CAO Cases

Arne Hoel, The World Bank

Europe & Central Asia

Albania / Kurum Hydro-01/Bradashesh

Complainant
Local residents of Bradashesh
Date Filed
May 19, 2015
Concerns
Air pollution
Case Status
Open - Compliance
 

Synopsis

Complaint

IFC has one active project with Kurum International (“Kurum”) in Albania, a steel producing company that successfully bid for 4 hydroelectric power plants (HEPPs) – Uleza, Shkopeti, Bistrica I, and Bistrica II –  that were privatized by the Albanian government. According to IFC, the investment will be to finance (i) the acquisition of the HEPPs; and (ii) the estimated EUR 10 million rehabilitation investment of these power plants. Through this Project, Kurum contemplates reducing its electricity purchase costs, and to secure reliable electricity sourcing in order to continue its operations without major disruptions. The project is classed as a Category B. 

 

In June 2015, a complaint was lodged with CAO by several local residents who live in close proximity to Kurum’s steel plant. The complainants raise concerns about air pollution produced by the plant operations.
  

  

CAO Action

On the basis that energy generated from the HEPPs will potentially power the steel plants, the complaint was deemed eligible for further assessment in July 2015 and an assessment trip conducted in September 2015. During the CAO assessment the parties agreed to engage in a CAO facilitated dispute resolution process. In December 2015, the complainants and the company agreed to a set of ground rules to guide the process. The Assessment Report and Ground Rules/Framework Agreement can be found via the “View Documents” link below.

 

The parties agreed to address the major issues raised in the complaint, which they categorized as (i) air quality issues; (ii) noise issues; (iii) social issues concerning perceived lack of investment by Kurum in community development.  As part of the dispute resolution process, Kurum committed to a number of investments to improve air quality and noise levels, and parties agreed to a participatory environmental monitoring activity to include community members in monthly monitoring activities within Kurum’s operational site, conducted by an environmental monitoring agency accredited by the Albanian government.

 

Following the participatory monitoring exercise, community members indicated an interest in working with the company to develop a joint fact-finding process, led by an international monitoring agency or expert, to improve transparency in the design and implementation of the monitoring process to look at questions related to the company’s alleged environmental impacts in the industrial area. Kurum indicated that the current monitoring process was being conducted by an accredited environmental monitoring agency, who were producing quarterly reports delivered to the respective Albanian institutions. At a final joint meeting in February 2018, Kurum committed to provide feedback to CAO regarding the possibility of a joint fact-finding process.

 

Absent feedback from Kurum on their position since February 2018, or an agreement to enter a joint fact-finding process, CAO concluded the dispute resolution process.  Per CAO’s Operational Guidelines for complaints that are not amenable to, or cannot be resolved through, dispute resolution, the case has been transferred to CAO Compliance for appraisal of IFC’s performance related to the project. 

 

Status

 
In accordance with CAO’s Operational Guidelines, the case has been transferred to CAO Compliance for an appraisal of IFC’s environmental and social due diligence.

 


Status as of July 26, 2018

Project information

Institution
IFC
Project Name & Number
Kurum Hydro 33378
Department
Infrastructure
Company
Kurum International
Sector
Power
Region
Europe & Central Asia
Country
Albania
Environmental Category
B
Commitment
$44.91 million A Loan

Case Tracker

Ombudsman

  • Eligible: Completed
  • Assessment Period: Completed
  • Facilitating Settlement: Transferred

Compliance

  • Under Appraisal: In Process