Serbia: Environment NGO CEKOR invites EBRD to write off EPS-Kolubara mines dept due to the floods

26. May 2014. / News Serbia Energy

Centre for Ecology and Sustainable Development CEKOR invites the European Bank for Reconstruction and Development to write off the debts of the Serbia Power Utility Company, who are invested in the machinery of the Mining basin Kolubara or if it is impossible because of EBRD politics or political opinion to redirect those funds to create a fund for resettlement of villages in destination of the Kolubara entire basin, namely resettlement of: Vreoci, Junkovac, Barosevac, Zeoke in the western region and Radljevo, Kalenic and other villages in the Kolubara region which will have to be displaced because of the newly created situation.

Besides this debt write-off should be accompanied by a revision of the draft Energy Strategy of the Republic of Serbia, which, as it is known, massively relies on the development of lignite fields in the Kolubara basin especially of field Tamnava West which during last years has produced about 10-12 million tons per year, and it was planned that his production grows by 15 million tons per year. Given this situation, but also given the need that Serbian energy sector should provide permanent, safe, environmentally, economically and socially sustainable energy supply that will be resilient to climatic challenges of floods, drought, hurricane storm, which will ensure the empowerment of local communities and will provide a reduction in emissions from electricity production, but at the same time provide significant reduction in energy poverty, a significant number of sustainable jobs directly and indirectly associated with the energy jobs sector, we believe that it is necessary to help with international partners to move towards the development of decentralized power sector, based at renewable resources (particularly biomass, geothermal energy, wind and solar, and natural gas as a transitional fuel).

Discharge of EPS debt could be a significant boost in this direction, and we propose it as such.

According insight into the budget of Republic of Serbia, and according the history of EBRD investment in several projects that have been funded since 2000th untill today it is clear that the EPS debt based on the project financing of mechanization in Tamnava West and in other mines in the Kolubara basin is approximately 50 MEUR. This equipment is located at the bottom of the open pit mine Tamnava West. The mine Tamnava West has become an artificial lake due to the flooding of the Kolubara River. According to the preliminary data, it is the second largest lake in Serbia immediately after Djerdap Lake, which is enough proof of disaster.
We believe that the EBRD should seek compensation from the insurance companies, not from the budget of the Republic of Serbia or to redirect funds for support of sustainable and transparent resettlement of villages in the surroundings of the Kolubara basin…
According to its final report, the EBRD closed last year with a record profit of over 800 MEUR. In recent years EBRD has written off 50MEUR of debt to the companies on various grounds. We think that the EBRD should seriously consider debt forgiveness for Serbia machinery submerged in Tamnava West. It is the right moment to show that the EBRD is not only profitable bank, but as the name suggests – Bank for Reconstruction and Development.
Already in an oral interview with EBRD President with whom we met during his visit to Belgrade on 21st May 2014, Cekor sought the debt to be released, and today it has officially requested from the EBRD headquarters in London to take this process forward.
Such assistance to Serbian energy sector would be a real message of support in this very difficult and almost unimaginable time. Serbia needs time to make the energy transition and in this way CEKOR wants to support with all its strength EPS, ministries and all citizens of Serbia.

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