy portfolio
financed by the EIB, in line with the
Bank’s Energy Lending Criteria
• Co-financed 92 hydro project
operations since 2007
• Over € 8.9bln loans since 1984 to
197 projects in 60 countries
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322.5
3083
70
89
198.8
121.5
785.24
512.5
383.7
Lending volume 2007-17EUR 5.56 bn
Russia, E.Europe,Sth. Caucasus Member states
EFTA Potential candidate countries
Candidate countries Mediterranean countries
Latin America Asia (excl. Central Asia)
ACP States
The Guideline’s Rationale
• Hydropower is largest source of renewable power worldwide:
Significant benefits if implemented sustainably
But potentially major and complex negative impacts
• The Guideline sets out:
EIB’s clear position on:
Compliance with EU policies and alignment with their principles
Definition of EIB expectations regarding project promoters’ responsibilities
EIB’s ambition regarding hydropower sustainability, building on best
practice in the EU
A “toolkit” for EIB staff → quality and consistency of the analysis
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EIB’s project cycle
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EIBprojectcycle
Step 1 Proposal
Step 2 Appraisal
Step 3 Approval
Step 4Signature
Step 5Disbursement
Step 6 Monitoring
and
reporting
Step 7 Repayment
• Financial
• Economic
• Social
• Environmental• Technical
assessment
• EIB Management Committee
• Investment Committee(for operations potentially benefiting from EU guarantee under EFSI)
• EIB Board of Directors
Finance contract is signed
Conditions for disbursement are
checked
EIB’s E&S Framework
• EIB Statement on Environmental and
Social Principles and Standards
• EIB Environmental and Social
Standards
• Internal procedures for their
operationalization
• Set of sector/issue specific guidance
materia - “Environmental, Climate
and Social Guideline for investments
in Hydropower Development” is part
of this evolving set
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Structure workshop
• Session 1 : Guideline Rationale and Process (1h)
• Session 2 : Guideline content and specific aspects that are new in EIB’s approach (1.5h)
• Wrap up : “What we heard” and Next Steps (15m)
• Rules of engagement:
• Focus on the Guideline document
• State who you are
• Short statements/questions so all can participate
• Follow up in writing
European Investment Bank Group 10
Thank you!
Any Questions?
European Investment Bank Group 11
Development of the Guideline
Bartholomew Judd, Environmental
Specialist, EIB
European Investment Bank Group 12
Objectives of the Guideline
• Provide direction to Bank staff, project promoters, government agencies and civil society on EIB’s approach to appraising and monitoring future hydropower projects.
• Highlight areas of good practice and potential opportunities and risks related to hydropower projects.
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Approach of the Guideline
• Focus on Risks and Opportunities in hydropower with
the goal of identifying and disseminating best practice.
• Defines approaches for any type of Hydropower Project.
• Defines approaches for all EIB financial services,
including on-lending to financial intermediaries.
• Hydropower-specific requirements and
recommendations:
Within framework of EU legislation and EIB Standards .
How and when to comply versus alignment.
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Development of the Guideline
• Competitive tender
contract awarded to ERM
Q4 2016.
• Targeted consultation:
• Understand expectations
and opinions.
• Gather knowledge and
experience.
• Identify issues.
• Policy context.
• Stakeholder’s views on
implementation.
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Consultation – External Stakeholders included:
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• EC: DG ENV; DG DEVCO; DG CLIMA; DG ENER
• IFIs: World Bank; Inter-American Development Bank;
Asian Development Bank; European Bank for
Reconstruction and Development; AFD; KfW;
• Promoters: EDF; eleQtra;
• NGOs/Civil Society: The Nature Conservancy; WWF;
BankWatch
• Other: International Hydropower Association;
International Institute for Environment and Development;
Overall Benefits of the Guideline
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• Clear, concise statement of EIB’s commitment to renewable
energy, and development of sustainable hydropower - to set
expectation
• Emphasis on compliance with EU legislation and EIB
Standards
• Clearly defined requirements for project promoters that EIB
will consider when approaching future hydropower projects
• Description of how EIB will work with promoters and other
stakeholders during appraisal and monitoring of hydropower
investments
• Collection of best practices and key references on approaches
and methods, and discussion of how/when to apply
Thank you!
Any Questions?
European Investment Bank Group 18
Structure and Criteria of the
Guideline
Dr Eamonn BarrettProject Team Leader, ERM Ltd
European Investment Bank Group 19
Structure of the Guideline
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• Introduction, including:
Applicability.
Policy Environment.
• Technical Issues and
Impacts (see later slide).
• Monitoring Requirements.
• Key References.
Environmental Issues and Impacts
• Natural Habitat and Biodiversity Degradation and Loss.
• Downstream Hydrology and Limnology (including
Environmental Flows).
• Reservoir Water Quality and Sedimentation, including
Eutrophication.
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Social Issues and Impacts
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• Physical and Economic
Displacement and Loss
of Access.
• Cultural Heritage.
• Public Health, Safety and
Security.
• Ecosystem Services.
Climate Resilience and GHG Emissions
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• Factoring Climate
Change into Hydrological
Assessment.
• Assessing Potential
Physical Risks.
• Calculation of Reservoir
GHG Emissions.
Strategic and Basin-wide Issues
• Cumulative Basin-Level
Impacts.
• Potential Transboundary
Impacts.
• Strong Governance and
Community Support.
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Reservoir and Dam Safety
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• Risks Associated with
Infrastructure Failure.
• Risks Associated With
Dam Operation.
Monitoring Requirements
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• Regular reporting by the
promoter on performance
of the project’s ESMS.
• Reporting to regulatory
authorities.
• Reports on contractor
management.
• Stakeholder engagement
Layout of the Guideline
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• 78 requirements & recommendations listed,
across 6 key topics.
Thank you!
Any Questions?
European Investment Bank Group 28
Stakeholder Engagement Workshop –
Key changes for the EIB
Olivier Tricca, Power Engineer, EIB
European Investment Bank Group 29
EIB engagement baseline
• Transparent and comprehensive Requirement /
Recommendation process for hydro projects
• No discrimination based on power plant or dam
size but on reservoir size and Degree of regulation.
• Priority to economic site restoration over existing
assets rehabilitation over new assets.
• Stricter rules of EIB engagement for FI operations.
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Project development stage
• Increased awareness of E&S
inputs integration at site
selection stage
• Increased support to WFD
principle application, strategic
and system-based studies,
outside EU
• Promote sustainable and
adaptive approach for water
assessment (climate change,
flood, environmental flow and
associated facilities)
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Project Implementation stage
• Higher participation from local community, women
and vulnerable people in monitoring and benefit
sharing mechanism
• Increase support for higher public governance
standards and independent committees review
• Strong and transparent monitoring system (flow,
gas emissions, sedimentation...)
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Thank you!
Any Questions?
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Next Steps
Bartholomew Judd, Environmental
Specialist, EIB
European Investment Bank Group 34
Next Steps
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• Collate comments from stakeholder engagement
process – July 2018.
• Review and update final draft based on stakeholder
comments.
• Publish Final Guideline Q4 2018.
Thank you!
Any Questions?
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