The European Investment Bank Group Complaints Mechanism issued its conclusions report on complaints concerning the Nepal Power System Expansion project financed by the EIB.
The complaint submitted by a Nepalese Civil Society Organisation raised concerns on the alleged lack of adequate environmental and social (E&S) impacts analysis, consultation and Free Prior Informed Consent, as well as alleged failure to comply with procedures related to displacement and land acquisition of the people affected by the Marsyangdi Corridor Transmission Line project (Component 2 of the EIB financed project).
The EIB signed in 2015 an investment loan with the Federal Democratic Republic of Nepal for the Nepal Power System Expansion project. The project comprises priority investments in the power transmission grid, including seven new high voltage transmission lines and associated substations as well as expansion and upgrade of several existing substations. The project aims to contribute to meeting domestic electricity demand by connecting new hydroelectric schemes in the former Western Development region to the national grid and to facilitate cross-border power exchange with India.
The EIB Group` Complaints Mechanism concluded that some of the allegations concerning gaps in the implementation of the Bank’s E&S policies were partly substantiated, and made corresponding recommendations to rectify the shortcomings. The recommendations include updating and implementing a corrective environmental and social action plan, hiring experts in stakeholder engagement with specific expertise in indigenous people, monitoring continuously the project and providing technical guidance to the promoter on environmental and social matters in view of EIB’s requirements.
The EIB welcomes the Complaints Mechanism’s recommendations and is addressing them in cooperation with the promoter and all the other stakeholders involved, in line with the Bank’s policies and standards. The EIB services have developed a corrective environmental and social action plan as part of their ongoing monitoring of the project and an independent local expert has been deployed by the Bank to help the promoter implement the recommendations.
The EIB is committed to strengthening its monitoring of the project and to providing technical guidance on environmental and social requirements to the promoter, notably through workshops on its Guidance note for EIB Standard on Stakeholder Engagement in the EIB Operations. The Guidance note aims to support the promoter’s efforts to undertake meaningful stakeholder engagement with regards to environmental, climate and social risks and impacts, and the proposed measures and actions to address them.
In its capacity as an EU body, the EIB is directly bound by the EU Charter of Fundamental Rights. The Bank is committed to respecting human rights throughout its investments. Human rights principles are integrated into the EIB’s key due diligence procedures as dictated by the EIB’s Statement on Environmental and Social Principles and Standards and reflected in the Bank’s Environmental and Social Handbook (overview).
Moreover, the Bank fully acknowledges the important role that civil society can play in their promotion and protection. The Bank has taken the current revision of its Environmental and Social Framework as an opportunity to clarify and strengthen language regarding its human rights obligations.
The EIB will launch a public consultation to review its social and environmental policy and standards. The Bank is inviting all its stakeholders, including civil society groups, to join this important consultation and is looking forward to engaging with all.