EBRD urged to intervene over ‘damaging’ North Macedonia hydro project

Environmental campaigners have accused the EBRD of failing to monitor the building of a hydropower plant in a protected area in North Macedonia that has led to a river being almost run dry, endangering wildlife.

They called on the bank to intervene to force the developer to repair the damage or cancel the project, which they said breached the bank’s environmental rules.

The EBRD said the area was declared a protected area only after construction began and they were working closely with the developer and opponents to ensure the project met its environmental standards.

The row relates to the 270KW Krapska hydropower project funded by a €4.1m loan to Aktuel Energy Group under the EBRD’s direct finance framework that the bank uses to provide finance to private enterprises.

CEE Bankwatch, an NGO, said it had struggled to obtain details of environmental and social due diligence as well as an assessment of the aquatic biodiversity the bank had carried out.

It filed a complaint to the bank’s secretary-general Enzo Quattrociocche in February and was told “[t]he importance of good practices in construction have been reinforced to the client”. EBRD also said it would insist the project managers carried out air, soil and water monitoring.

“Our visit showed this was simply a smokescreen,” Davor Pehchevski, Bankwatch’s national campaigner, told GlobalMarkets. He said he had visited the site last month and found the developer had started a test-run taking almost all the water, leaving a dry road instead of the riverbed below the dam.

“The river bed has been completely destroyed. It was dug up and the water diverted and there were clear signs of erosion all along the access road so wildlife could not access the river, especially amphibians and the endangered species that live there. I could see the water quality was terrible.”

Igor Vejnovic, Bankwatch’s hydropower co-ordinator, called on the EBRD to ensure these types of projects followed the bank’s as well as national guidelines that were often weaker. “The project needs to be brought into line with EBRD policies or it should take some action against the client. They either have to make it compliant or somehow influence the clients to remove the dam.”