Bankwatch

Spending without substance: Czech flagship industry programme fails to track climate impact

Dora Crnčević — Fri, 10 Jul 2026 12:54:42 +0200

With more than CZK 81 billion (EUR 3.3 billion) at its disposal, the Operational Programme Technologies and Applications for Competitiveness (OP TAC) is designed to help companies innovate, strengthen their technological capacity and reduce their energy intensity. In practice, however, the OP TAC’s evaluation framework remains heavily skewed towards monitoring the pace of spending rather than assessing whether the money is actually delivering meaningful results. Without rigorous, transparent monitoring of outcomes, it’s impossible to determine whether the billions in public funding are serving their intended purpose. Why OP TAC matters in the Czech context OP TAC is part of a broader ecosystem of national level programmes through which the Czech Republic channels EU cohesion policy funding. These operational programmes cover a wide range of areas, including the environment, transport, employment, research and regional development. The programme stands out not because its design is unique, but because it plays a central role in supporting the competitiveness and decarbonisation of Czech industry. It’s also one of the largest programmes in terms of budget and among the most significant for the country’s long-term energy transition. The Centre for Transport and Energy, a Czech-based Bankwatch member group, focuses closely on OP TAC because we have a direct seat at the table. Through our membership in the programme’s monitoring committee – the only seat reserved for civil society among its 42 members – we have gained a unique, first-hand insight into how the programme is being implemented, what information is being shared and where the gaps lie. This insider perspective allows us to monitor the programme’s functioning in a way that wouldn’t be possible in operational programmes where civil society has no representation. Chasing spending targets, ignoring real-world impact Throughout the work of the monitoring committee, the same issue resurfaces: the programme’s actual impact is impossible to assess. Discussions tend to revolve around financial absorption, the number of calls launched, the volume of applications submitted and the amount of funding approved. Meanwhile, outcome and performance indicators – the metrics that show whether the programme is achieving its goals – receive only marginal attention. This imbalance was once again evident at the committee’s most recent meeting in March 2026. Despite managing billions intended to support innovation, energy savings and circular economy measures, the programme’s real-world impacts remain largely secondary in the monitoring process. Yet the European Commission is clear: EU Member States must not only report on how quickly they spend EU funds, but also systematically monitor indicators and regularly assess the programme’s concrete results and achievements. Financial performance alone is not enough. Environmental indicators must not be sidelined Within the monitoring committee, the Centre for Transport and Energy has consistently argued that environmental indicators must be treated as a core part of programme evaluation. These include:

energy savings;

greenhouse gas emission reductions;

renewable energy deployment; and

circular economy outcomes.

We have repeatedly called for these indicators to be systematically included in the materials prepared for the committee, accompanied by short explanations of key trends and developments. So far, however, these proposals have been rejected, often on the grounds that there is ‘insufficient interest’ among committee members in receiving such information. This is particularly concerning given that the European Commission itself explicitly highlighted the need to strengthen the use of indicators within monitoring committees. The reluctance to integrate environmental data into regular reporting undermines the committee’s ability to fulfil its oversight role. Buried data, blind oversight What makes the situation even more problematic is that the data is already available. Internal documents prepared by the Ministry of Industry and Trade include indicators on energy savings, greenhouse gas emissions, renewable energy capacity and the volume of waste used as secondary raw material, along with corresponding targets and commitments. However, this information appears only occasionally, often as supplementary material and only upon request. It’s not integrated into the regular monitoring cycle, nor is it presented in a way that allows committee members to evaluate progress or identify shortcomings. For a programme of this scale and importance, such an approach is inadequate. Closing the accountability gap The operational programme manages more than CZK 81 billion intended to support innovation, energy efficiency and circular economy projects. Without systematic monitoring of indicators, it’s impossible to determine whether these funds are delivering the intended outcomes. The monitoring committee, whose role is to oversee the programme’s implementation, cannot act as a guarantor of accountable public spending if it lacks access to the data needed to evaluate performance. If the programme is to be evaluated credibly, it’s not enough to track how many billions have been allocated or disbursed. What matters is whether the programme is delivering tangible results and measurable impacts. This evidence based assessment should be one of the committee’s core responsibilities – one it has so far been unable to fully discharge. Strengthening the monitoring of indicators is not a bureaucratic exercise. It’s essential for ensuring that public money is spent effectively, that environmental goals are met and that the Czech Republic’s industrial transformation is grounded in real progress rather than optimistic assumptions. As long as indicators remain sidelined, the programme will continue to operate in an accountability vacuum, and the opportunity to steer the programme towards meaningful impact may be lost.

A new chapter for the EIB Group Complaints Mechanism?

Michaela Kozminova — Thu, 09 Jul 2026 12:51:23 +0200

For years, civil society organisations have warned that the current policy falls short of the UN Guiding Principles on Business and Human Rights and international best practice. The hard truth is that the mechanism has failed to deliver. It has simply been unable to achieve its mission independently, efficiently, or in a meaningful way for the very people it is supposed to protect. Yet people continue to turn to the EIB-CM to raise concerns about EIB-financed projects. According to the EIB-CM’s 2025 annual report, 21 admissible complaints were registered that year. Despite deploying approximately 90% of its financing within the EU, 88% of these complaints came from outside the EU. The vast majority of these complaints were submitted by individuals seeking redress for the negative impacts of projects on housing and land, living conditions and livelihoods (mostly related to resettlement), as well as inadequate stakeholder engagement. While we welcome the EIB’s recent consultative efforts and have actively taken part, consultation alone isn’t enough. Together with a coalition of partner organisations, we’ve put forward a number of recommendations to improve the mechanism. If the EIB Group wants to uphold its reputation for sustainability and accountability, it needs to turn these recommendations into reality.

When accountability fails

Our experience shows that numerous complaints from local communities and civil society organisations have not been adequately addressed, while the institutional response to EIB-CM findings has frequently been insufficient, resulting in ongoing harm to affected communities. One notable example is the expansion of Budapest’s Liszt Ferenc International Airport, which the EIB agreed to finance in 2018. The project aims to increase passenger traffic by 50% over eight years. Residents living near the airport, supported by Friends of the Earth Hungary (MTVSZ), filed a complaint alleging inadequate public consultation and raising concerns about the project’s environmental impacts, including its contribution to climate change, increased air and noise pollution, and wider social impacts on affected communities. In 2021, the EIB-CM concluded that the project failed to comply with both EU environmental legislation and the EIB’s own environmental and social standards, issuing a series of recommendations. Yet these recommendations have still not been fully implemented, despite the Bank being required to do so within 24 months of the conclusions report. Another example concerns the construction of the Corridor Vc motorway south of Mostar in Bosna and Herzegovina, financed jointly by the EIB and the European Bank for Reconstruction and Development (EBRD). In 2017, affected residents filed a complaint about the project’s environmental and social impacts. The EIB-CM initially concluded in 2019 that there were no instances of maladministration. The complainants subsequently submitted an updated complaint to the EIB-CM and, shortly after, with the EBRD’s Independent Project Accountability Mechanism (IPAM). In autumn 2021, the EIB-CM again found no shortcomings in the route selection process or public consultations. However, in early 2024, the IPAM reached the opposite conclusion, finding that the route selection process had not complied with the EBRD’s Environmental and Social Policy. It recommended a new alternative alignment analysis along with a proper environmental and social impact assessment. Regrettably, many of the underlying issues, including the flawed route selection, remain unresolved. As a result, several new complaints have already been submitted to the IPAM in 2026.

Promising reforms

The draft Complaints Mechanism Policy contains several welcome improvements and addresses some long-standing expectations regarding the EIB-CM’s independence. In particular, we welcome the explicit recognition that the EIB-CM has a mandate to ‘facilitate access to remedy to address the negative environmental and/or social impacts of EIBG Projects’. However, the review should go much further. The revised policy must strengthen the EIB-CM’s independence from the Bank’s operational services, increase its capacity to facilitate effective remedy, and improve transparency and predictability.

Closing the gaps

First, although the draft policy designates the Head of the EIB-CM as the guarantor of the EIB-CM’s independence, it contains no meaningful safeguards governing how the Head or staff are appointed, assessed or protected from conflicts of interest. In this context, introducing clear rules on recruitment, post-employment restrictions, and conflicts of interest would align the EIB Group with international good practice and the policy provisions of peer accountability mechanisms at other multilateral development banks. Second, the EIB-CM’s standing within the EIB’s unique governance structure should be strengthened. The draft policy should clearly define the responsibilities of both the Management Committee and the Board of Directors in ensuring that the EIB Group fulfils its remedy mandate. The Board approves loans under the condition that they comply, or will comply before signature, with the EIB Group’s Environmental and Social Policy. Yet, despite serving as the institution’s ultimate decision-making body and legally accountable for the projects it approves, the Board currently has no role in authorising development of corrective actions where the EIB-CM finds non-compliance and management disagrees to develop corrective actions. The policy should therefore allow the EIB-CM to refer such cases to the Board for a final decision. Third, complainants should be consulted much earlier in the process and not be omitted from discussions between the EIB and its clients when corrective actions are being developed. The views of complainants are central to designing measures that reflect realities on the ground and effectively address verified harm. Transparency should also be a guiding principle throughout the process. Complainants should receive the final compliance conclusions report before corrective measures are developed, enabling them to prepare and engage in consultations. Finally, the EIB-CM’s institutional learning function should not be overlooked. One of its most important roles is to translate case-specific findings and dispute resolution experience into lessons that improve the EIB’s policies, project due diligence, and lending conditions. In line with the EIB Group Evaluation Policy, the Board of Directors should be required to consider the EIB-CM’s reports systematically, use their findings to inform decision-making, and hold the EIB Group accountable for implementing the recommendations.

Building renovation in Latvia will cost EUR 32 billion: Impossible target or unavoidable necessity?

Dora Crnčević — Mon, 29 Jun 2026 14:47:42 +0200

The national building renovation plans must outline how the requirements set out in the revised Energy Performance of Buildings Directive, adopted in 2024, will be achieved. But progress has been slow. So far, only 15 Member States have submitted their plans, with infringement procedures initiated against the remaining countries, including Latvia. The first draft of Latvia’s national building renovation plan has been shared with stakeholders and is expected to be submitted to the Commission shortly. The plan outlines a trajectory for renovating residential and non-residential buildings in order to fully decarbonise the building sector and contribute to achieving climate neutrality by 2050. Although the plan is still in its initial, semi-completed stage, it lays out a potential scenario for the number of buildings that will need to be renovated each year until 2050. It also estimates the amount of public and private funding required to achieve this objective. Massive investment at stake The estimated investment required to meet the renovation targets for Latvia’s building stock by 2050 stands at a staggering EUR 32.33 billion. This is an enormous sum for a country whose annual GDP is approximately EUR 43 billion – a figure set to rise even further when taking inflation into account. To date, only around 4% of apartment buildings in Latvia have been renovated, despite at least 26,600 buildings requiring renovation. At this current pace, it would take around 150 years to fully decarbonise Latvia’s building stock. The goals set at the EU level are clearly ambitious. This is true not just in monetary terms, but also logistically. According to Latvia’s draft plan, a severe shortage of construction labour is expected as the country attempts to renovate 98,000 residential buildings and 39,000 non-residential buildings within the remaining 24 years. Unsurprisingly, discussions are taking place regarding the utility of creating a plan with such targets when it remains completely unclear how they can actually be achieved. Mobilising on all fronts Given the existential nature of the climate crisis, Latvia’s building renovation plan must align with the 2050 climate-neutrality goal. However, achieving this requires a massive mobilisation of collective effort. While many procedural improvements can be made at the national level to speed up delivery, a dedicated EU-level financing programme for building renovation is also vital. Such a programme should pool funds from various sources – including joint loans and revenues from polluting activities – given the extreme difficulty of mobilising such vast sums through the national budget alone. A short-sighted response to the implementation of these seemingly unrealistic goals would be to argue for lower EU renovation targets. Building renovation serves a range of critical purposes beyond reducing greenhouse gas emissions. It extends the technical viability of buildings, improves the safety of residents, reduces dependence on imported fossil fuels, strengthens local economies and lowers vulnerability to global energy shocks. Renovation is also essential for adapting buildings to increasingly frequent extreme weather conditions linked to climate change, including heatwaves and severe storms. Crucially, renovating the extensive building stock built in Latvia during the Soviet era – where economically justifiable – is a massive ask, regardless of the 2050 climate-neutrality goal. Multi-apartment residential buildings constructed during the Soviet occupation account for 72.2% of the total floor area for this type of housing. Some of these buildings have already reached the end of their service life. Without renovation, a housing crisis is inevitable. Redefining the economic picture Building renovation planning should also be considered in the broader context of reliance on imported fossil fuels. Policymakers must account for both the costs of this dependence and the economic benefits of reducing these imports. In 2025, the EU spent approximately EUR 396 billion on fossil fuel imports, equivalent to around EUR 880 per capita. By comparison, the European Commission estimates that the transition to a clean energy system will require EUR 660 billion in public and private funding annually by 2030. Evidently, the bulk of the investment required to shift to clean energy by 2030 will be close to the amount currently spent each year on imported fossil fuels. Unlike spending on imports, however, energy efficiency and renewable energy technologies represent a permanent investment in the local economy. According to the International Energy Agency, the EU saved EUR 51.4 billion in 2025 alone simply by reducing fossil fuel imports. These indirect benefits should be estimated and projected in monetary terms at a national level to understand the true, long-term economic picture and prioritise building renovation accordingly. A shift in public sentiment To add some positive news, the historically sceptical public attitude to apartment building renovations in Latvia is changing course, as demonstrated by the overwhelming demand for support under a recent EU-funded programme launched by the Ministry of Economics. Following the scheme’s launch in April 2025, the entire available budget of EUR 173 million was reserved within a record six weeks, with the rapid uptake partly driven by simplified administrative procedures. The programme received 413 applications, of which 387 remain active. However, the existing budget is only enough to cover roughly 100 projects. To fund all the eligible renovation projects, including those currently on the reserve list, an additional EUR 290 million is urgently needed. To this end, the Ministry is now scrambling to secure extra funds, exploring options such as reducing the intensity of financial support to extend assistance to a larger number of buildings, and a potential EUR 100 million international financing loan, which would allow state agency Altum to provide financing. Given these frantic efforts, however, and the overall lack of coordination at government level, building renovation clearly has yet to receive the urgent political attention and prioritisation it so desperately requires.

The Trump peace pipelines framework: a renewed threat to Western Balkan decarbonisation

Magda Wiejak — Fri, 19 Jun 2026 17:01:26 +0200

Most Western Balkan countries are known for their heavy coal use and slow decarbonisation, but the region has at least one advantage compared to its EU neighbours: low or no gas dependence. In 2024, fossil gas still made up 20.6% of the EU’s gross available energy. But in the Western Balkans, most gas-dependent countries are Serbia (14.3%) and North Macedonia (11.6%). In Bosnia and Herzegovina (BiH), gas makes up less than 3% of energy, with Albania, Montenegro and Kosovo not connected to international gas infrastructure. This is a strength to capitalise on, not a disadvantage to be remedied. The United States has for years lobbied southeast European governments to build new import infrastructure like the Greece to North Macedonia interconnector, LNG terminals in Montenegro and Albania and the southern gas interconnection between Croatia and BiH. And for a long time, EU policy encouraged them, promoting gasification even in the gas-free countries. But as the EU gradually moves away from promoting gas, US policy has doubled down on it. Fossil gas projects are no longer eligible for priority status under the Energy Community Treaty or for EU funding in the region, but overt US pressure on the Western Balkan governments to build new gas pipelines has ramped up during Trump’s second mandate. At the Three Seas Initiative Summit in Dubrovnik in April, all eyes were on the inter-governmental agreement between BiH and Croatia on the southern gas interconnection, which hit the headlines due to the appointment of a Trump-linked company, AAFS, as project promoter. AAFS was only founded in 2025, its ownership structure is not public, it has no track record and is represented by lawyers who campaigned on Trump’s behalf to overturn the 2020 U.S. election results. A special law appointing AAFS was passed in record time by the Federation of BiH Parliament in April 2026, bypassing the mandatory tender and concession-granting procedures, and allowing AAFS to use public land without paying expropriation fees. At the Dubrovnik summit, the U.S. government also announced a vaguely-defined ‘Trump peace pipelines framework’, which aims to ‘advance strategic energy infrastructure projects across Central and Eastern Europe, expanding the region's capacity to import U.S. LNG’. The U.S. has also initiated a series of agreements with Western Balkan governments, and the government’s May 2025 Report to Congress on United States Policy to Promote Regional Stability and Prosperity in the Western Balkans clearly prioritises gas infrastructure and sales.

New import infrastructure could triple the countries’ consumption – or become stranded assets

The fact that Europe is in its second oil and gas crisis this decade seems to have escaped the region’s governments, who are actively planning gas pipelines, power plants and LNG terminals that could collectively triple their 2023 gas consumption. These would either entrap the countries in costly dependence on US LNG imports, or end up as stranded assets. Albania relies on hydropower and solar for its electricity, as the two floating oil-fired units moored at Vlora since 2022 barely generate any power. The Trans Adriatic Pipeline passes through the country to Italy, but so far no exit point has been built on Albanian territory. Yet Albania plans to transition towards fossil fuels. It is planning at least two gas power plants – at Roskovec and Vlora – an LNG terminal, and a distribution system in Korca. Works started earlier this year at Roskovec despite permitting irregularities and a lack of financing. And in April, Albania signed a 20-year framework agreement to buy US LNG – worth no less than USD 6 billion – and a memorandum to develop the Vlora plant. Bosnia and Herzegovina mainly uses gas to heat Sarajevo, but in the last two years the Federation entity’s ambitions have grown. Its government is mainly concentrating on the southern gas interconnection, but has also revived plans for two more pipelines from Croatia, added 85 kilometres to the southern gas interconnection plans, and started planning three gas power plants. The Republika Srpska entity has made no secret of its plans to keep using Russian gas and building a new pipeline from Serbia. But it has recently signed an agreement for a pipeline within Republika Srpska, from Šepak to Novi Grad, that would connect to the old existing import pipeline. Kosovo is the only country in the region whose energy strategy rightly rules out building a gas pipeline. But even there, the government has left open the option of teaming up with a neighbouring country to build a gas power plant. Montenegro’s national spatial plan, after massive controversy around plans for a U.S.-backed LNG terminal at Bar, does not include the terminal or associated power plant. But after its adoption, in September 2025, the Prime Minister signed a memorandum with Japan’s JERA for a feasibility study for an LNG terminal and power plants. A planned US-Montenegro agreement has already met with strong resistance from civil society and people living near the planned LNG terminal. North Macedonia announced the start of works on the gas interconnector from Greece last year, although expropriation is not yet completed and several legal issues are outstanding. It also plans to build at least two more gas power plants, and in 2025 signed a memorandum with Turkiye’s Kazancı Holding to build unspecified gas plants and distribution grids. In April 2026, the government signed a memorandum with the U.S. for ‘improving the security’ of the gas supply, and in June, a grant agreement was signed with the World Bank to support the preparation of project documentation for the planned gas power plant at Bitola. Serbia’s difficulty in securing its gas supply has not put its government off steadily expanding the country’s gas network, and signing an agreement with Azerbaijan for a 500 megawatt gas power plant in Niš. It also plans a new plant in Novi Sad. The World Bank is also considering financing for a gas project that includes new pipelines within Serbia. In addition to long-term infrastructure lock-in and the climate impacts of gas, these plans don’t make economic sense. None of them have up-to-date, public feasibility studies, and they would end up either as stranded assets or heavily subsidised by taxpayers. Permitting, expropriation and construction could easily take a decade and the infrastructure alone would cost billions, even before the costs of gas are included. Even if some of the planned projects do not go ahead, the region does not have money, human capacity or time to waste on such costly distractions.

Will the U.S. put its money where its mouth is?

Previous U.S. efforts to push gas in southeast Europe were limited by its lack of willingness to pay for infrastructure construction. However, with the EU halting such funding, it remains to be seen whether the U.S. will use domestic sources like the Development Finance Corporation, or multilateral banks where it has strong influence, to finance gas build-out. The recent announcements of potential World Bank financing for two gas projects do not bode well, and suggest that the latter may already be happening.

The way forward

The Western Balkan countries can still avoid high levels of gas dependence if we act now. Appropriately-sited solar and wind generation, supported by existing hydropower, strong grid connections and battery storage, is much more cost-effective for electricity generation, while heat pumps, geothermal, and ambient or leftover heat avoid import dependence for heating and cooling. Instead of falling into the decades-old trap of gas dependence, Western Balkan governments finally need to increase energy efficiency and focus on electrification of the heat and transport sectors.

When citizens speak: Lessons on energy poverty from the Romanian town of Petroșani

Dora Crnčević — Wed, 03 Jun 2026 13:13:58 +0200

Last year, 28 residents of Petroșani came together to discuss something most of them experience every day but rarely raise in public: the struggle to keep their homes warm. The result was a citizens’ forum that cut through statistics and policy language to reveal something far more important: the lived reality behind energy poverty and what meaningful support could look like when shaped by those directly affected. The situation on the ground Petroșani illustrates what can happen when a regional economy built entirely around a single industry collapses. Following the insolvency of the town’s local energy conglomerate, mines began to shut down, jobs disappeared and many residents moved away. Those who stayed are now living in buildings constructed between the 1950s and 1970s, with crumbling roofs, draughty windows and heating systems that were never designed to be efficient or affordable. Energy poverty here is not an abstract policy concept. It’s a daily negotiation over which essential needs can be sacrificed. One participant described living on the top floor of a building where the ceiling freezes in winter and rainwater leaks into the apartment during heavy downpours. The home is damp and cold, the windows have never been replaced, and heating is only available when there’s enough money to buy firewood. Unfortunately, these are not isolated cases – they’re the norm. The many layers of energy poverty What made the forum particularly valuable was not just what participants shared, but how their experiences reflect the broader reality of energy poverty. It’s not simply about high energy costs; rather, it’s the result of multiple factors stacking on top of one another: low incomes, ageing buildings with poor insulation, limited job opportunities, and an administrative system that’s often difficult to navigate and slow to respond. In many households, a significant share of income goes directly towards utility bills. While heating assistance schemes exist, participants described them as either insufficient to meet their actual needs or difficult to access in practice due to bureaucratic hurdles and outdated eligibility criteria. The frustration expressed was not only about material hardship, but also about the gap between people’s needs and the institutions meant to respond to them. Barriers to collective action A key issue raised during the forum, and one well known in policy discussions, is the role of homeowners’ associations. These are a prerequisite for accessing most public funding for building renovations or energy-efficiency programmes. In Petroșani, however, very few apartment blocks have functioning associations. Participants’ experiences confirmed how complex and burdensome the process of establishing one can be, requiring time, financial resources, legal knowledge, and agreement from all residents, including those who have already left town. One resident explained that, without an association, neighbours must go door to door whenever anything needs to be done in the building, and that setting up an association took an entire year. Depopulation further complicates the situation, as vacant apartments make collective decision-making difficult, while the costs and responsibilities fall on those who remain. These barriers are not new, but the experiences of these residents make it clear how administrative requirements can become real obstacles in practice. What people actually want Despite the challenges, participants were constructive and forward-looking. They expressed strong support for solutions such as solar panels, thermal renovation and other green technologies. There was a general openness to change and a clear understanding of its benefits. At the same time, participants highlighted the need for stronger and more accessible connections with public institutions to make these solutions achievable. Their proposals were practical: a single point of contact for energy and housing matters, support in setting up and managing homeowners’ associations, neighbourhood-level renovation programmes instead of piecemeal interventions, and better public information delivered not only online but also in person for those less digitally connected. Many participants viewed renewable energy as part of the solution, arguing that solar panels could reduce both pollution and household energy costs. What clearly emerged from the discussions is that citizens are not simply passive beneficiaries of policy; they’re ready to engage if given the tools and support to do so. Lessons for Romania’s energy transition While the challenges in Petroșani are shaped by its post-industrial history, energy poverty is not limited to such communities. Across Romania, households are struggling with a similar combination of low incomes, inefficient buildings and limited access to support mechanisms. This makes energy poverty not just a local issue, but a systemic one. Addressing it requires more than financial support alone: it calls for policies that are accessible, coordinated, and grounded in peoples’ lived realities. As the experience in Petroșani shows, solutions already exist. Yet their impact depends on whether institutions can truly reach the people they’re supposed to support. Strengthening this connection will be critical, not just for addressing energy poverty, but also for shaping a transition that is fair and inclusive across Romania.

Slovakia’s billion-euro opportunity: Redirecting climate revenues and fossil-fuel subsidies to tackle energy poverty

Magda Wiejak — Wed, 20 May 2026 11:55:01 +0200

Amid this geopolitical turmoil, we at Friends of the Earth-CEPA (CEPA) have been assessing Slovakia’s potential to support long-term solutions to energy poverty through EU funding mechanisms. Our analysis reveals a staggering EUR 986 million that could be mobilised annually to finance energy poverty solutions in Slovakia.

A lifeline for vulnerable households left on the table

To reach this total, Slovakia must first address the chronic underutilisation of its existing resources. The Environmental Fund derives its revenues primarily from the EU Emissions Trading System (ETS), as well as from other environmental fees. However, its annual reports indicate a consistently low rate of expenditure, averaging only 37% annually between 2012 and 2024. In theory, this means that Slovakia should have more than EUR 2.539 billion available through the Environmental Fund to finance environmental measures, such as energy efficiency improvements for low-income households. Yet questions remain regarding the practical use of these resources. Historically, the Ministry of Finance has prioritised fiscal objectives over the climate goals of the Ministry of Environment, which has typically received insufficient support. This reflects the tendency of Slovak governments to favour the economic benefits of retaining funds in bank accounts to strengthen the country’s lending position, rather than directing them towards environmental spending.

The cost of inaction

The impact of this strategy is clear from the most recent data. In 2024, Environmental Fund revenues reached EUR 489 million, while expenditures amounted to only EUR 332 million – meaning just 68% of the available allocation was spent. Slovakia should be using 100% of these annual revenues to meet its clean energy transition needs, rather than to improve its fiscal or lending position on international financial markets. In 2024 alone, this would have made an additional EUR 156 million available for environmental spending. Looking at the broader trend, the average annual unspent amount between 2012 and 2024 was EUR 195 million – resources that could have been channelled directly into social climate solutions.

The Modernisation Fund’s untapped potential

Our calculations reveal a EUR 1.14 billion investment gap in the Modernisation Fund. Based on publicly available data, this represents a major surplus that remains unspent or unallocated compared to projected revenues. This gap is driven by different assumptions in ETS price projections over time, as well as the relatively slow pace of the Fund’s implementation – with less than one-third spenthalfway through the 2020–2030 period. The figure also represents almost 89% of Slovakia’s agreed EU contribution to the Social Climate Fund between 2028 and 2032. There is already a positive precedent. The Ministry of the Environment has approved the allocation of EUR 186 million from the Modernisation Fund to the Renovate House programme, which is the first shortlisted measure under Slovakia’s social climate plan. More energy poverty and transport poverty solutions should follow. At the same time, the Ministry of the Environment is preparing funding allocations for other areas, although these remain unclear despite our efforts to obtain further details through information requests. As a result, the final available amount could be lower. It should also be noted that the social climate plan has yet to be published. However, a study prepared by technical assistance experts has already shortlisted several measures for potential support under the Social Climate Fund.

From fossil fuel subsidies to energy efficiency and renewable support

The national energy and climate plan lists dozens of subsidies in the energy sector, including support for fossil fuels. Most of these have no defined end date. They include highly problematic exemptions from excise duty for heat production from coal, combined heat and power (CHP), and fossil gas. Other fossil fuel subsidies include support for CHP within the system operation tariff, as well as regulated prices for gas supplied to households. In its December 2024 review of expenditure and revenue in the energy sector, the Value for Money Division at the Ministry of Finance identified significant potential for savings in the energy sector, estimated to range between EUR 155.1 and 223.5 million per year. From a climate perspective, the most important measures include phasing out direct and indirect fossil fuel subsidies and aligning environmental taxes more closely with EU averages. Additionally, the current government’s approach of placing price caps on gas, electricity and district heating – costed at EUR 385 million for 2026 – contradicts EU energy and climate policy, State aid rules, and initiatives such as the Affordable Energy Action Plan and the 8th Environment Action Programme. Several aspects of this approach are problematic:

The price-cap scheme ‘targets’ around 90% of Slovak households, reflecting weak prioritisation of support.
Under the broader definition of energy poverty proposed by the Institute for Forecasting of the Slovak Academy of Sciences, around 18% of households (330,000) are energy-poor, including those without access to electricity, making them ineligible to avail of the scheme.
It undermines the ‘energy efficiency first’ principle, as it removes incentives to invest in building renovations or replace gas boilers.
It fails to prioritise the most vulnerable households, including those relying on solid fuels such as biomass.
Households are given no incentive to transition away from coal and waste-based heating to more sustainable or legally compliant solutions, despite the availability of support programmes such as Green Solidarity.

Finally, the response to the 2022–2023 energy crisis showed that windfall taxation of excess profits in the fossil fuel sector can provide an additional source of funding to absorb geopolitical shocks and protect vulnerable households.

Increasing household resilience

Rather than subsidising fossil fuel consumption, these resources could be redirected towards long-term investments in household energy resilience, including:

EUR 195 million annually through full utilisation of the Environmental Fund;

EUR 228 million annually through full utilisation of the Modernisation Fund, assuming stable ETS prices;

EUR 178 million through the abolition of indirect fossil-fuel subsidies and implementation of other recommendations from the Value for Money Division;

EUR 385 million through the removal of fossil-fuel, electricity, and district-heating price caps; and

additional income from a properly calibrated windfall tax.

Collectively, this totals an enormous EUR 986 million annually, in addition to potentially hundreds of millions from windfall taxation. This is almost four times more (386%) than Slovakia’s annual allocation under the Social Climate Fund between 2028 and 2032. In principle, ETS revenues – combined with the measures listed above – could significantly strengthen support for households, provided the Slovak government reconsiders its current ETS position. These massive annual revenues could be used to finance long-term energy efficiency and renewable energy solutions for 141,280 households. For example:

Up to 61,280 households could receive EUR 10 000 each under the Renovate House programme to replace windows and doors, and insulate roofs or ceilings;

A further 40,000 households could receive a EUR 4 380 subsidy for heat pumps through the Green to Households programme, reduce long-term heating costs;

Around 20,000 vulnerable households could receive a EUR 3 600 subsidy for solar thermal collectors under the Green Solidarity programme, cutting their hot water expenses;

And finally, 20,000 energy-poor households could receive a EUR 6 300 subsidy for rooftop solar photovoltaic systems under Green Solidarity, reducing their electricity bills.

The above examples illustrate the scale of support that could be mobilised for households if Slovakia pursued a more ambitious and socially targeted climate and energy policy. A comprehensiveenergy poverty strategy would also need to include measures related to sustainable and affordable housing, alongside other structural social and energy reforms.

The EBRD’s new gender strategy risks falling short at a critical moment

Michaela Kozminova — Tue, 12 May 2026 08:12:25 +0200

Today, only 4% of women live in countries close to achieving full legal equality. No economy provides equal economic opportunities, and nearly a quarter of countries have experienced a backlash against gender equality. These are not just trends, but early warning signs. They lead to shrinking civic space, weakened democratic institutions, poor economic governance, and an increasing risk to those the EBRD aims to support. Unless the EBRD explicitly recognises and addresses these dynamics, it risks investing in environments where its own objectives are undermined. The draft Strategy rightly acknowledges that women and other underserved groups continue to face structural barriers when it comes to accessing jobs, finance, infrastructure and public services. More and more countries are introducing laws targeting the reproductive rights of women or the rights of LGBTIQ+ people. However, recognition alone is no longer enough. If the EBRD is serious about an inclusive economic transition, its new Strategy must move beyond business as usual and confront the political and economic realities shaping its operations through stronger, more ambitious and more targeted actions.

A test of the EBRD’s mandate

The EBRD is not just a development bank. It has a mandate to support democracy and pluralism. Gender equality and inclusion are not optional extras, but core to its mission. Yet the draft strategy still primarily frames gender equality as an economic issue rather than a matter of rights, governance and democratic resilience. While the EBRD may see this as a more convincing approach to stakeholders, the current backlash against gender equality and inclusion in many countries, including those in Europe and Central Asia, calls this approach into question. If applied in isolation, this approach limits the EBRD’s ability to respond to realities on the ground, where economic exclusion is often reinforced by legal discrimination and political repression. The Strategy highlights the importance of policy dialogue in shaping lasting reform. However, such engagement is often confined to politically convenient areas that neatly align with national priorities. That is not enough. In many EBRD countries of operation, national laws and policies are increasingly being used to restrict gender equality and the inclusion of LGBTIQ+ people. In other regions, harmful practices such as child marriage and female genital mutilation persist, and consensual same-sex relations are criminalised in multiple countries. If policy dialogue avoids these realities, it risks becoming merely performative. To be effective, policy dialogue must engage precisely where the barriers are greatest, even when doing so is politically sensitive. After all, policy dialogue should be driven not by what is easiest, but by what is most necessary.

A worrying decline in ambition

Equally concerning is the proposed reduction in ambition. The Strategy sets a target of 40% of projects promoting gender equality, which is lower than the EBRD’s recent performance. Meanwhile, the proposed impact indicators for human capital suggest no significant increase in skills development or workplace reforms. More significantly, the Strategy lacks the tools required to respond when commitments are weakened during implementation, whether due to political pressure, client resistance or shrinking civic space. At a time when opposition to gender equality and inclusion is intensifying, standing still effectively means falling behind. Instead, the EBRD should raise its ambitions, targeting at least half of its portfolio to meaningfully advance gender equality, while ensuring that commitments deepen alongside growing investment volumes.

Inclusion must be explicit

The Strategy frequently refers to ‘underserved groups’ without clearly defining them. This ambiguity matters. Without explicit recognition, groups facing the most severe discrimination – particularly LGBTIQ+ people, ethnic minorities, women living in rural areas, and groups experiencing intersecting inequalities – risk being overlooked in practice. Clear definitions are essential to ensure that interventions reach those most affected by exclusion. Experience shows that what is not named is often not measured, and what is not measured is rarely prioritised. If the EBRD is committed to inclusion, it must clearly identify its target groups and track outcomes through precise, disaggregated indicators. Without robust monitoring that captures systemic changes such as gender pay gaps, leadership representation, the inclusion of LGBTIQ+ people, and rates of gender-based violence and harassment – rather than just project outputs – it will be difficult to assess whether investments are transforming inequalities or merely operating within them.

A critical turning point

The EBRD’s new Strategy comes at a pivotal moment. Around the world, the fight for equality is facing growing opposition from increasingly organised forces. The EBRD has an opportunity to take the lead, but only if it strengthens its approach.

First, the EBRD must recognise the backlash against gender equality and LGBTIQ+ inclusion as a material risk, integrating it into its country strategies and project design.

Second, the EBRD should raise – not lower – its ambitions by ensuring that at least 50% of its investments actively promote gender equality.

Third, the EBRD must clearly define which vulnerable groups it seeks to support, ensuring that dedicated programmes, effective tools, including policy dialogue, and robust impact monitoring are in place to reach those most at risk.

Finally, the EBRD must treat gender equality and inclusion as central to its democracy mandate, not just as drivers of economic growth.

The question is not whether the EBRD recognises the challenges; it clearly does. The question is whether it is willing to match this recognition with the ambition, clarity and political courage required to address these challenges. If it does, the Strategy could become a meaningful tool for advancing inclusive development. If not, it risks becoming just another well-intentioned document that fails to deliver when it matters most.

More buses, but is the system better? Evaluating Bishkek’s public transport network

Michaela Kozminova — Wed, 29 Apr 2026 08:30:20 +0200

Over the past few years, the public transport fleet in Bishkek – Kyrgyzstan’s capital city – has changed visibly. In a city where privately operated minibuses, known as marshrutkas, dominated for years, new gas-powered buses and electric buses are now in service. Today, the municipal fleet includes around 1,600 vehicles. Of these, 424 were purchased through grants and loans provided by international financial institutions, including the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), and Germany’s development bank (KfW). At first glance, this appears to be a clear move towards more sustainable urban mobility. However, an analysis of Bishkek’s public transport system, conducted by local researchers with support from CEE Bankwatch Network, suggests that fleet renewal alone has not made public transport genuinely attractive or efficient.

Modernisation, but to what end?

According to an official survey commissioned by the Bishkek mayor’s office as part of the city’s 2050 General Plan, only 38% of residents selected public transport as their primary mode of travel, with 41% of residents travelling by car. The rest walk or use personal mobility devices. These figures point to a deeper structural issue: the reform has focused primarily on replacing vehicles, while the system itself remains in need of fundamental improvement. The analysis identified several key barriers that may prevent residents from shifting from cars to public transport. First, only 18% of the fleet can be described as fully comfortable, inclusive, safe and environmentally friendly. Many buses lack air conditioning, not all interiors are fully inclusive, and part of the fleet still fails to meet modern environmental standards. Second, pedestrian access to stops remains limited. GIS analysis shows that only 25% of Bishkek’s built-up area lies within a 500-metre walking distance of existing stops. This means that many residents must already incur additional time and effort costs at the very first stage of their trip, making public transport less competitive compared to cars. Third, the city still lacks a connected bus priority system. Dedicated bus lanes cover only 2% of the total route network length. Passengers lose time in traffic congestion alongside motorists. Because of traffic jams, service intervals are disrupted, travel times increase, and travel itself remains unpredictable. International practice in public transport development recommends three types of measures known as the ‘avoid–shift–improve’ approach:

avoid – reduce the need for trips through better urban planning;

shift – switch demand to more sustainable modes of transport;

improve – upgrade vehicles and technologies.

However, the changes in Bishkek primarily focus on the third measure: fleet renewal. Yet even the most modern ‘green’ buses do not, on their own, solve passengers’ problems, shorten travel times, or make public transport a more attractive option.

Beyond new buses

For public transport in Bishkek to truly become more convenient and attractive, the city must adopt a more comprehensive approach, including:

developing a polycentric urban structure to reduce the need for long-distance travel;

optimising excessively long routes and introducing a free transfer system;

increasing pedestrian access to stops, particularly in residential districts and peripheral areas;

creating a connected network of dedicated bus lanes; and

integrating buses with rail, cycling, and pedestrian infrastructure as well as car use.

In summary, while investment in greener and more modern rolling stock is necessary, it remains insufficient. Unless the city implements these changes, it will be left with a system that is modern in form, yet fundamentally ineffective – one that ultimately fails to compete with the speed, convenience and reliability of the car.

Power to the people: How distribution grid improvements can speed up energy transformation in the Western Balkans

Magda Wiejak — Thu, 23 Apr 2026 13:50:16 +0200

The transformation of the energy sector in the Western Balkans is progressing at different speeds. Much of the system still relies on outdated fossil fuel plants and large-scale hydropower production. However, all countries in the region have started to see an influx of intermittent renewable energy. While there are exceptions, this new capacity generally consists of utility-scaleinstallations directly connected to the transmission or distribution grids, functioning as additions to the existing centralised system.  Yet the system can only absorb so much intermittent production at present. Transmission system operators in Western Balkan countries typically estimate that around a third of grid connection requests can be accommodated without compromising the stability or security of supply. They also identify the connection of multiple utility-scale photovoltaic plants to the distribution grid as a cause of excessive voltage variations and increased power losses. While power transmission systems have their own issues to resolve, investment in the distribution grid needed to speed up the transition is lagging behind. Most of the infrastructure was built in the last century and has hardly been upgraded, despite legally binding obligations.  Distribution grid losses are significantly higher in most Western Balkan countries than in EU Member States. Bosnia and Herzegovina is the only country in the region with losses below 10%. However, losses in Montenegro, North Macedonia and Serbia are around 11 to 14%, in Albania almost 20%, and in Kosovo above 20%. Part of the issue lies with the non-technical lossescaused by outdated energy consumption metering and billing systems.  The current situation does not allow for sufficient capacity to enable more prosumers and energy communities to connect. To achieve this, the grid needs to be flexible and capable enough to redistribute electricity in real time from many small producers to wherever it is needed most at that moment.  Enabling households and small and medium-sized enterprises to actively participate in the energy system by generation as well as consuming electricity is a necessary step in the energy transformation. This will motivate them to invest more in energy efficiency and to proactively contribute to policy development.  The benefits will be shared by everyone. The more prosumers and energy communities that join the system, the lower electricity prices will be. Lower losses and modern metering and billing systems will benefit the system operators. And finally, more stable national systems will lead to stability in the regional and European electricity markets.  This is why financiers, such as development banks and the EU, must prioritise investment not only in electricity generation, but also in improving the distribution grid. This is the only way the system can move away from large-scale, climate-damaging, centralised power plants and truly embrace an energy-efficient and renewable future for all. 

Community energy gathers momentum in Estonia

Dora Crnčević — Wed, 15 Apr 2026 14:51:43 +0200

At a time when the energy crisis, climate goals, and security issues are becoming increasingly intertwined, community energy presents a strategic yet significantly underutilised opportunity for central and eastern Europe to build a more resilient energy system. As the EU transitions to clean energy, community-based energy solutions are becoming an increasingly important grassroots driver, one that links climate goals with local development and social cohesion. Estonia’s Energy Sector Development Plan (ENMAK) adopted earlier this year, has taken the first steps towards mapping the potential obstacles and opportunities for community energy at the national level. Unlike in many other EU Member States, the development of community energy in Estonia has yet to become a separate strategic goal, largely due to a lack of state support. Supporting community energy initiatives and promoting their wider adoption would bolster the functioning of Estonia’s local energy sector, the transition to renewable energy, and its overall resilience. At the local level, this strategy would in turn help communities cope with a variety of challenges, from ensuring energy security to creating new opportunities in areas like transport and the energy supply of public buildings.

What motivates Estonian communities to generate energy together?

Despite the scarcity of subsidies, a few trailblazing communities in Estonia have taken the initiative to produce energy locally. Energy cooperatives are today rarely formed out of convenience, but out of necessity. When an existing solution no longer works or becomes too expensive, alternatives have to be found. The effects of high electricity prices, an unreliable heat supply, or poor infrastructure – all of which are keenly felt during a harsh winter – tend to motivate communities to come together and act. The experience of Seto Aiad, a gardening cooperative in the village of Obinitsa in the southernmost part of Estonia, is an example of how economic pressure can provide the impetus for action. Faced with high electricity costs for keeping their cold storage facility running during the summer, the members were left with no other option but to establish an energy cooperative. With an eye on long-term sustainability, this local initiative is taking a far more climate-friendly approach than simply relying on transporting oil shale energy, much of which is lost on its journey from the other end of the country in Ida-Virumaa, the country’s just transition region. Even within Ida-Virumaa itself, which has been mass-supplying electricity to households for the past century, the transition to community energy has begun. In the village of Savala, the community is now working together to renovate six apartment buildings, with the logical next step of generating the electricity consumed on-site. However, these pioneers often face significant challenges. There are no guarantees, and collaborative investment in the community and local life has yet to sufficiently take root in wider society. Leaders of the Kääpa village energy cooperative in Jõgeva County in the east of the country have found that, even when the community does show interest and the idea of shared energy seems exciting and sensible, people become much more cautious during the implementation phase. And this is precisely why success stories that can be later replicated in other villages and regions are so crucial, as they build confidence and reduce the fear of getting started. Community energy has the potential to play a significant role not only in gardening and consumer cooperatives, but also in other forms of collective action where networks of cooperation and trust already exist. Where people are accustomed to making decisions together and sharing responsibility, energy cooperation is a natural next step.

Looking to the future

Beyond inspiration and determination, the wider adoption of energy cooperatives requires systemic support. Currently, the development of community energy is being held back by a lack of awareness, limited infrastructure and financial complexity. Until Estonia introduces the targeted subsidies that are widely available elsewhere in Europe, energy cooperatives will continue to have to make a large initial investment using their own funds, which rules out many potential participants from the outset. Another major bottleneck is Estonia’s electricity grid, historically designed for one-way electricity transmission of power from large producers to consumers. But this structure does not sufficiently support distributed and community-based production or allow for flexible electricity distribution. As a result, current initiatives often have to focus on ensuring that as much of the energy produced as possible is consumed locally. Community energy is more than just a niche solution in Estonia - it’s a transformative opportunity to shape a fairer, cleaner and more resilient energy system. To support this shift, steps need to be taken on multiple fronts. At the national level, the government can send a clear signal by making community energy a strategic priority, creating simple and understandable support measures, and adapting the grid and regulatory framework to better suit distributed electricity generation. Even modest, targeted start-up grants or financial guarantees would help cooperatives overcome the most challenging initial phase. Local governments can also take the lead by mapping regional opportunities, launching pilot projects, and bringing together interested parties, including residents and businesses. At the community level, the most important thing is to start a conversation about how shared needs can be met collectively while keeping an open mind. From this point of strength, communities can seek out partners and expert advice. As the above success stories show, growth only occurs when people dare to learn and experiment together.