Bankwatch https://bankwatch.org Fri, 17 Apr 2026 14:30:55 +0000 <![CDATA[Community energy gathers momentum in Estonia]]> Wed, 15 Apr 2026 14:51:43 +0200 Dora Crnčević 155730 2026-04-15 14:51:43 2026-04-15 14:51:43 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.]]> <![CDATA[True electricity market integration requires environmental compliance]]> Thu, 19 Mar 2026 09:30:13 +0100 Magda Wiejak 155612 2026-03-19 09:30:13 2026-03-19 09:30:13 Before the EU’s CBAM definitive regime began on 1 January this year, many stakeholders questioned whether CBAM should be delayed in the electricity sector. Some even questioned whether electricity should even remain included at all. After all, the Energy Community Treaty has for 20 years promoted integration of the Western Balkans’ energy markets with those of the EU, rather than adding new barriers.  Although CBAM is likely impacting this process to some extent – it’s too early to tell how much – much of the debate currently focuses on its negative impacts, without acknowledging the positive potential of CBAM to drive forward alignment with EU energy and climate policy. The right of Western Balkan renewable energy producers to export electricity to the EU unhindered is also often taken as a given in the debate.   Our new position paper, signed by 63 civil society organisations, therefore seeks to highlight another side of the story: that electricity market integration is desirable, but it must go hand in hand with environmental and climate compliance in the electricity sector.

Not playing by the rules

The Western Balkans’ deadly coal power plants are notorious, but it’s not merely a question of fossil fuels versus renewables, but also a wider lack of environmental governance. Despite being a biodiversity hotspot, the countries fail to properly protect their valuable natural areas, and to properly apply basic EU safeguards like strategic and project-level environmental impact assessments. Appropriate assessments under the Habitats Directive and water impact tests under the Water Framework Directive are barely applied at all. Western Balkan governments want to participate in the EU energy markets without playing by the rules, and this isn’t fair to their people, nature or others who do play by the rules. The Energy Community Treaty was designed to avoid this situation. And while it has contributed significantly to moving forward the Western Balkan countries’ legislative alignment with the EU, its environmental safeguards are lagging behind. It also lacks financial penalties, allowing its Contracting Parties to procrastinate for years on compliance. 

Finally, deadlines with consequences

CBAM has therefore been a breath of fresh air, finally providing clear deadlines for the countries to either face its consequences or gain exemptions for electricity by applying EU energy and climate law, including emissions trading schemes equivalent to that of the EU by 1 January 2030. Progress has been slow, but Serbia, Montenegro and Moldova have transposed the legislation needed for electricity market coupling – the first precondition for exemption from CBAM. Montenegro has also recently committed to carbon neutrality by 2050.  The EU must therefore not give up on CBAM in electricity, but rather use it to the maximum to help move forward compliance with EU energy and climate policy. More broadly, the European Commission must make sure the exporting countries finally comply with all the relevant EU rules, including environmental safeguards.

The way forward

Western Balkan governments may not realise it yet, but the Commission would be doing both the EU and the region a favour by applying the CBAM exemption criteria and reductions in CBAM charges strictly. Insisting that the countries meaningfully advance on decarbonisation in order to gain CBAM exemptions for electricity will help to make up for the lack of enforcement mechanisms in the Energy Community Treaty, and introducing carbon pricing would help them mobilise resources to fund a just energy transition.  More broadly, the Commission also needs to apply joined-up thinking. Access to EU funds for energy must be conditioned on enforcement of the Energy Community Treaty, and full transposition and enforcement of nature and water protection safeguards in the countries, to improve renewable energy sustainability. The EU also needs to avoid creating uncertainty about its own policy directions. Recent calls by Italy’s government and others to suspend the ETS are totally irresponsible. They largely result from countries’ own misguided investments in gas, and would increase the EU’s dependence on imported fossil fuels, and vulnerability to price shocks like the current one. Although the Western Balkan countries need to mobilise their own resources for just transition via carbon pricing, the EU also needs to show it is serious about supporting a just transition in the region by earmarking financial support for carbon-intensive regions in the next EU long-term budget. Only this way can we ensure a level playing field in the electricity sector and a more socially and environmentally sustainable energy transition.]]> <![CDATA[How a pioneering Slovak town is modernising its district heating system]]> Tue, 17 Mar 2026 14:52:29 +0100 Magda Wiejak 155595 2026-03-26 11:19:52 2026-03-17 14:52:29 How Slovakia’s coal phase-out changed the game  Partizánske is a mid-sized town in western Slovakia, located along the Nitra River in the Upper Nitra region. It was founded in the 1930s as an industrial town connected to the nearby Nováky coal power plant. Home to roughly 20,000 residents, the town has its own municipally owned district heating system, which today is powered by 66% fossil gas and 34% biomass.  In December 2018, the Slovak government announced that coal would be phased out by 2023 at the latest, giving the Nováky plant a five-year countdown until shutdown. This meant that all municipalities connected to the plant needed to find a new heating source. However, unlike some neighbouring towns, Partizánske was no longer directly dependent on domestic brown coal for its district heating.  Yet the national coal phase-out changed the outlook for the entire region. With coal leaving the energy mix, district heating systems across the region would have to reinvent themselves. By December 2023, all of the municipalities had successfully developed plans for replacement systems for all of the affected households across the region.   However, the reinvention couldn't stop simply at transitioning to gas. With the EU's target of complete decarbonisation by 2050, the transformation of these systems had to go further. This meant municipalities had to start planning how to modernise their district heating systems using sustainable, renewable and modern technologies.  

Planning for the future 

Partizánske started by working with the Slovak non-governmental organisation Friends of the Earth–Centre for Environmental Public Advocacy (Friends of the Earth–CEPA). It developed an in-house pre-feasibility study, outlining a structured plan for transforming the town’s district heating system. The study mapped: 
  • heat consumption across individual buildings and zones;
  • the technical condition of boiler rooms;
  • equipment efficiency and emissions; 
  • operating costs;  
  • precise pipeline routing;
  • collisions with underground utilities; and
  • terrain constraints; 
Three core ideas emerged: interconnecting of the two currently separate heating systems, utilising geothermal resources and, in the long term, recovering waste heat from the town’s wastewater treatment plant. The next step was to consult external experts to assess the viability of these conclusions.  In February 2023, Partizánske reached out to the European Investment Bank (EIB). The EIB’s advisory services typically focus on larger infrastructure projects in major cities. Yet the 2022 launch of the Technical Assistance for Regions Undergoing a Green Energy Transition (TARGET) programme by the EIB and the European Commission opened the door for regions like the Upper Nitra region that have been historically dependent on fossil fuels like coal, peat, and oil shale.  As the municipality increasingly demonstrated readiness, clarity and technical preparation, interest grew. Eventually, a formal technical assistance agreement was signed in August 2024 under the Energy Efficiency and Energy Advisory Division of the EIB’s Energy Department. By September 2024, the terms of reference had been approved, with external experts procured up until March 2025. A kick-off meeting followed in April 2025, and the final feasibility study was published in February 2026.   The technical assistance confirmed the conclusions of the earlier Friends of the Earth–CEPA study: the need to interconnect the existing heating systems, and the potential to use geothermal energy and recover heat from wastewater. This endorsement will help the municipality apply for funding, as it gives investors and partners confidence in the viability of the planned project, which the EIB estimates at around EUR 6.1 million.

Next steps 

With this feasibility study now complete, Partizánske is moving forward by preparing a technological concept. This will define specific technologies, required capacities and preliminary cost estimates, helping the municipality to secure building permits and negotiate financing, including an application to the Slovak Environmental Fund’s district heating modernisation financing schemes from the EU’s Modernisation Fund.   Other immediate major structural decisions have already been agreed. The current four-pipe system will be replaced with a two-pipe system, simplifying infrastructure and improving efficiency. Boiler rooms in critical or emergency condition will be prioritised and integrated first.  Additionally, Partizánske is now preparing a communications strategy aimed at residents, with the goal of building long-term public support through clear, accessible information – a particularly important step as municipal elections approach.   This pathway shows that even small municipalities can use EUservices such as the TARGET programme. Thanks to thorough preparation and municipal readiness, Partizánske is set to become a first mover in Slovakia in decarbonising its district heating system. This approach has potential for replication across Europe, where additional EU support programmes are available through the Directorate-General for Regional and Urban Policy (DG REGIO), the Joint Assistance to Support Projects in European Regions (JASPERS) programme, Horizon Europe, and networks like the EU Covenant of Mayors.  [/vc_column_text][/vc_column][/vc_row]]]> <![CDATA[Can the EU’s Social Climate Fund reach vulnerable households in Estonia?]]> Thu, 05 Mar 2026 15:17:54 +0100 Dora Crnčević 155561 2026-03-05 15:20:50 2026-03-05 15:17:54 Like other EU Member States, Estonia has submitted its social climate plan to the European Commission. The plan, which has recently undergone changes based on the Commission’s recommendations, is expected to focus primarily on building renovation and energy efficiency measures, while also addressing the broader complexities of energy and transport poverty.   The Estonian Green Movement is currently working closely with national decision makers to answer a fundamental question: How can the Social Climate Fund – one of the EU’s first major instruments linking climate policy with social justice – best reach vulnerable households?  To find an answer, we hosted a round-table discussion on 13 January 2026 in Tartu. The event brought together regional and national representatives to identify and evaluate successful solutions and innovative measures adopted in countries across central and eastern Europe.   Regions left behind  While Estonia has made major strides in the renovation of multi-apartment buildings in recent years, the benefits have not been distributed equally. A clear gap remains in regions with high levels of energy poverty, such as in Ida-Virumaa – Estonia’s just transition region – as well as in the south-east of the country.  Our recent round-table event focused on these weaker regions, identifying two key bottlenecks: first, regional authorities urgently require greater technical assistance and knowledge; second, the current ‘first-come-first-served’ approach to funding often leaves regional authorities with less administrative capacity behind. Participants also agreed that future measures must be intentionally designed to target vulnerable households.   In these regions, the high proportion of older people are typically reluctant to invest in large-scale building renovations. Additionally, many of the regions’ five-storey multi-apartment buildings contain as few as 10 households, making the individual financial outlay required to renovate a property prohibitively high, which also discourages residents from the idea of renovating in the future. However, regional officials noted that the existence of a renovated roof is often a sign that an apartment association is cooperative and potentially open to a deep renovation.  While Estonian cities offer examples of neighbourhood-based initiatives successfully tackling building renovations – notably the SOFTAcademy project in Tallinn – regional authorities indicate that these urban models are difficult to replicate in rural areas.   Finally, the language barrier must also be taken into account. According to 2021 statistics, 73% of the population in Ida-Virumaa are native Russian speakers. All of the regional authorities agreed that information must be accessible in Russian to be effective. Success in these areas also depends on informal engagement and sharing information among the local community. Establishing a ‘friendly connection’ at the regional level is not only possible but essential for building trust.   A fairer way to fund renovations  Researchers at the Centre of Applied Social Sciences at the University of Tartu recently released the results of a new data-driven model aimed at improving how renovation subsidies for apartment buildings are allocated in Estonia. Already tested in Tallinn’s Annelinn and Karlova neighbourhoods, the model seeks to direct financial support towards households experiencing the highest rates of energy poverty.  According to the model’s creator, Mariia Chebotareva, Estonia’s existing renovation support scheme focuses solely on the technical parameters of buildings and fails to reflect the socio-economic status or financial capacity of households. The new model seeks to address this gap by combining socio-economic data with building-level technical parameters. Using specific datasets, the model generates a ranking of apartment buildings based not only on their energy efficiency, but also on the risk of energy poverty among households.   This innovative model is a first for Estonia. If implemented, it would replace the existing performance-based approach – aptly described in the Estonian language as a ‘race of nimble fingers’ – with a more socially just system. Though the researchers note that accessing and integrating the data required will be a challenge, simplifying the system for regional authorities could help them better identify and support those most at risk.  Making EU money work  Ensuring that EU funds deliver equitable benefits to the regions and people of Estonia is crucial. The model introduced by the Centre of Applied Social Sciences has the potential to become a ‘best practice’ in Estonia and inspire similar models across central and eastern Europe. At the Estonian Green Movement, we’re committed to making sure that EU policy translates into real benefits at the local level – and that those who need the most support are not overlooked. As the cost of living in Estonia continues to rise, the design and implementation of future measures is now more important than ever. ]]> <![CDATA[Deregulation endangers Latvia’s forests]]> Thu, 26 Feb 2026 08:56:33 +0100 Magda Wiejak 155505 2026-02-26 09:33:26 2026-02-26 08:56:33 Latvia’s forests, in particular, are coming under increasing threat from short-sighted policy proposals that prioritise short-term profit over long-term sustainability. 

Latvia joins EU deregulation drive 

The push to increase competitiveness by simplifying regulation has sat high on the EU agenda in recent years, translating into initiatives at both EU and national levels. The European Commission, for example, has proposed a number of ‘omnibus’ packages aimed at streamlining legislation, with EU Member States simultaneously reviewing which requirements can be reduced to improve operating conditions for businesses and boost economic growth.   Capitalising on this deregulation trend, Latvia’s Ministry of Agriculture has put forward a series of far-reaching proposals aimed at reshaping forestry policy. 

Forestry safeguards under pressure 

In October 2024, the Ministry proposed amendments to logging regulations that would have significantly weakened safeguards, including more than doubling the maximum size of clearcuts in many forests as well as expanding canopy gaps – openings in tree cover – to a quarter of the permitted size.  The amendments also sought to considerably lower thresholds for declaring forest stands unproductive, effectively making them eligible for harvest sooner. Additionally, under the pretext of disease prevention, the rules for harvesting tree species like aspen and spruce were set to be eased. According to the Ministry, the aim was to grant forest owners greater freedom and to accelerate the permitting process.   Fortunately, sustained pushback from environmental organisations, certain political parties within the government, and concerned institutions led to the postponement of these amendments. The Ministry is currently organising another round of discussions with stakeholders, with a significantly reduced set of amendments now under consideration.  But these are not the only restrictions the Ministry is intent on loosening. In September 2025, the Ministry proposed amendments to the Forest Law, allowing a consultation period of just three working days. The proposals included a substantial reduction in the minimum harvest age for several tree species and a highly restrictive and baseless definition of ‘old-growth forests’, setting a minimum area of 30 hectares along with other excessive requirements.  The proposals also attempted to introduce an unlawful provision, namely that any forest management activities compliant with the Forest Law would automatically satisfy nature protection legislation, even though many key protection measures are not covered under the Law. As before, efficiency was used as a justification for deregulation.  Once again, due to numerous objections from environmental organisations, institutions and other stakeholders, the amendments were withdrawn. A key counter-argument in both cases was the precedent set by a 2024 Constitutional Court case, in which amendments significantly reducing minimum tree diameters for harvesting were repealed due to the lack of a proper environmental impact assessment. 

Defence at all costs? 

Similar trade-offs have emerged in the context of efforts to increase logging, but under a different pretext – generating additional revenue to support Latvia’s defence spending. While investment in defence infrastructure is undeniably necessary in today’s geopolitical climate, funding sources should seek to avoid creating long-term damage elsewhere. In May 2025, the Minister of Agriculture made the first of several attempts to significantly increase allowed harvesting volumes in state forests until 2030, arguing it would raise over EUR 100 million, including funds for defence.  However, the proposal was met with widespread criticism: not only on ecological grounds, but also from an economic perspective. Critics contend that such a short-term approach – one reliant on a sudden intensification of harvesting – would likely lower timber prices as well as anticipated profits, and limit harvesting potential in the coming years.  Another objection concerns the lack of existing capacity within the country to harvest and process such volumes. This will likely result in delays and an increased share of low-value timber exports, given that most of Latvia’s exported timber is already minimally processed wood, including roundwood, fuel-wood, sawn wood, and plywood. 

Governing without a plan 

Notably, all of the Ministry’s legislative efforts have been pursued without an updated mid-term forestry policy planning document. Latvia’s existing forest policy guidelines cover the period from 2015 to 2020, yet no new document has been adopted since.  Draft guidelines released for consultation in autumn 2025 were widely criticised – including by other state institutions – for neglecting the social and ecological functions of forests emphasised in the national forestry policy. Pushing through legal amendments in the absence of clear, balanced and updated policy guidelines provides yet another example of irresponsible and short-sighted governance in action. 

How far will deregulation go? 

This period has proved demanding for both forestry institutions and nature protection organisations, but the fight is far from over. Removing environmental safeguards may indeed make economic activity easier in the short term, but at what cost?  Nature is not limitless – ecosystem capacity and natural resources are finite, and recovery can take decades. This is why it’s so essential to balance the environmental with the social and economic – the latter two being entirely dependent on the first. Clean air, fresh water, healthy soils, and resilient ecosystems are prerequisites for human well-being.  Latvia’s forests are a national treasure, and should offer far more than just short-term economic gains for the privileged few. State-owned forests, comprising roughly half of the country’s total forest area, should lead by example. They must provide benefits that go beyond timber profits and instead serve to safeguard Latvia’s rich local biodiversity. 

Time for action 

In Latvia, individuals and civil society organisations have the right to participate in public consultations and decision-making processes, defending their right to a healthy environment. They can also make their voices heard through elections and by supporting political parties that act responsibly and plan for the long term.  Similar opportunities exist at the EU level. While the EU’s recent call for feedback on simplification has now closed, engagement remains possible through initiatives such as the Hands Off Nature petition, which calls on EU policymakers to halt the erosion of environmental safeguards. Now is the moment to speak up and push back – before short-term political choices turn into irreversible environmental damage. ]]> <![CDATA[Fear and fossil fuels in Romania]]> Wed, 11 Feb 2026 09:20:19 +0100 Magda Wiejak 155449 2026-02-11 10:54:41 2026-02-11 09:20:19 A 3-page draft law initiated by former energy minister, Sebastian Burduja, last week sent shockwaves among coal dependent communities and climate activists alike. Accompanied by 50 pages of justification, wrapped in national security rhetoric and delivered with a side dish of geopolitical fear tactics, the draft law aims to derogate from the country’s Decarbonisation Law. It re-opens the possibility of building new coal power plants and operating new and existing ones alike, under vaguely formulated conditions.  But strip away the alarmist language about Russian invasions and infrastructure attacks, and what remains is a cynical attempt to derail Romania's energy transition, betray coal-dependent communities, and potentially defraud the EU of EUR 2.14 billion – Romania’s allocation under the Just Transition Fund. 

Manufacturing crisis for political gain 

The 50-page justification opens with the Russian invasion of Ukraine and the shock it delivered to EU energy markets. However, it omits to acknowledge that since then European energy markets have recovered and diversified. The EU's response wasn't to resurrect coal, it was to accelerate renewables.  Romania itself has surpassed its renewable energy targets, adding more than 1,200 megawatts in 2025 and projecting between 2,500 to 3,800 megawatts this year. The energy landscape is transforming rapidly, but you wouldn't know it from reading this law's apocalyptic preamble.  The justification then goes on, suggesting Russia might attack Romania's electricity infrastructure, therefore reserve coal capacity is needed. This isn't energy policy, it's fear-mongering dressed up as strategy.   Arguably, one of the most disturbing details is the law's citation of a national security strategy from 2010, which indeed mentioned coal stockpiles for security reasons. In 2010, coal contributed roughly 20-25% to Romania's energy mix. Now it is just 13.7% and keeps falling. Context matters.  In 2025 it was renewables that supplied the largest share of Romania’s electricity mix: wind, solar and hydropower. Interconnection capacity with neighbouring countries has expanded, storage is catching up. The grid looks fundamentally different. Using 2010 data to justify 2026 energy policy is not only outdated, it's deliberately cherry-picking a moment in time that supports a predetermined conclusion, while ignoring 15 years of transformation. 

The Just Transition Fund – taking the money but refusing the transition 

In 2022, Romania received an allocation of EUR 2.14 billion from the EU Just Transition Fund (JTF) specifically to support coal phase-out by 2032. This fund is designed to support almost 30,000 workers through retraining and to create approximately 11,000 new jobs. The whole logic behind the JTF funding is Romania's commitment to transition away from coal. Without coal phase-out, there is no transition to fund. And who will be deceived at the end of this political theatre yet again? Coal-dependent communities, who are regularly given false hopes by politicians that lack courage to plan for the real future. 

The State aid paradox 

Oltenia Energy Complex, Romania's main lignite producer, has since 2021 received hundreds of millions of euros in State aid specifically for closure operations. The country’s hard coal mine operator was also granted nearly EUR 800 million State aid for closure in 2024. This money has already been disbursed and spent, justified under EU State aid rules as compensation for the costs of phasing out uneconomic coal operations.  State aid for closures is legal under EU rules precisely because it facilitates an orderly phase out of operations that would otherwise fail in the market. Closure is the key condition for the aid.  Now, Burduja and thirty other parliamentarians want to put coal 'back on the table and into production’. But what happens to the hundreds of millions in closure aid already received? If coal operations are to continue, that State aid becomes illegal retroactively. It was granted under false pretences. Under EU State aid rules, illegal aid must be recovered, with interest. This additional financial burden could very well destroy the industry they are trying to revive. And the law should explicitly stipulate the mechanism for returning this aid to the state budget. It doesn't.   So this adds another bill to the tab: EUR 2.14 billion in Just Transition Funds received under commitments this law would violate, and over EUR 3 billion for restructuring of Oltenia Energy Complex and closure of hard coal mines. This is over EUR 5 billion that is likely to be lost if this law is adopted. 

The communities politicians claim to protect 

Every year that politicians delay the inevitable coal phase-out is another year of distraction from genuine alternatives. Every legislative attempt to extend coal operations signals to potential investors that Romania isn't serious about transition.  The cruel irony is that this law, which will be used in political discourse as protecting coal workers, ensures their continued precarity and prolongs a structural limbo. For some, this has been going on for over a decade. It perpetuates dependence instead of facilitating transition. It offers the illusion of security while postponing the hard work of creating actual alternatives. 

Ruling by fear 

This coal revival law didn't arrive in isolation. It was submitted to parliament on the same day as another Burduja initiative: a law to classify hydropower plants as military objectives of national security. Both laws invoke ‘national security’ to bypass environmental procedures in force, protected areas regimes and property law. Both weaponize fear of war, enemies, and sabotage. 'National security’ has become a new catchphrase that short-circuits democratic deliberation, environmental protection, and transparency. 

What about ‘We need coal for grid stability’? 

Romania's grid is already diversifying rapidly, renewable capacity is expanding by thousands of megawatts annually and interconnection with neighbouring countries has improved significantly. Grid stability doesn't come from clinging to 20th-century baseload thinking, but from diversification, storage solutions, smart grid technology, and interconnections that allow for flexibility and resilience.  

The choice ahead 

The choice to phase out coal was made years ago, and is justified by economics, climate imperatives, and EU commitments that make this trajectory inevitable. The real question is whether this will happen in an orderly, just manner that supports affected workers and communities or whether politicians will delay until crisis forces chaotic closures without support systems in place.  This draft law offers the illusion of security while guaranteeing instability. It invokes the protection of workers while blocking their access to transition support. It wraps itself in national security rhetoric while undermining Romania's actual long-term energy security. Finally, it is financially reckless, facing the prospect of having to give back billions of euros in closure aid. If Romania is to stay on the path of prosperity and sustainable development, this law must be rejected. ]]> <![CDATA[Empowering communities: Using digital innovation to drive Ukraine’s green recovery]]> Thu, 05 Feb 2026 14:28:04 +0100 Magda Wiejak 155434 2026-02-05 14:28:04 2026-02-05 14:28:04 Communities at the epicentre of change  The Regional Centre for Economic Research and Business Support is a non-profit foundation that works with communities across Ukraine, and we have first-hand knowledge of the local investment and recovery challenges they face. Despite the war, these communities are increasingly taking the initiative. Rather than waiting for solutions from above, they’re independently seeking ways to achieve energy independence and environmental security.  However, showing initiative doesn’t always translate into results. Our recent assessments of municipal capacity and investment readiness reveal a significant gap between the ambition of these communities and their current capacity to effectively prepare projects that meet the requirements of potential donors, particularly the demanding compliance criteria of commercial and international banks.   This deficit is largely due to a critical shortage of qualified personnel and a lack of accessible tools. Local communities simply cannot afford expensive consultants, while state support mechanisms tend to prioritise large-scale infrastructure projects, resulting in local initiatives being overlooked. 

Driving results, not just spending  

Our view of the current state of public investment management reform in Ukraine is clear: the system must transition from a ‘patching holes’ model to one driven by data management. We welcome the development of Ukraine’s public investment management system – the Digital Recovery Ecosystem for Accountable Management (DREAM) – which represents a significant step forward in transparency. However, for a community project to be considered for inclusion in this ‘showcase’ and to attract investors, it must be technically and economically flawless.   We’ve also identified another systemic challenge: state institutions don’t always have the time or resources to provide communities with high-quality methodological support. To address this gap, we’ve launched the ‘project navigator’ designed to level the playing field, providing communities with comprehensive training in effective project management.  

Advantages of an independent tool 

Community representatives from across the country are already using the project navigator to organise and guide their recovery projects. First, the tool provides direct access to expertise. Second, as a completely independent tool, it helps stakeholders resolve the problem of ‘information overload’ and filter out unreliable data.  After entering their project data, communities can assess their compliance with basic sustainability requirements in a matter of hours. And the feedback has been unanimous: there’s a huge appetite for a digital solution that not only removes administrative burdens, but also pinpoints areas where projects can be improved. Some of its key advantages include:  
  • Independent and objective: With no political mandate, the tool provides an accurate reflection of a community’s actual readiness – one based on data rather than lobbying. 
  • Enhanced project readiness: Projects developed using the tool are primed to receive high scores in the DREAM system. The tool’s rigorous and transparent feasibility framework results in higher-quality project submissions that stand a much greater chance of being selected for the state’s public investment portfolio and securing funding. 
  • Impact monitoring: The tool enables donors not only to provide funding, but also to track the effectiveness of their investments through integrated monitoring modules. 

From strategy to investment 

This structured approach allows communities to develop their first green project portfolios. This means local waste management plans and energy strategies no longer just exist on paper; they become fully functioning roadmaps that serve as a credible foundation for securing project financing.   Ensuring that Ukraine’s public investment management reform truly benefits communities requires a far greater collective effort – from the state, its partners, international financial institutions, civil society, and the communities themselves. The success of any recovery project – particularly in the case of Ukraine – should solely depend on the quality of its strategy and the transparency of its plans. ]]> <![CDATA[Romania’s gas trap: Fossil fuel expansion threatens clean energy transition]]> Wed, 14 Jan 2026 12:01:09 +0100 Magda Wiejak 155288 2026-01-14 12:01:09 2026-01-14 12:01:09 These opposing policy directions have potential economic and environmental consequences. Increased gas consumption would result in higher energy costs for consumers and a rise in greenhouse gas emissions, while undermining government claims of improved regional energy security. Meanwhile, the expensive gas infrastructure currently being built in Romania with public funds will likely become ‘stranded assets’ in a future power market dominated by renewables. 

Fossil gas remains the weakest link 

The main reason the Romanian government is promoting higher fossil gas consumption is to offset the phase-out of the country’s coal-fired power plants. By 2030, the capacity of combined-cycle gas turbine (CCGT) power plants is expected to increase by at least 3.5 GW (1770 MW at Mintia, 850 MW at Ișalnița, 475 MW at Turceni and 430 MW at Iernut). Although no new capacity has yet been commissioned, some of these projects are already at an advanced stage of construction and could be operational as early as 2027.  In 2020, Romania had close to 4 GW of installed coal capacity. The planned replacement is therefore almost a one-to-one swap, even though the new gas-fired power plants are more efficient and could, in theory, produce the same amount of electricity with almost half the installed capacity. Romania’s strategy does not view renewables as capable of replacing coal facilities. The reality, however, is quite different.  After almost a decade of stagnation between 2014 and 2022 due to cancellation of the domestic Green Certificate scheme, renewables are growing again, albeit at a slow pace. The latest data shows that in 2023 the share of renewable energy reached 25.8% of final consumption, compared to 24.5% in 2020.   While the government is targeting a share of 38.3% by 2030 – corresponding to up to 10 GW of new capacity – this remains below the European Commission’s recommended target of 41%. New capacity, particularly from photovoltaic projects installed in 2024 and 2025, is expected to increase the share of renewables in the coming years, though the rate of growth must accelerate to meet national targets.  Romania’s national energy and climate plan sets a target for renewable power to account for 57.8% of consumption, up from 47.4% in 2023. However, the share of gas in the power sector is also projected to increase, from 20 to 24% by 2030.   Since 2021, when the coal phase-out commenced, coal-based electricity production has declined by 4 percentage points, with wind and solar production increasing by 4.4 percentage points. Gas-fired power generation has remained largely stable, recording only minor variations of 1 to 2 percentage points and no change in installed capacity, with hydropower generation fluctuations dependent on water availability.  The chart below shows that renewables are already replacing coal-fired generation without the need for additional gas capacity. This transition can continue in the coming years, particularly if accompanied by investments in storage and network improvements.   [caption id="attachment_155291" align="alignnone" width="988"] Romania’s power consumption by source between 2010 and 2024 (data source: Transelectrica)[/caption] The national energy and climate plan foresees a 12% decrease in primary energy consumption by 2030 compared to 2020. However, it also projects a 60% increase in electricity usage, from 55 to 80 terrawatt-hours (TWh) per year. By contrast, Transelectrica’s network development plan assumes electricity consumption will rise to only 60 TWh by 2030. Therefore, the plan’s projections do not align with expected electricity demand at the transmission level or with overall energy consumption.  If all the gas-fired plants are built and the targets for increasing renewable energy consumption are met, Romania may face overproduction relative to domestic demand. Theoretically, 3.5 GW of the gas-fired CCGT power plants operating at a 64% capacity factor could produce around 19.6 TWh per year, almost 50% more than the national energy and climate plan’s estimate of 13.5 TWh for all the installed gas capacity.  If Romania achieves its renewable energy targets, gas-fired power plants risk operating below capacity and incurring losses, given that clean sources are likely to assume market priority amid an abundance of renewable electricity. In this case, the new gas-fired power plants would likely need to rely on exports to remain competitive or require state aid to remain operational.  Romania has already invested over EUR 800 million from the EU’s Modernisation Fund in gas infrastructure, which risks becoming stranded assets. As a result, the country may increase its own emissions and use precious public funds to support decarbonisation elsewhere. 

Domestic consumption or export? 

The national energy and climate plan is also askew with projections from Transgaz, the national gas transmission system operator. While the plan foresees a small decline in fossil gas use, Transgaz estimates that consumption could double from 2027 onwards – an increase of over 10 billion cubic metres – under an optimistic scenario in which all gas projects are completed and operate at capacity. Besides electricity, Romania’s gas use in heating is also expanding significantly, with new district heating plants and distribution networks being supported with billions of euros in EU and national funds. Meanwhile, the government is encouraging industry to increase gas consumption, including gas extracted from the Black Sea.   The Neptun Deep perimeter is estimated to produce 8 billion cubic metres per year, which suggests this output alone would not be enough to cover domestic demand. Under these circumstances, Romania would have to import additional gas. Romanian decision makers have promised that Black Sea gas will strengthen regional energy security, with the Commission viewing it as a potential replacement for some of the gas previously supplied by Russia. OMV Petrom has already signed two sales contracts: one with Energocom in Moldova and the other with Uniper in Germany.  Romania evidently cannot double its gas consumption while securing gas resources for neighbouring countries. This raises questions about how Romania intends to honour national and EU commitments and whether it will ultimately become more dependent on gas imports in the future. 

A costly pro-industry transition 

Beyond the dilemma of ‘energy independence’, increased gas consumption would hinder decarbonisation of the energy sector and make the transition more expensive in the medium and long term, while also raising consumer energy bills.  First, additional gas consumption means more greenhouse gas emissions and higher carbon-allowance costs. From 2029, a carbon tax on buildings and transport is expected to come into force, placing extra pressure on households reliant on gas for heating. At an emission factor of 1.9 kilogram of CO2 per cubic metre of gas, doubling gas consumption would result in an estimated additional 19 million tonnes of CO₂ emissions, roughly twice as much as coal-fired power plants produced in 2020.  Second, gas drives up electricity prices because it often determines the marginal price in the power market. The goal should therefore be to reduce electricity generation from gas and decouple power prices from gas costs, rather than expanding gas-fired generation.  From 2035 onwards, hydrogen is set to be used in Romania’s new gas-fired power plants and within the national gas network once domestic gas resources are reduced. However, a market for renewable hydrogen does not yet exist globally and may never emerge despite all the bold claims and ambitious targets. Additionally, renewable hydrogen is likely to be far more expensive than previously estimated, making it unrealistic to expect it will ever compete with gas on price.  The broader costs of the transition must also be considered. Producing renewable hydrogen requires additional renewable energy capacity (currently not in place) as well as dedicated transport and storage infrastructure, on top of the investments already made in gas-fired power plants designed to consume hydrogen. This pathway is also highly energy-inefficient, given only one-third of the renewable energy produced would actually be consumed in gas-fired power plants.  This approach would also incur significant energy losses and require substantially higher investment than a transition to an electrification-based renewable system, which must be developed in any case. More public funds –  impossible to estimate given the scale of investment required – would eventually be allocated to build hydrogen infrastructure and upgrade gas assets for hydrogen use. In practice, the public would end up subsidising the continued profitability of the fossil fuel sector at a much higher cost than a direct transition to sustainable renewables and electrification. 

Swift action required 

From a societal perspective, an energy transition based on fossil fuels is a losing proposition from the outset. High investment and operating costs, particularly in the context of a hydrogen-driven scenario, mean that gas-fired power plants risk failing to recover their costs, requiring repeated public bailouts. There is also a risk that operators will continue to run on gas, undermining the goal of reducing greenhouse gas emissions.  Romania is over-investing in fossil fuel capacity, far exceeding its estimated consumption needs and renewable energy targets. This risks creating a market where production cannot be fully absorbed, leading to low returns on investment and a net loss for society. At the same time, the country’s push to increase consumption through Black Sea gas prevents the government from keeping its promises of regional energy security.  Romania needs a bold and consistent energy strategy that focuses on renewables, electrification, storage, and reduced energy consumption. This represents a significantly cheaper, faster and lower-emission decarbonisation pathway than parallel investments in gas and hydrogen. ]]> <![CDATA[Hungary’s energy transition at risk due to missed EU milestones]]> Mon, 29 Dec 2025 15:28:44 +0100 Dora Crnčević 155260 2025-12-29 15:28:44 2025-12-29 15:28:44 No matter how funds are juggled across recovery, cohesion and domestic programmes to give an impression of progress, the money lost due to delays and non-compliance will leave a serious gap in the national economy, slowing the country’s energy transition.  Recovery and resilience plan under strain  In late 2022, the Commission approved Hungary’s recovery and resilience plan, making disbursement conditional on the government meeting 27 ‘super milestones’ linked to the rule of law. However, implementation has been sluggish and, despite some progress, significant work remains if the government is to convince the Commission it remains on track to deliver the necessary reforms.   At a June 2025 meeting of the Recovery and Resilience Facility monitoring committee – which is tasked with overseeing implementation of the recovery and resilience plan – the government reported most measures under the plan were still being implemented, while also indicating the need for potential modifications of measures that have yet to be launched, creating uncertainty over whether they will indeed proceed.  In October, the government’s draft proposal outlining amendments to the plan was circulated among the monitoring committee for comment and made available for public consultation on the government’s website. Yet the proposed changes indicate that – even if Hungary were to meet all 27 ‘super milestones’ and immediately become eligible for funding under the Recovery and Resilience Facility – it would still be impossible to accomplish a considerable number of the planned reforms and investments by the August 2026 deadline.  Cohesion policy funds on the brink   In April 2022, the Commission formally notified Hungary it had triggered the conditionality mechanism under the Rule of Law Conditionality Regulation.  In December 2022, following lengthy but largely unproductive negotiations with the government, the Council of the European Union decided to suspend 55% of the budgets for Hungary’s three largest cohesion policy operational programmes – Environment and Energy Efficiency (KEHOP Plusz), Integrated Transport Development (IKOP Plusz), and Territorial and Settlement Development (TOP Plusz) – totalling approximately EUR 6.3 billion.  By late 2024, EUR 1 billion had already been lost permanently. Unless conditions are met, another EUR 1 billion risks being squandered by the end of 2025.  Uneven cuts to energy efficiency  The modification proposal cuts the recovery and resilience plan’s total budget of around EUR 10.4 billion by 33%. These reductions would not be spread evenly across the plan. Almost the entire budget would be slashed for the components on water management, sustainable transport, the transition to a circular economy, and the plan’s REPowerEU chapter. Additionally, the green energy transition component would lose around 41% of its budget.  Within the energy component, the cuts mainly affect smart grid development, residential photovoltaic systems, and energy efficiency investments in public buildings. While the first two areas have already been partly implemented and could, to some extent, continue on a commercial basis, energy efficiency upgrades have long suffered from chronic underfunding. Under the modification proposal, funding for this purpose would be reduced by HUF 103.48 billion (roughly EUR 265 million), including the withdrawal of planned allocations from both the energy and REPowerEU components.   Households are the most neglected aspect of Hungary’s energy transition, particularly those affected by energy poverty. The Home Renovation Programme – designed to improve residential energy efficiency and alleviate energy poverty, originally included in the REPowerEU chapter with a budget of around EUR 577 million – has so far been implemented to just 12%.  However, should Hungary ultimately lose all access to Recovery and Resilience Facility funding, the costs of the Home Renovation Program are expected to be covered instead by the Environment and Energy Efficiency operational programme, leave it with less funding available for other priorities. If that happens, more than EUR 500 million earmarked for household energy efficiency under the Recovery and Resilience Facility would effectively be lost for good.  Alternative funding options fall short  Allocations had been made to improve the energy performance of various building types under both the recovery and resilience plan and the Environment and Energy Efficiency operational programme, with added potential to support such investments, such as hospital refurbishments, through the Modernisation Fund.  However, the funds lost due to non-compliance with the conditionality mechanism have created a major gap in the energy transition budget that will be hard to fill. The Modernisation Fund alone cannot be expected to replace all of the lost schemes.  Though several domestic programmes, including Otthon Start and the Family Home Creation Discount (CSOK), have been launched with support from the state budget, these programmes do not specifically target energy efficiency renovations and are therefore unsuitable for filling the gap.  Other schemes, including the Energy Efficiency Obligation Scheme (EKR) and programmes focused on energy efficiency renovations, such as the Home Renovation Program, are mostly market-based or require starting capital in the form of initial personal financing. As a result, they primarily benefit middle-to-upper income households and remain out of reach for lower-income households. Specific schemes tailored to the needs of the most vulnerable are badly needed, yet none appear to be on the horizon.  Unfortunately, planning under the national social climate plan – a potential long-term tool to support energy-poor households affected by the energy transition – seems to have stalled after some initial progress in 2024 and early 2025.  Saving money at the expense of transparency  Around 75% of the original components of the recovery and resilience plan have been cut to free up funds for two newly established components: InvestEU and a capital injection to the Hungarian Development Bank (MFB). The MFB injection is intended to support investments in economic development, a competitive workforce, the green economy, and affordable social housing.   However, there are serious transparency and oversight concerns over the planned investments, as the policies guiding them will not be monitored or approved by the Recovery and Resilience Facility monitoring committee. Instead, oversight will be designated to separate ‘professional committees’ whose composition is not controlled by the monitoring committee.  At a meeting of the Recovery and Resilience Facility monitoring committee held on 2 December 2025, several members representing non-governmental organisations voiced these concerns, emphasising the need for timely and adequate follow-up information on the new components, which the government and Commission are still negotiating.  While these oversight concerns are significant, the more fundamental and urgent problem remains: numerous measures previously planned for a resilient, socially just and climate-neutral economic transition – designed through public and expert consultations – will face significant budget cuts or outright cancellation. This threatens to derail the energy transition that the MFB injection seeks to support.  The Hungarian public, as well as the country’s affected sectors and industries, have long awaited these measures, carefully preparing for a predictable regulatory and financing environment as a precondition for ambitious decarbonisation investments. The future of EU public financing for Hungary’s energy transition hangs in the balance.]]> <![CDATA[Kambarata hydropower project: greater scrutiny from international banks is needed ]]> Fri, 19 Dec 2025 14:34:03 +0100 Magda Wiejak 155245 2025-12-19 14:34:03 2025-12-19 14:34:03 However, recent public consultations on the project's Environmental and Social Impact Assessment (ESIA) have revealed critical, unaddressed risks. The project is being presented as a national priority, but its current plan fails to adequately address serious seismic, social and environmental dangers.   Kambarata HPP-1 is projected to have an average production of 5.6 TWh of electricity annually. Kyrgyzstan has a 34 per cent share of the project while Uzbekistan and Kazakhstan have 33 per cent each. To complete the project, around EUR 4-6 billion will be required. The EBRD is considering lending EUR 1.3 billion to support the project and the EIB another EUR 900 million.   Experts from ‘Rivers without Boundaries’ made a detailed Cumulative Impact Assessment where they concluded that the project would result in unmitigated transboundary hydrological risks and would violate biodiversity safeguards. They’ve concluded that the project suffers from a severe deficit of good governance and public accountability and that the project will adversely affect thousands of locals in nine nearby villages.   These risks and challenges were discussed during the second round of national consultations over the ESIA for the project, which was organised by the Ministry of Energy of the Kyrgyz Republic in Bishkek on 16 October 2025. Around 100 people – including locals, experts and NGO representatives – attended the meetings, and around 30 participated online. The social concerns from local communities, who are dependent on cattle breeding, were mainly about the loss of their ability to continue this work if construction starts. They also expressed a need for the project to hire more locals. The ESIA claims ‘only three households’ will be physically displaced. But it also indicates the reservoir will flood over 3,500 hectares of irreplaceable winter pasture land, threatening the livelihoods of over 1,000 households that depend on cattle breeding. Experts from ‘Rivers without Boundaries’ highlight that in the Cumulative Impact Assessment  (CIA) 50 km²  of ‘natural grasslands’ are currently left without biodiversity mitigation. Though the project’s management claims that the ‘aquatic river habitat’ and associated lands are not technically ‘lost’ but are simply being ‘converted into reservoir habitat’ and therefore do not require mitigation, experts from ‘Rivers without Boundaries’ call this a ‘blatant violation’ of the World Bank's ‘no net loss’ requirements.   The project will result in the destruction of over 80 kilometres of trails and 11 bridges, thereby severing access to remaining pastures. Authorities have announced plans to build an additional bridge and new roads for shepherds as well as to employ locals in the construction works, but locals did not seem convinced that these plans will actually happen. The ESIA states that construction is expected to create 600 to 3,000 new jobs  and that during the peak construction phase there will be about 7,000 workers onsite. The construction timeframe is estimated at 8.5 years.   Another important concern comes from the Kyrgyz Republic's National Academy of Sciences which has issued a serious warning. An active seismic fault is located directly under the proposed dam site. The institute insists that crucial seismic micro-zoning is necessary, but its experts report their warnings have been ignored by project consultants.  Meanwhile, ecology experts from ‘Rivers without Boundaries’ have labeled the ESIA's biodiversity section a ‘black box’. It lacks specific data about the project’s impact on the various potentially affected species. Most alarmingly, the ESIA proposes to determine if the area is a ‘critical habitat’ only after a decision has been made to implement the project.    ‘Rivers without Boundaries’ believe that this is a fundamental breach of international best practices, which require such assessments to be made prior to an implementation decision in order to determine if a project should be radically revised or abandoned. They state: ‘The ESIA does not provide a complete picture of the consequences of the hydropower plant construction for the most valuable natural aquatic habitats of the Naryn River. Consequently, the project has no mitigation plans to protect or restore habitat to compensate for degradation of a long stretch of natural river or 50 square kilometers of grasslands, and therefore fails to ensure that there is no net loss of biodiversity as required by the World Bank standards. Instead of habitat protection the largest budget item in the biodiversity management plan is devoted to building a fish farm for artificial breeding of native catfish and invasive trout’.   In addition, the most well known impacts of the new dam are expected to occur in Uzbekistan, Tajikistan and Kazakhstan downstream of the Naryn Hydropower Cascade and reinforced by the new large Kambarata–1 reservoir.    The Cumulative Impact Assessment attached to the ESIA explains that seasonal redistribution of flows may affect the whole Syrdarya River down to the Lesser Aral, degrade three Ramsar wetlands and affect irrigation systems important for millions of people. Specific impacts will depend on the flow management regime of the Toktogul and Kambarata-1 reservoirs, but this regime has not yet been agreed upon or designed. ‘Rivers without Boundaries’ also criticizes the ESIA for the absence of a sufficient environmental plan. ‘[The] CIA vaguely recommends designing such transboundary environmental flow management plan as the top priority. However, the whole ESIA does not include such a plan, or any further solid mitigation measures to avoid those negative impacts downstream, while its “environmental flow assessment” does not cover transboundary impacts and cascade regulation effects’.

What should potential financiers do now?  

Given these challenges, the World Bank, EBRD, EIB, Asian Development Bank and other potential financiers have a responsibility to stop overly relying on the developer's ESIA. Before committing any funds, these institutions must conduct a rigorous gap assessment and ensure the ESIA process is sufficiently comprehensive and participatory to effectively assess all risks and impacts. These steps are vital to ensure the project aligns with their own policies and to avoid financing a social, environmental and economic disaster.   International financial institutions must acknowledge the political climate. In these countries civil society organisations face reprisals and independent media is banned. Given this environment, international lenders must assess the risks and introduce mitigation measures to ensure transparency and meaningful stakeholder engagement. The international financial institutions must require the government to demonstrate cooperation with local activists and experts and to not threaten the activists. An independent, secure and anonymous grievance mechanism to protect stakeholder voices should be established to address these challenges.    It is important for the banks to demand a realistic livelihood restoration plan. This should focus on the thousands of locals who are losing their pasture-based incomes. It must also provide specific, verifiable and fully-funded strategies for replacing lost winter pastures and access routes.      All action points regarding offsets, transboundary monitoring and public safety must not merely be ‘recommendations’ in a plan but must be included as legally binding requirements in the Environmental and Social Action Plan (ESAP) linked to the loan agreement.   The financiers should ensure that impact on all natural habitats degraded or modified by the hydropower project are dealt with in strict accordance with mitigation hierarchy and that ‘no net loss’ of biodiversity is truly achieved (e.g. by permanent protection of other similar rivers, where additional dams are now planned).    Before the financing decision is made, potential critical habitats should be explored both upstream from the Kambarata-1 dam and downstream of the Naryn Cascade where the CIA highlights at least three wetlands of international importance dependent on the downstream water regime.    To prevent conflict and environmental degradation, financial institutions must assert control over the project's operational framework. They must mandate that the transboundary environmental flow regime downstream of the Naryn Cascade be designed during ESIA finalisation, not afterwards. This regime must be agreed upon and operationalised in binding reservoir cascade management rules, subject to full consultation with local communities in the three downstream countries. Without these binding guarantees, the lenders cannot claim to have mitigated the project's transboundary risks.   International banks now have a choice, either enforce their own standards to mitigate these risks or become complicit in funding a project with flawed foundations.  ]]>