Environmental and Social Due Diligence
Wind Farms and the Environment
impact on birds and bats
Summary of EBRD/IFC E&S due diligence
requirements
Serbia May 2015
Robert Adamczyk
European Bank for Reconstruction &
Development
Environment and Sustainability Department
PUBLIC
Agenda

Why do environmental and social issues
matter to the EBRD and IFC

EBRD approach to environmental and social
due diligence

Summary and discussion
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Why do Environmental and Social
Issues Matter
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Environmental and social due
diligence


Environmental and (increasingly) social issues pose
substantial reputational and financial risk to Lenders
IFI’s do environmental and social due diligence on all
projects

Due diligence designed proportional to risk

Projects ultimately required to meet national standards
and IFI requirements and EU;
– Why EU standards – EU accession process, European Energy
Community, EBRD requirements…

Results of due diligence and E&S compliance
considered by Bank management and Board of
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Environmental and Social Policy
(2014)

E&S Policy applies to Bank
– Categorization of Project based on risk and EU EIA
requirements (Annex 1 projects)

10 Performance Requirements (PRs) apply to all
clients and projects

EBRD PRs have same titles and are broadly
equivalent to IFC Performance Standards

Also broadly equivalent to Equator Principles

Reference to EU environmental standards

Policy and PRs currently under review for updating in
2014
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Stakeholder engagement and
consultation

Always important

All projects are disclosed for meaningful
engagement, prior to Bank approval: A vs
B, public vs private

May require more than national EIA

Category A projects require participatory
engagement (meetings)

Engagement with local stakeholders
needed, including NGOs
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The risk is real
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EBRD approach to due diligence
for wind power project
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EBRD and IFC due diligence

Each project different

Assessment of cumulative issues and site sensitivity

Need to develop Stakeholder Engagement Plan
(SEP) and Non Technical Summary (NTS) to ensure
meaningful public consultation on all projects

IFI’s unlikely to finance projects that are in sensitive
bird areas (inclusive Natura 2000 etc).
– We will not finance projects where appropriate assessments
conclude there are significant unavoidable adverse impacts

Major projects: ESIA, SEP, NTS disclosed for at least
60 days (private sector, 120 public sector)
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Scope of Due Diligence

Adequacy of Bird and Bat
assessments

Cumulative impacts
– Eg. Via Pontica

Migratory bird issues

Breeding and wintering birds

Noise and Landscape issues

Public consultation
– Does it meet EU Standards?

Poor EIA could result in
annulment of building permit
and/or delays in due diligence.
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Bird Migratory issues
Some Projects
can be located in
key bird
migratory
corridors of
international
importance
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PR1: Appraisal (1)


All EBRD projects are subject to appraisal of potential
environmental and social impacts
A-Category projects undergo “special formalised and
participatory assessment processes”, generally a
“comprehensive environmental and/or social impact
assessment.”
– Greenfield and major expansions that can cause significant
adverse effects are Category A.

B-Category projects also undergo due diligence
process to identify and assess potential future
impacts.
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PR1: Appraisal (2)

Is it Category A or B?
– Some EU countries use number of turbines and/or
megawattage as thresholds
– Former rule of thumb was “A” for > 50MW. now threshold is
roughly 100MW (and under discussion)
– Transmission lines could trigger A category

EBRD has few hard and fast rules
– We can usually tell an “A” when we see it, or a “B”. Not
always.
– Direct effect on Natura 2000 triggers A-categorization
– Otherwise, decision generally based on consideration of
size, location, and associated facilities.
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Performance Requirement 6

Committed to Biodiversity Mitigation Hierarchy that
encompasses the precautionary principle

Guided by applicable international law and
conventions and relevant EU Directives
– Key EU Directives: EIA Directive, SEA Directive, Habitats
Directive, and Birds Directive
– EU Guidance: Wind energy developments and Natura 2000

Screening assessment (potential significant effects?) See next
slide, too

Appropriate assessment or equivalent

Compensation if needed
– In CEE, Poland has been developing guidance for wind
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PR6: EBRD due diligence (1)

Require independent assessment of risks to birds and
bats, regardless of proximity to Natura 2000 or other
known protected/sensitive areas

Require independent assessment of available data,
including previous monitoring and possible cumulative
impacts

When possible, consult with local affiliates of Birdlife
International

Along Via Pontica, EBRD provided funding for:
– Strategic Environmental Review of wind development in Bulgaria in
2010
– SER for coastal counties of Romania
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PR6: EBRD due diligence (2)

Pending completion of SER in Romania, all
large projects along Via Pontica are Category
A

Sponsored SER for renewables, including
wind, in Ukraine

similar SER in Kazakhstan

May consider SER for other countries,
including SEMED (Jordan, Egypt)
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PR6: EBRD challenges

EU guidance calls for four seasons of monitoring
data.
– Two issues:

Are data for 4 seasons sufficient to assess impacts and
significance?

Are all data needed before approval?
– Further monitoring and independent evaluation of results are
ALWAYS required, including several years of operation
(mirrors Poland guidance calling for 3 years post
construction)

Some countries of operation are EU members. Even
so, authorities may be less than rigorous in applying
EU Directives
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PR6: EBRD challenges (2)

Most countries of operation are not in EU:
– What areas are equivalent to Natura 2000 areas?
– What species are equivalent to those listed in Annex I?
– Who is the competent authority?

Ensuring coverage of all project and cumulative
impacts:
– Phased construction
– “Salami-slicing”
– Multiple regional developments
– Associated facilities (transmission lines, substations, control
center, roads), some of which may be developed by others
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PR6: Future challenges and opportunities

Consolidated monitoring data at regional,
national, international level
– Formats
– Quality assurance
– Who would sponsor and champion, and then
maintain system?

Regional multi-sponsor radar systems
– Who could or would be the champion?
– Difficult to implement and fund
PUBLIC
Summary and Conclusion
PUBLIC
Experience to date in Countries of
Operation

Projects developed in staged approach (i.e.. 240 MW wind farm broken
down in 20 MW section – Bank asked to finance 20 MW)
– EIA needs to assess full project including infrastructure.

Natura 2000 areas not well defined
– EU is commencing infringement action against Romania. This could affect
EU funding of wind power in New EU Member States (EIB, EU structural
funds etc)

Permitted projects developed by locals are being marketed to
international companies
– Poor EIA could affect the future value of the asset, and permits can be
withdraw or operators asked to reduce output.

Lack of cumulative assessments and ornithological studies
– Lack of these studies could annul the EIA and permit (European Court of
Justice)

NonTechnical Summary is a requirements of all IFI’s and the EU EIA
Directive
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Key issues

Bat monitoring: This is not usually done in all countries.
– Zoologists (in some countries the ministry requires Doctorate degree in
zoology) but they often don’t have the expertise in this field;

Lack of experienced ornithologists.
– In some countries there are only few ornithologists. This becomes a
bottleneck in some projects.

Assessment and survey methodology is not well defined.
– Method is mostly determined by the experts but our experience so far is that
the quality is quite low in bird assessments done locally. The assessment
reports are usually qualitative assessments, mostly short, without much
quantitative assessment.

Social Assessment, and inclusion of local populations
– Will the local community benefit- any local taxes to local community ?
– Is this a long term risk
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Way forward

Developers as part of Local Wind Association should develop dialogue
with stakeholders and develop best practice guidance
– BirdLife/Local Ornithological Society keen to assist
– Should also address bats
– Local inclusion and how to support local (often underdeveloped) communities

Strategic Environmental Assessment (SEA) is recommended for
sensitive areas eg. Dobrogea area of Romania
– Ultimate goal: local guidance on how and where to develop wind farms, and
on cumulative assessment

Developers need to be more aware of designated
protected areas, such as IBA’s, Natura 2000 etc

Developers should screen consultants carefully for expert ornithologists
and past success both in successful local permitting AND in satisfying
IFI due diligence requirements
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