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6 Aug 2022

Drying up: Investors respond to allegations faced by hydropower projects they fund in EECA

Business & Human Rights Resource Centre

In July 2022, the Business & Human Rights Resource Centre released Drying up: Tracking the environmental and human rights harms caused by hydropower in the Caucasus and Central Asia report, where the Resource Centre tracked publicly reported allegations of environmental and human rights abuses linked to hydropower plants (HPPs) in Armenia, Georgia, Tajikistan and Kyrgyzstan. The data in the report demonstrated that local communities are facing major risks amid increasing demand for hydropower. A considerable number of cases with impacts on livelihoods of communities are followed by another problem – the issue of access to water. There is an urgent need to address the harms in this sector if a just transition to renewable energy is to mitigate the worst effects of the climate crisis.

Investor Outreach

After the release of the report, the Business & Human Rights Resource Centre reached out to the investors involved in hydropower projects included in the report for their comment on environmental and human rights allegations and steps to remediate alleged harms.

Our letter to the investors, which can be found here, contained questions covering issues such as investors' involvement in project impact assessments, monitoring, consultation with various stakeholders and human rights risk mitigation. Only one of the investors, the European Investment Bank, replied to all of the questions. Moreover, the EIB confirmed that no funds have been disbursed, and no formal decision has been taken regarding a possible EIB appraisal of the Rogun HPP project in Tajikistan. This news had also been reported in the media at the time of publication of our briefing.

All other responses were general in nature. News of the EBRD's interest in Rogun HPP in Tajikistan was denied by the bank, while it said the Nenskra hydropower project in Georgia was in preparation stage and concerns associated with environmental and social impacts were being considered in full in order to meet the EBRD’s requirements. Asian Development Bank and Asian Infrastructure Investment Bank confirmed that they have not taken any final decision with regards to financing the Nenskra hydro project in Georgia. IFC and KfW confirmed that they are aware of some of the concerns raised in the report. KfW said it has therefore arranged additional measures to minimise the risk of negative impacts on the environment related to small hydropower plants in Armenia. IFC said that it has been working with its clients to comply with their Performance Standards.

Eurasian Development Bank and Korea Development Bank (KDB) did not respond to our outreach. Full responses of investors can be found below.

Company Responses

Asian Development Bank (ADB) View Response
European Investment Bank (EIB) View Response
International Finance Corporation View Response
European Bank for Reconstruction and Development (EBRD) View Response
Eurasian Development Bank

No Response

Korea Development Bank (KDB)

No Response

Asian Infrastructure Investment Bank, AIIB View Response