Overview of EIB's Environmental and Social Project Appraisal ...

European Investment Bank – Sustainable Development Unit Presentation at EIB-CSO Spring Workshop Paris, 24 May 2007

Overview of EIB’sEnvironmental and Social

Project Appraisal Guidelines


Background

The environmental and social project appraisal guidelines are subject to continuous update and review. The guidelines were updated in 2006 with new chapters on Climate Change, Biodiversity and Social Assessment.The procedures follows the Project Cycle in the EIB, structured according to the steps in the project cycle, pre-appraisal, consultation with European Commission, appraisal (incl. EIA/SEA), monitoring and evaluationThe guidelines describes the internal processes and practices of EIB, to ensure that all financing activities are consistent with its environmental and social policy.


Basis for Environmental Policy

EU’s 6th Env Action Programme and the Bank’s Environmental Eligibility Criteria) 2001-2010, four priority areas:

Climate ChangeNature and BiodiversityEnvironment and HealthSustainable use of Natural Resources and management of Waste

As well as the thematic strategy on Urban Environment under 6thEAP

Environmental Statement 2004, new E & S Policy, Principles and Standards, public consultation in 2007Applying general EU environmental principles and standards but also guided by good international practice, such as WCD and EITIMain Directives: EIA/SEA/UWWD/LCP/WFD/IPPC


Project Cycle, the enviro & soc appr

Project cycle Paper trail Environmental issues

Environmental

screening

Env. eligibility

Upstream

Identification

NIP

COP Business plan

EIA (s) EA

EnviroSummary

Sheet (ESS)

Enviro Rating

PreAppraisal

FSA

Appraisal FSB

Opinion for

Appraisal (OA)

Appraisal report

Environmental

covenants

(loan conditions)

Approval CA

Loan negotiation

Contract

Environmental

indicators

Implementation

Operation

Progress reports

Completion

Completion

report


What happens in the pre-appraisal? (1)

The project appraisal team:Identifies the loan type and hence the focus and target of the Environmental and Social AssessmentEstablishes whether an SEA is needed and ensures that the promoter is fully aware of its obligations in this regardEstablishes whether an EIA is needed and ensures that the promoter is fully aware of its obligations in this regardEnsures that the biodiversity assessment in accordance with the Habitats 92/43/EEC and Bird Directives 79/409/EEC has been carried out either as part of an EIA or separately


What happens in the pre-appraisal? (2)

The project appraisal team:Ensures that social aspects of the project have been integrated into the assessment of projects, as judged necessary by the Bank (compulsory for all individual loans outside Europe, in Candidate and Potential Candidate countries on a selective basis)Record the findings in Opinion for Appraisal (OA), identifying main issues and risks including environment and social issues, this should then lead to specific questions on environmental and social matters in the questionnaire sent to the PromoterThe OA is sent to the management committee who will authorise to proceed with a appraisal (no commitments on financing yet done)


What happens in the pre-appraisal? (3) The EIB pre-appraisal is followed by consultation with the

European Commission (according to Article 21 in EIB Statute):A Note is sent to European Commission where the Bank confirms on the basis of the Bank’s prior environmental assessment, that the project “complies with EU policy and legislation in the field of the environment” or indicate that such a confirmation will be given at the time the project is submitted to the EIB Board of DirectorsReference should be made to the EU EIA Directive, stating whether the project falls within Annex I or Annex II. Particular reference should be made when projects have, in addition, to comply with the EU Habitats Direct 92/43/EEC and the EU Birds Directive 79/409/EEC.


What happens in the appraisal? (1)

The project appraisal team should (in addition to tasks carried out during pre-appraisal):Examine both environmental/social substance and environmental/social legal/procedural compliance.Where an EIA is required, confirm that the main stages of the EIA are complete and documented (screening, scoping, studies, public consultation, planning consent/authorisation, and public informed of decision). Review the environmental substance of the project using EIA documents or where an EIA is not required, or is not yet completed, whatever sources of information are available, including appropriate site visits, if practicable.



In EU, ensure the biodiversity assessment in accordance with the Habitats 92/43/EEC and Bird Directives 79/409/EEC has been carried out either as part of an EIA or separately and Forms A/B (developed by DG ENV, MoU between EIB and EC) filled out for projects located in the EU Member States and accepted by the relevant Competent Authority. Outside EU, ensures that an appropriate biodiversity assessment has been made where necessary to identify and mitigate the impacts on nature conservation. In both instances, clarify what, if any, protected areas are nearby or may be affected by the project



Ensure that social aspects of the project have been integrated into the assessment of project (separate presentation)Determines what if any issues have been or are being raised by Stakeholders and how these are being dealt with in the project design, implementation and operationReviews the environmental management plan (EMP), if one is considered necessary, and assesses the environmental experience and competence of the promoter to implement and operate the project, including the mitigation measures for environmental and social impacts



CC: Determines whether overall project will result in an increase or reduction of green house gas emissions, identifies any specific effects on, or risks to, the project from predicted climate change impacts. Where appropriate, follows up any climate change financing options that were identified at OA stageMonitoring: Where required, determines what physical environmental monitoring for both implementation and operation needs to be/will be carried out and by whom.Reporting: Determine what information, reports and visits will be necessary for the EIB to monitor the environmental aspects of the project implementation and/or operation



A Project Appraisal will be produced, summarising:Environmental situation with/without the project (quantify and value, to extent possible).Compliance of the project with EU principles, practices and law, with particular reference to the SEA and/or EIA DirectiveSignificant climate change or biodiversity Issues including compliance with the Habitats Directive.Screening category for EIA - indicate any particular environmental assessment issue.Environmental Impact(s) (both negative and positive); if appropriate, proposed mitigation/compensation measures (including cost, if known).



Where a Social Assessment is deemed necessary, any significant social issues and their proposed treatment should be included in Project Appraisal (separate presentation


Public Disclosure of Env Docs

For all individual projects the Non-Technical SummaryNTS) of the EIA study (EIS) must be made public30-day rule on NTS for projects outside EU-27, Candidate and Potential Candidate Countries (rulebeing currently reviewed). The assumption is that in EU the NTS are public in accordance to the EU EIA Dir.For all individual projects outside EU-27, the EIS must be made publicNTS and EIS made available either by providingdocuments or providing links to documentsAll projects proposed to be financed by EIB are published on the Bank’s website under « Project List ».


EIA Categories for Investment Loans

Category Comments

A Full EIA Annex I projects

B Full EIA Annex II projects, screened in

C EA Annex II projects, screened out

D EA All other projects


Biodiversity

Objective: Identify potential impacts on sites protected for nature conservation reasonsMitigate negative impactsEnhance positive impacts, whenever possibleSeparate nature assessment required for all projects with significant impact (Natura 2000 sites in EU, Ramsar-classified sites, national protected sites, etc)In the EU-27, Form A for projects without significant impact and Form B for projects with significant effect on sites of nature conservation importance, to be signed by the competent authorityOutside EU-27, same approach, with a similar declaration from the competent authority


Corporate Operational Plan 2007-2009

Environmental lending shall be 20-25% of the total lending in EU27 (20% corresponds to EUR10.2 billion)Environmental lending outside EU27 shall be 20 % of individual loans outside EU27Making all EIB climate change inititiatives fully operational, in particular developing projects that reduce GHG emissions related to the EU Emissions Trading SchemeIncrease the share of renewable energy in total new electricity generation capacity up to 50 % by 2010 and reach an annual sub-target of EUR 600-800 millionContribute to the environmental objectives of the EIB’s work, notably in the area of Urban Environment – Sustainable Cities within the new JESSICA initiative


E & S Issues During Project Cycle

Eligibility: environmental reasons to finance, if environmental project

Preliminary reaction: environmental & social issues addressed early

Pre-appraisal: gathering information, Article 21 process launched

Appraisal: environmental & social assessment by the Bank

Board Report: environmental chapter of report to the Board (including social issues, if deemed necessary)

Loan Contract: env. & soc. covenants included in finance contract (e.g. EMP, resettlement programme)

Progress/Completion: monitoring of environmental & social indicators/parameters

Ex-post: evaluation whether environmental and/or social objectives were achieved and if risks were properly managed


Env. & Soc. Acceptability

All projects should be environmentally and socially acceptable in terms of:Legal compliance, including nature conservationScreening & quality assessment of the EIAAssessment of environmental management capacity of the promoterEnvironment-related risks (environmental management plans)Environmental impact of the project itselfMitigation and/or compensation measuresEnvironment included in economic analysis (as appropriate)Where an Social Assessment deemed necessary, the project must be socially acceptable against the 5 social assessment guidance notes


Thank you!

Questions on environmental guidelinescan be addressed to:[email protected]


Legislative Compliance

Objective: To identify the main legal requirementsrelating to the project and any foreseen issues

Identify legal framework applicableEU Compliance with EU law and national law (this includes any

multilateral environmental agreements)

Candidate Countries

Compliance with EU law and national law. Where EU law not fully implemented (e.g. transition period,

look at a phased approach)

All other countries

Subject to national law and considerationsBenchmark: the principles and standards of EU law or other

international good practices (WCD, EITI) or in case of co-financing, other IFI standards, such as WB & IFC standards

Overview of EIB's Environmental and Social Project Appraisal ...

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