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Company Response

11 May 2021

Updated response by Euler Hermes

As mentioned in our previous answer concerning this project, we have exclusively provided an isolated export credit guarantee (guarantee) for the bank (guarantee holder). Such guarantees protect the guarantee holder against payment defaults under the credit agreement. As neither Euler Hermes nor the German Federal Government have any direct contractual relationship with the owner and operator of the windfarm we only have an indirect influence on the project.

Nevertheless, we have carefully examined the allegations and concerns raised and have had several exchanges with the complainants, intensive discussions with the policyholder as well as interviews with representatives of the local authorities on site. Additionally, we have reviewed our own due diligence and the obligations of our guarantee holder in this context and reported the results to the German Ministry of Economic Affairs and Energy.

Before a guarantee is granted, projects have to be evaluated according to the strict and comprehensive requirements of the OECD “Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence”. Based on these requirements and the information available during our assessment the project was classified as a Category B project. Hence, no Environmental and Social Impact Assessment was required for our review and no environmental or social conditions were included in the credit agreement based on the guarantee. The guarantee holder enters into the financing based on the guarantee being rendered by the German Federal Government. Accordingly, a withdrawal of such a guarantee may only be considered if the guarantee holder is in breach of its obligations, e.g. by having provided false information in the application process - willingly or due to gross negligence.

According to our assessment, the guarantee holder carefully verified the information received from WP Çeşme by consulting with the exporter involved. Additionally, an external database (IBAT) was used to assess whether the project is located in or near a protected area. IBAT is a very reliable and state of the art database managed by NGOs, IUCN and a sub-organization of the United Nations. It includes the most comprehensive dataset on protected areas and areas of high biodiversity value worldwide. The information that WP Çeşme is located within a 1st- and 2nd-degree Natural Protected Area was neither available via IBAT nor provided by WP Çeşme during our review of the project. Hence, we classified the project as a Category B project. According to our assessment, the guarantee holder sufficiently fulfilled their duty of care when providing the required project information. Hence, we see no way to withdraw the guarantee.

Moreover, at the time of our assessment, WP Çeşme provided sufficient evidence that it had informed the public about the project, that the project fulfilled all local legal requirements, and that it had been granted the relevant local permits. The German Federal Government does not interfere in the decisions of local authorities regarding adherence to local standards or the legal consequences of any non-compliances. In case local authorities should halt the project, the German Federal Government will respect such decision and fulfil its obligations under the guarantee, e.g. in the event of a payment default it will reimburse the policyholder for the outstanding credit amounts. Also for this reason, we continue to monitor developments in connection with the complaints and the project.

Timeline