Aug. 30, 2008
European Bank for Reconstruction and Development (EBRD) staff, meeting in Kyiv in May, ruled out financing for the controversial Kaniv pumped storage plant (PSP).
"Kaniv PSP has been removed from the list of projects included in the cooperation programme recently agreed with the [Ukrainian] government," the EBRD communicated to Bankwatch. "There are other projects which the government needs to address more urgently with IFI financing."
The decision is yet another hit for the Energy Strategy of Ukraine up to 2030: the World Bank declined earlier this year the opportunity to finance the Dniester PDP, a similar project.
The National Ecological Centre of Ukraine (NECU) was instrumental over the past year and a half in pointing out to the EBRD the alleged social and environmental hazards that the Kaniv PSP entails. Rising cost estimates were another factor in the decision; the EBRD was approached for a loan of approximately 25 percent of a project that could carry a price tag of up to EUR 1 billion.
According to a 2007 NECU study, villages and farmland near the construction site would be susceptible to flooding; and groundwater levels could shift, resulting in a shortage of drinking water. The group also determined that the construction plan lacked countermeasures to offset potential problems.
