Nenskra HPP

Complaint

In June 2018, the EIB-CM received a complaint from CEE Bankwatch Network with support of Green Alternative, collectively acting as representatives of project-affected people. The complaint is rooted in the claim that the Bank failed to identify the Svan ethnic group as an indigenous people under EIB Environmental and Social Standard 7, thus failing to afford the group protections provided for by the Bank’s environmental and social framework.
 

Findings and Outcomes
 

Application of EIB Standard 7 

The applicability of the proposed lenders’ indigenous peoples policy, as assessed in the 2017 Social Impact Assessment, was conducted pursuant to more restrictive EBRD and ADB Standards. The EIB-CM finds that no separate and documented assessment under EIB Standard 7, paragraph 12, was available. The EIB-CM notes that the Bank did not provide supporting evidence establishing that the EIB had in fact carried out its own social due diligence in this respect, accounting for gaps between that and other lenders’. The EIB-CM has therefore concluded that there is no evidence that the Bank took the adequate steps to assure itself of the proper application of Standard 7 to the project. It is recommended that the EIB reassess and document whether or not the Svans qualify as an indigenous people under Standard 7, also in line with the principles of good international practice, prior to stage two approval by the Management Committee.  
 

Assessment and Management of Labour Influx Risks and Impacts 

The EIB-CM considers that both the assessment of risks and impacts as well as the measures defined in the project Environmental and Social Management Plan to address such problems are insufficient at this time. In EIB-CM’s view, the proposed mitigation measures are primarily focused on labourers and lack safeguards to protect the host community from sexual abuses and to preserve cultural assets. The EIB-CM therefore considers it necessary to assess and manage risks associated with the influx of labour, including those associated with intangible cultural heritage, and to develop a more specialised instrument, such as a Labour Influx Management Plan.
 

Assessment of Alternatives 

The EIB-CM has obtained no documentation to verify whether the Bank adequately ensured application of Standard 1: Assessment and Management of Environmental and Social Impacts and Risks. Given the inability to review documentation or corroborate the complainants’ claims, the EIB-CM is unable to respond to this particular allegation. The EIB’s acceptance of a problematic alternatives analysis without sufficient documentation of the rationale for selecting the particular course of action proposed is troubling. The EIB-CM considers that the Bank should have drawn appropriate attention to the risks inherent in accepting a restricted assessment of alternatives not fully consistent with the applicable EIB requirements.

Monitoring

The EIB-CM monitored the implementation of corrective actions by the EIB between June 2020 and December 2025. The EIB-CM recommendations to the EIB included:

1. that the EIB reassess and document whether the Svans qualify as an indigenous people under the applicable EIB standard using a qualified and experienced social scientist with expertise in social and cultural groups and indigenous peoples' rights. This entails the need to address all ten criteria, including an overall assessment under the chapeau of Standard 7, paragraph 12. The vulnerability of the group would have a proper place in the overall assessment phase of the eligibility determination. This assessment should be consistent with the principles of good international practice. 
2. that a further layer of due diligence is required in assessing and managing the risks of adverse impacts associated with the influx of labour, including risks and impacts associated with intangible cultural heritage, and the need to develop a more specialised instrument, such as a Labour Influx Management Plan, as necessitated in Standard 9, paragraph 43. 

The implementation of the EIB-CMs recommendations have remained outstanding due to project delays, with no progress having taken place since 2021. According to the EIB, the project remains on hold until the implementation agreement and engineering, procurement and construction contractor selection process have been finalised.

The project was approved in 2018. Given its project finance structure, the project never received its final approval and no finance contract between the EIB and the promoter has been signed. As a result, only Stage 1 appraisal was completed. As reported by the EIB to the mechanism, the Bank’s involvement will be subject to full re-appraisal respecting the current EIB Group Environmental and Social Sustainability Framework.

Based on the above, the EIB-CM has closed the respective action points as obsolete.