Albania: Enso Albania-02/Mat

Date Filed
20 Mar 2019
Status
Closed
Phase
Compliance
Country
Albania

Case Tracker

Eligibility
Eligibility
Assessment
Assessment
Dispute Resolution
Compliance
Appraisal
Closed
CURRENT Status
Appraisal (COMPLIANCE)
Closed

Complaint Overview

Complainant

Community members from various villages surrounding the town of Klos, in the province of Mat, Albania

Concerns

Water shortage and impact on agricultural activity, rural development, and tourism.

Cross-Cutting Issues
Risk Management Resource Efficiency Community Health and Safety Land Resettlement Land Water

Project Information

Region
Europe & Central Asia
Institution
IFC
Name & Number
Enso Albania 30979
Company
Enso Hydro Energji Sh Pk
Sector
Infrastructure
Department
Infrastructure
Category
B
Commitment

$8.66 million equity

Synopsis

Project Overview

IFC has a $8.6 million equity investment in a holding company in Albania established by Enso Hydro, an Austrian company specializing in investments in small and medium-scale hydropower plants. One of the hydro projects Enso has invested in is the Mati hydropower plant, a concession for a cascade of 5 small hydro projects with a total installed capacity of 29.8MW, in the downstream area of Mati river basin in the Mat region, Albania.

Complaint

On March 20, 2019, a complaint was submitted to CAO by an individual on behalf of community members from various villages surrounding the town of Klos, in the province of Mat, Albania. The complaint raises environmental and social concerns mainly related to water shortage and impact on agricultural activity, rural development, and tourism.

CAO Action

CAO found the complaint eligible for further assessment on May 1, 2019. During the assessment, there was a lack of consensus amongst the parties to engage in a CAO dispute resolution process. Given that CAO dispute resolution is voluntary, the complaint was referred to CAO’s Compliance function for appraisal in accordance with CAO’s Operational Guidelines.

In February 2020, CAO released its compliance appraisal report. CAO concluded that IFC’s approach to the review and supervision of the Mati HPP project in relation to the issues raised in the complaint does not meet the threshold of raising substantial concerns regarding Environmental & Social (E&S) outcomes and/or issues of systemic importance to IFC that would warrant a compliance investigation at this stage. In reaching this conclusion, CAO considered the depth of IFC’s pre-investment E&S review of the project, whether it adequately considered client commitment and capacity to meet IFC’s Performance Standards, and IFC’s supervision of the client’s actions in relation to the Mati HPP given it was still at the concept development stage. Further, the client does not have in place the studies needed to proceed with the project and to raise financing to move the project forward. The uncertainty as to the likelihood of the Mati project to be developed and constructed also contributed to this decision. Hence, CAO has decided to close this case.

Should the project proceed toward construction in the future, the E&S framework for the investment would require the client to produce an Environmental and Social Impact Assessment (ESIA) in accordance with IFC standards. CAO’s decision to close this case at appraisal does not preclude the complainants from filing a new complaint should their concerns not be adequately addressed through a future ESIA.

Status

The case was closed in February 2020 after compliance appraisal.

Status as of February 10, 2020

Case Documents

  • Dispute Resolution

    Complaint
    Enso Albania- 02- Redacted Complaint
    Mar 01, 2019
    English
    Enso Albania- 02- Redacted Complaint
    Assessment Report(s)
    Assessment Report - Enso Albania- 02
    Oct 09, 2019
    English
    Assessment Report - Enso Albania- 02
    Assessment Report - Enso Albania- 02
    Oct 09, 2019
    Albanian
    Assessment Report - Enso Albania- 02
    IFC Formal Response
    Oct 02, 2019
    English
    IFC Formal Response
  • Appraisal Report(s)
    CAO Compliance Appraisal
    Jan 30, 2020
    English
    CAO Compliance Appraisal