eib’s draft environmental, climate and social guideline ... · • focus on the guideline...

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


The EIB: the EU bank

4

‣ 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

5

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


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


EIB’s project cycle

8

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


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


Thank you!

Any Questions?


Development of the Guideline

Bartholomew Judd, Environmental

Specialist, EIB


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.


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.


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.


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

17

• 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?


Structure and Criteria of the

Guideline

Dr Eamonn BarrettProject Team Leader, ERM Ltd


Structure of the Guideline

20

• 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.


Social Issues and Impacts


• Physical and Economic

Displacement and Loss

of Access.

• Cultural Heritage.

• Public Health, Safety and

Security.

• Ecosystem Services.

Climate Resilience and GHG Emissions

23

• 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.


Reservoir and Dam Safety

25

• Risks Associated with

Infrastructure Failure.

• Risks Associated With

Dam Operation.

Monitoring Requirements

26

• 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

27

• 78 requirements & recommendations listed,

across 6 key topics.

Thank you!

Any Questions?


Stakeholder Engagement Workshop –

Key changes for the EIB

Olivier Tricca, Power Engineer, EIB


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.


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)


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...)


Thank you!

Any Questions?


Next Steps

Bartholomew Judd, Environmental

Specialist, EIB


Next Steps

35

• 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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