CAO Cases

Arne Hoel, The World Bank

Europe & Central Asia

Albania / Enso Albania-01/Lengarica

Complainant
Local residents of Lengarica
Date Filed
June 22, 2015
Concerns
Biodiversity and critical habitats, ecotourism livelihood, IFC due diligence, national law
Case Status
Open - Compliance
 

Synopsis

Overview

IFC has a US$8.6 million equity investment with Enso Hydro, an Austrian company specializing in investments in small and medium-scale hydropower plants in South East Europe, Turkey, Alpine Regions, and Scandinavia. One 8.9 Megawatt (MW) hydropower plant on the river Lengarica in Albania has already been identified and the concession has been signed. The project is classified as a Category B.

 

In June 2015, a complaint was lodged with CAO by two local residents with the support of the Organic Agriculture Association. The complainants raise issues regarding the impacts of the Lengarica project, alleging that project construction is having negative impacts on biodiversity, critical habitats, and ecotourism livelihoods, among other broader concerns related to project due diligence.  

 

 

CAO Action

The complaint was found eligible for assessment in July 2015 and an assessment trip was conducted in September 2015. During the assessment, the parties agreed to engage in a CAO facilitated Dispute Resolution process to try to resolve the issues raised in the complaint. A CAO Assessment Report was subsequently released December 2015.  At the time the complaint was lodged with CAO, the power plant was not commercially operational. Given that the power plant became operational subsequent to the complainants’ decision to commence a dispute resolution process but prior to the commencement of that process, the complainants determined that they were unwilling to meet with the company. This decision ended the CAO dispute resolution process. CAO released the Dispute Resolution Conclusion Report in February 2016.  In accordance with CAO’s Operational Guidelines, the case was transferred to CAO Compliance for appraisal of IFC’s/MIGA’s performance with regard to the project.  

 

CAO released a compliance appraisal report in May 2016. CAO concluded that the complaint raises substantial issues related to IFC’s appraisal and supervision of the environmental and social impacts of the project. These include questions as to:

a. Whether IFC’s pre-investment E&S review of the project, in particular its potential impact on biodiversity and ecosystem services was commensurate to risk;

b. Whether IFC ensured proper application of Performance Standard 6 to the project, in particular given the project’s location in a national park and the presence of rare and/or endangered species in the area; and

c. Whether IFC ensured proper application of its consultation and disclosure requirements to the project.

As a result, CAO has determined that a compliance investigation is warranted.

In June 2016, CAO has published Terms of Reference (ToR) for this compliance investigation. A field visit was completed in November 2016.

 

 

Status

CAO has finalized its compliance investigation report. On June 25, 2018, CAO submitted the final report to IFC senior management for official response. IFC has 20 working days to submit a written response to CAO. CAO will then forward the investigation report and the IFC response to the World Bank Group President for clearance.

 

All documents pertaining to this case, including CAO's compliance appraisal report and ToR for compliance investigation, can be found via the "View Documents" link below.

 

 

Status as of June 25, 2018

Project information

Institution
IFC
Project Name & Number
Enso Albania 30979
Department
Infrastructure
Company
Enso Hydro Energji Sh Pk
Sector
Renewable Energy
Region
Europe & Central Asia
Country
Albania
Environmental Category
B
Commitment
$8.66 million equity

Case Tracker

Ombudsman

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

Compliance

  • Under Appraisal: Completed
  • Under Audit: In Process