EPS Kolubara Environmental Improvement

Translated version of this PSD: Serbian

Project Description

The EBRD is considering funding a project to finance the purchase of

(1) a coal excavator, conveyor and spreader system for Field C of the Kolubara mining basin,
(2) a spreader system for the Tamnava West field and
(3) a coal management system for the whole of the Kolubara mining operations. The equipment, planned to be purchased if the project gets approval from the EBRD’s Board of Directors, will improve the efficiency of EPS' mining operations at the Kolubara basin and significantly improve the quality and uniformity of the lignite it delivers to its power stations.

Transition Impact

It is expected the planned project will contribute to having the following transition impact:

• Institutions and policies that support markets – new private investors in the Serbian power sector. The Serbian generation sector remains state-dominated – the proposed IPPs are critical in introducing significant new private investment and paving the way towards a more diverse sector. The Project is an essential enabling condition for the success of these IPPs.
• Setting standards for business conduct – EHSS standards. The Project will result in improvements in efficiency and emission reductions at the Nikola Tesla power plants from more uniform lignite quality. It will also result in environmental improvements at the Kolubara mining basin. The Bank will engage with EPS to ensure these benefits are realised and through the Project ESAP it will ensure that the Project, in particular any resettlement, is implemented in accordance with EU standards.
• Restructuring and commercialisation. The project also supports the ongoing commercialisation of EPS as it will introduce modern equipment and techniques to EPS' mining operations and promote greater economic and environmental efficiency in its generation activities.

The Client

Elektroprivreda Srbije, (EPS), the vertically integrated electricity company of Serbia, owned 100 per cent by the Government of the Republic of Serbia..

EBRD Finance

The EBRD is considering providing up to €80 million in a sovereign guaranteed loan to EPS along with a parallel loan of €60 million to be provided by KfW.

Project Cost

€165.2 million.

Environmental Impact

The project was categorised A under EBRD’s Environmental and Social Policy. EBRD engaged environmental consultants to review the EIAs for this project and assist EPS in preparing a Non-Technical Summary, an Environmental and Social Action Plan and a Stakeholder Engagement Plan. These documents were publicly disclosed, locally and on the internet in both Serbian and English.

The Project is designed to generate the following main benefits:

• RB Kolubara will extract its natural resources more efficiently and cleanly
   
• RB Kolubara will supply lignite to its existing client power plants that is of a uniform quality. This will allow those plants to generate in accordance with their design parameters, leading to more stable and efficient operation and controlled uniform emissions. It will also allow those plants to stop using heavy fuel oil when lignite quality is too low. Taken together this will result in lower levels of CO2 and other emissions as well as reduced wear and tear and maintenance costs.
   
• These benefits will contribute to the reduction of air emissions associated with coal extraction, help achieve national air emissions targets including CO2, and assist the operators of the power plant in achieving increasingly stringent emission limits set by the recently introduced EU Directive 2010/75 on Industrial Emissions (integrated pollution prevention and control).

Environmental Impact Assessments have been undertaken for both the Field C and Tamnava West sites in line with national and EU legislative requirements.

Land acquisition and resettlement was substantially completed in 2008 in line with EBRD policy and Serbian legal requirements. An ESAP was agreed with EPS and RB Kolubara. The main measures required by the ESAP are:

• Inception Plans for both mine sites that will describe the detailed mitigation and monitoring measures needed, based on the requirements identified in the EIAs for Field C and Tamnava West, and will set out a programme detailing when and how the measures will be implemented to achieve the requirements.
   
• A waste management plan will detail how the requirements of the EU Waste Directive will be met and a strategy for land restoration will be prepared.
   
• The Stakeholder Engagement Plan (SEP) will be implemented.
   
• RB Kolubara will develop and implement a Human Resources policy.
   
• A number of measures are to be taken to strengthen health and safety, and to align it with international best practice.

The ESAP was updated in March 2012 to reflect progress made by EPS and to align the timetable with the project implementation schedule.

There is an Environmental and Social Impact Assessment available for this project.

Corporate Environmental Impacts

EPS and the Kolubara mining basin have extensive ongoing operations that are beyond the scope of this project. Information on these operations, their environmental and social impacts, and the future plans of the company is available from the following sources:

• The Green Book of the Electric Power Industry of Serbia (2009) provides an overview of environmental and social aspects and associated investment plans for EPS’s thermal generation and mining operations.
   
• The White Book of the Electric Power Industry of Serbia presents options for increasing the use of renewable energy sources and for improving the efficiency of the electricity sector in Serbia.
   
• Impact Assessment of the Kolubara Mining Basin (IEA for OCM Field C and OCM Tamnava West Field) ( http://www.eps.rs/Eng/Article.aspx?lista=Sitemap&id=37  )

The Green Book and White Book are available in Serbian (www.eps.rs/Pages/Article.aspx?lista=Sitemap&id=34) and English (www.eps.rs/Eng/Article.aspx?lista=Sitemap&id=10).

Environmental protection reports (measurements and periodic i.e. annual and semi-annual Reports on the environment condition in the Kolubara branch and EPS from which majority is translated into English) are available and can be found on the official websites of the Branch MB Kolubara and PE EPS (http://rbkolubara.rs/index.php?option=com_content&view=article&id=96&Itemid=202&lang=en,  http://www.eps.rs/Pages/Article.aspx?lista=Sitemap&id=34).

On these site addresses can be found other projects and studies of relevance to the general public.

• Strategic Environmental Impact Assessment of the Spatial Plan of Kolubara Mining Basin

Greenhouse Gas Emissions

Total GHG emissions from EPS’ thermal power plants was 23.25 million tonnes of CO₂ in 2014. Of this amount, the thermal power plants adjacent to the Kolubara basin contributed around 18,4 million tonnes of CO₂, with TENT A emitting 9.0 million tonnes, TENT B emitting 8.1 million tonnes, Kolubara A 0.7 million tonnes and Morava 0.6 million tonnes.

Kolubara Community Issues

During the appraisal of this project in 2011, EBRD received several complaints from Civil Society Organisations relating to land acquisition and resettlement in the Kolubara Basin. As a result, EBRD engaged Serbian independent social consultants to investigate these complaints, review documentation and make recommendations to address any findings.

A consultation meeting was held in the village of Vreoci on 24 August 2011, attended by community and CSO representatives from Vreoci, Barosevac and Veliki Crljeni and by staff from MB Kolubara, EBRD and the consultants. This was followed by site visits in Vreoci and Barosevac. Issues raised by the CSOs related to the schedule of resettlement, concerns about pollution and unhappiness about the need to relocate  graves from the Vreoci cemetery to a new location.

The consultants concluded that ‘It is difficult to determine whether the representatives who submitted complaints … actually represent the residents in the affected communities or their own personal interests’ and that ‘It is clear that communication between EPS/MB Kolubara and affected communities on certain issues needs to be improved through the organisation of meaningful consultations’. With regard to the relocation of graves, the consultants found that ‘From the facts established during the field visit and through a review of available documents, it appears that EPS/MB Kolubara is implementing exhumation and relocation of remains in accordance with the relevant laws and regulations’. The consultants made several recommendations to improve communication and address other issues raised by the community. The consultant’s report was provided to EPS and to the meeting participants.

EPS is continuing to work on communication with the local communities, and EBRD is working with EPS to build their capacity in this area.

Technical Cooperation

None.

Related material