The European Bank  for  Reconstruction and Development:  
         					 Fueling Climate Change


An analysis of European Bank for Reconstruction and Development  fossil fuel 
project lending since the 1992 Earth Summit



A study authored by the Sustainable Energy and Economy Network (Institute for 
Policy Studies, U.S.) and the International Trade Information Service (U.S.)

				Version 1.1,  December 2, 1997.   © IPS



Table of Contents

Key Findings................................................................................3

Acknowledgments,  About the Authors...................................................5

Executive Summary ........................................................................6

Summary tables of greenhouse gas emissions by EBRD-financed                  
fossil fuel projects, 1992 to present......................................................14

Methodology................................................................................17

Member Contributors to EBRD..........................................................20

Inventory of EBRD-financed fossil fuel projects, 1992 to present...................22






Key Findings:


The European Bank for Reconstruction and Development: 
Fueling Climate Change


1. The EBRD is a significant contributor to climate change.

The EBRD has financed fossil fuel projects, beginning at its inception in 1991, and 
continuing through Dec. 31, 1996, which will, over their lifetimes, release a total of  
6.548 billion tons of carbon dioxide--or 1.78 billion tons of carbon--into the Earth's 
atmosphere. This quantity of carbon is equivalent to approximately 29 percent of all 
fossil fuel emissions generated by all of the world's countries in 1995.1 

2. The EBRD is investing in new reserves in remote regions plagued by 
environmental risks of the highest order while not ensuring that strong 
environmental mitigation strategies nor accountability mechanisms are in place.

Among the stated goals of the EBRD is "to promote in the full range of its activities 
environmentally sound and sustainable development. "2  In keeping with this, the 
EBRD has proven to be a leader in energy efficiency among the multilateral 
development banks in Central Europe.  Nevertheless, this positive step is 
countervailed by the role the EBRD is playing in helping to finance oil and gas 
projects, such as those off of Sakhalin Island in the Russian Far East--an area prone 
to severe earthquakes, potential ice sheers, typhoons, and tsunamis--where a 
devastating oil spill is likely. The EBRD also helped finance an oil development 
project which spilled more oil than the entire Exxon Valdez oil spill.

3. The EBRD is helping some of the richest multinational corporations on the planet 
gain access to vast oil and gas fields of the former Soviet Union.

The EBRD is a publicly-funded institution, whose primary mission is "to foster the 
transition towards open market-oriented economies and to promote private and 
entrepreneurial initiative in the central and eastern European countries."  Yet, in 
many cases, the end result is favorable access to oil and gas fields, thanks to EBRD 
involvement, by some of the richest corporations on the planet.  Transnationals 
who have joined in public/private partnership with the EBRD include: Shell, 
Mitsubishi, Amoco, Texaco, Enron, and Conoco. The EBRD, together with the 
World Bank, is also focused on leveraging foreign direct investment in the former 
Soviet bloc countries.  Net flows into the  region have surged over the past two 
years and are expected to top $55 billion in 1997.3 

4. The EBRD is ensuring a steady flow of oil and gas to Western Europe and Japan, 
while making oil and gas less accessible to many people in Eastern Europe, 
destroying indigenous cultures, and laying waste to some the last pristine areas on 
the planet.

Since the EBRD began operations in the former Soviet Union in 1991, and despite 
the former Soviet bloc's abundant supply of fossil fuels, consumers are finding oil 
less available in many regions, more expensive, and regional shortages more 
commonplace.   Meanwhile, oil exports--primarily to western Europe and Japan -- 
have increased by over 50 percent, from 50 to 60 million tons per year to 90 million 
tons.4  In remote oil- and gas-rich regions, local populations suffer through freezing 
winters with little or no gas to keep them warm.  Meanwhile, the indigenous 
peoples of the former Soviet Union--and the once pristine environments they 
inhabited for generations--are rapidly being destroyed by industrialization and 
environmental destruction introduced by wealthy oil and gas companies.



Acknowledgments


The authors would like to thank the following individuals for their contributions to 
this report: Doug Norlen, Dafna Laurie, Andreas Strotmann, Fiona Dove, Ophelia 
Cowell, Jim Barnes, Petr Hlobil, Daniel Von Moltke, and Ian Tellam.


---------------------------------------






About the Authors


The Sustainable Energy and Economy Network, a project of the Institute for Policy 
Studies (Washington) and the Transnational Institute (Amsterdam), works in 
partnership with non-governmental organizations in the U.S., Europe, and Asia on 
environment and development issues.   SEEN has produced three prior reports on 
the World Bank:  "The World Bank and the G-7: Changing the Earth's Climate for 
Business;" "The World Bank's Juggernaut: The Coal-Fired Industrial Colonization 
of the Indian State of Orissa" and "Consultative Group to Assist the Poorest: 
Opportunity or Liability for the World's Poorest Women?"  Network coordinator 
Daphne Wysham is co-editor of a book of essays on the World Bank, Beyond 
Bretton Woods: Alternatives to the Global Economic Order (Pluto, 1995). In addition 
to research and advocacy work, SEEN is working with village women in rural India 
to develop the "Women's Power Project," a model of sustainable development that 
incorporates women's empowerment, renewable energy, forest regeneration, and 
microenterprise. For more information, please contact: Daphne Wysham, 
SEEN/IPS, 733-15th St., NW, Suite 1020, Washington, DC 20005. Phone: 202-234-
9382. Fax: 202-387-7915. E-mail: <dwysham@igc.apc.org>.

The International Trade Information Service, a project of the non-profit Tides 
Center, was formed in 1995 to investigate and expose the social and environmental 
impacts of international trade.  Previous reports involving ITIS research include 
three ground-breaking reports on the production and trade of ozone-depleting 
chemicals (two in collaboration with Ozone Action, one with Greenpeace 
International); two reports in collaboration with SEEN, "The World Bank and the 
G-7: Changing the Earth's Climate for Business" and "The World Bank's 
Juggernaut," a report which exposes how multilateral and bilateral aid, combined 
with transnational corporate interests, is turning a region of India into a "toxic 
colony" designed to provide G-7 countries with cheap commodities; and "A Day in 
the Life of U.S.-Indonesia Trade," an independent report on the social and 
environmental repercussions of a typical day's commerce between two countries.  
ITIS also provides background reports for numerous non-profit organizations on a 
wide variety of subjects.  For more information, please contact: Jim Vallette, ITIS, 
P.O. Box 658, Southwest Harbor, ME, 04609, USA.  Phone: 1-207-244-3106.  Fax: 1-800-
861-9611. E-mail: <itis@igc.apc.org>.


Executive Summary

"It is quite likely that private capital will be more efficient than Soviet rule was in 
developing Siberia's riches. The question is, will it be more humane towards nature 
and human beings?"

--Isvestiya broadcast, Jan. 31, 1996

The European Bank for Reconstruction and Development (EBRD) was created in 
1991--simultaneous with the breakup of the Former Soviet Union -- to open up the 
formerly communist countries to multinational corporations and investors. Like 
the World Bank Group5, and other regional development bank offshoots of the 
Bretton Woods institutions, the EBRD is clearly focused on a strategy of 
privatization, liberalization of financial and trade markets, and deregulation--the 
three pillars of neoliberalism.  Also like the World Bank Group, the EBRD has made 
fossil fuels an engine of this development model. As a result, although only 6 years 
old, the EBRD is already proving to be a major player in promoting the rapid 
accumulation of greenhouse gases in the Earth's atmosphere.

Since its inception in 1991 and through Dec. 31, 1996, the EBRD has approved 450 
projects totaling $11.5 billion; $1.2 billion of those investments were in oil, gas, and 
coal projects in the former Soviet bloc. Our report outlines 23 projects totaling $1.01 
billion in EBRD financing through December 1996 (and two projects with total 
financing of $140 million in 1997 to date).  The amount of private capital leveraged 
by the EBRD is roughly double the amount the EBRD invests.  Our study of these 
projects estimates that these fossil fuel projects will, over their lifetimes, release a 
total of  6.548 billion tons of carbon dioxide--or 1.78 billion tons of carbon--into the 
Earth's atmosphere. This quantity of carbon is equivalent to approximately 29 
percent of all fossil fuel emissions generated by all of the world's countries in 1995.6 

The World Bank Group also plays a role in financing many of these same fossil fuel 
projects. A previous report done by the same authors of this report extensively 
documented those fossil fuel investments since 19927.  If World Bank-financed 
projects are deducted from the total number of EBRD fossil fuel projects, the 
amount of greenhouse gases for which the EBRD is solely responsible comes to 5.278 
billion tons of carbon-dioxide--or 1.4 billion tons of carbon.  This is equivalent to 22 
percent of all fossil fuel emissions generated by all of the world's countries in 1995.

The EBRD's operations are financed by national government contributions. The 
dominant investors within the EBRD are the United States, France, Germany, Italy, 
Japan, and the United Kingdom, which have collectively contributed 55% of the 
institution's capital.  (See p. 20 for a list of other contributors.) These moneys are 
then invested in the countries of eastern Europe, the Baltics and the 
Commonwealth of Independent States (CIS).

Fossil fuel investments -- especially in Russia's massive oil and gas fields, the fifth 
largest in the world-- have been a priority for the EBRD from its inception.  About 
five percent ($554 million) of all EBRD investments have been focused on Russia. 
About 10 percent of the global oil supply and 30 percent of the world's production of 
natural gas is extracted from the Russian oil fields.  Russia is also a major 
greenhouse gas emitter, producing nearly 10 percent of global greenhouse gases, 
ranking third after the U.S. and China.  Nearly half of Russia's hard currency is 
generated by oil and gas exports--the biggest single source of revenue to the Russian 
state8--and a vital resource for credit and repayment of further EBRD and World 
Bank loans.

As a consequence, as the EBRD and the World Bank have grown more heavily 
invested in the capitalization of Russia, big projects, like the exploitation of the 
massive oil and gas fields in the Arctic, in Siberia, and around Sakhalin Island,  
have moved to the front of EBRD's growing
lineup of fossil fuel financing schemes. (See p. 14 for further information on 
Sakhalin.)

In the first two years, these investments were delayed by bureaucratic obstacles that 
developed during the disintegration of the former Soviet Union.  "We have come 
up against every hurdle you can imagine and about 30 you can't," an EBRD official 
told the Petroleum Economist magazine in 1993.

But with the help of an army of World Bank- and EBRD-paid economists and 
privatization experts, the Soviet way of doing things was speedily replaced with the 
capitalist way.  As a result, since 1993, the EBRD's fossil fuel projects have gained 
considerable momentum, particularly in Russia.

Modernization

In helping to finance oil, gas and coal projects, the EBRD has acted as an agent of 
Western corporations by arguing that these powerful players bring vital expertise, 
modernization and efficiency to oil, gas, and coal rehabilitation projects.  The 
problem of a decaying energy infrastructure, long neglected by a Soviet leadership, 
and its potential for both environmental problems and economic inefficiencies, is 
certainly a real and serious environmental problem; lakes of oil lie beneath 
countless ruptures in oil pipelines, undetected for months, if not years.

However, the EBRD's and the World Bank's push for modernization of oil and gas 
fields is not, as a rule, directed at the most egregious examples of decaying 
infrastructure for the petroleum industry.  This is because, for the most part, the 
most accessible (and the most environmentally abused) oil and gas fields are still 
held in Russian hands--and the infrastructure servicing these fields usually remains 
owned by Russian industries.

Rather than working with the Russian oil industry to make existing infrastructure 
projects more environmentally sound, the EBRD and Western investors are largely 
focused on gaining access to and control over heretofore untouched oil and gas 
fields.  These fields are often in remote and pristine regions, or in regions where the 
risk of an environmental accident--from earthquakes, tsunamis or ship wrecks-- is 
dangerously high. Where the EBRD does make loans for "rehabilitation," the 
projects are focused primarily on increasing production by modernizing and 
reconditioning abandoned wells, instead of paying close attention to environmental 
aspects.

As a result, the call for "modernization" of Russia's oil and gas fields--while 
genuinely needed--instead provides a convenient entree to transnational 
corporations who then obtain access to previously untouched fields of black gold.  
Rare is the fossil fuel financing scheme set up by the EBRD that does not involve at 
least one Western corporation.

Privatization

Once the EBRD, together with oil multinationals like Amoco and Texaco, has 
gained entree to the former Soviet bloc countries' energy markets by claiming a 
competitive edge in providing more "modern" equipment, the EBRD, alongside 
other powerful quasi-governmental institutions like the World Bank, shifts its 
attention to privatization.  Between 1992 and 1994, 70 percent of state-owned 
enterprises in Russia were privatized.9   Many of these were state-owned energy 
enterprises.

One of the EBRD's first fossil fuel loans was extended to Romania in 1992.   Mario 
Sarcinelli, EBRD's vice president in charge of development banking, said, "By 
giving financial support to this petroleum pilot modernization project, the 
European Bank will help Petrom (the Romanian national oil company) modernize 
its operations, save the government foreign exchange by curbing the need to import 
oil and, more importantly, help promote future involvement of the private sector 
in oil activities." 10 

The importance of private sector involvement in fossil fuels, the EBRD and World 
Bank officials argue, is that they are more efficient and less prone to bureaucratic 
delays than public ones. They are also more inclined to sign procurement contracts 
with foreign equipment suppliers, continuing the influx of foreign ownership and 
capitalization of the fossil fuel industry, and export-oriented economic growth in 
the former Soviet bloc countries.  But such procurement of foreign goods and 
services does not come without government resistance, in the form of taxation.  In 
fact, much of the money approved by the EBRD and the World Bank remains 
undisbursed because some aid recipients complain of high Russian tariffs on 
imported equipment; others complain of the Bank's insistence that the 
rehabilitation equipment should be imported, not domestically produced.

In August 1996, the U.S. embassy in Moscow reported that "the World Bank, 
European Bank for Reconstruction and Development and U.S. Export-Import Bank 
have been active in attempting to support foreign equipment sales to Russian 
petroleum producers, having made available loans totaling $5.5 billion through 
special programs for oil field workovers, oil production joint ventures and refinery 
modernization. However, only a tiny fraction of these funds has been disbursed to 
date due to high taxes imposed on the petroleum sector by the Russian government 
which has made utilization of foreign loans uneconomical."

On the other hand, some Russians have found the EBRD's and World Bank's 
insistence on purchasing foreign equipment to be absurd.  "World Bank 
rehabilitation loans routinely have open international tenders mounted for buying 
the equipment required and open to whatever companies from Bank member-
countries," reported Russia's Segodnya magazine in 1996.  "As it happens, Russian 
equipment has a patent edge in the event, habitually costing at least forty percent 
less than overseas facilities at much the same technical standards fitting Russia's 
requirements; its further assets are adequate repair facilities, personnel, and modest 
transportation expenses. Crucially, the standards and quality of such Russian 
equipment, essentially metal-intensive unsophisticated articles, have dramatically 
improved following  some defense factories joining in their output as part of a drive 
to convert to  civilian production.   Going by past experience, though, such tenders 
are inherently a losing battle for Russian bidders; ludicrously enough, now and then 
the foreign winners of such tenders ultimately come to supply precisely Russian 
equipment for such projects."

When a recently privatized Siberian oil company, Yuganskneftegaz, canceled its 
$190 million loan from the World Bank in March 1996, Moscow's Economic News 
Agency reported that, "a major factor in declining the loan was a condition that only 
foreign companies be allowed to tender to supply equipment, which is available 
from Russian producers at between a third and half the price of [Russian producers].  
Tatneft and Permneft have in the past refused World Bank credits for similar 
reasons."

Privatization, others argue, is not in itself a negative development, and could, in the 
some cases be positive. However, without adequate regulatory structures in place, 
and without democratic participation ensuring transparency and accountability, 
privatization is resulting in one remote, unaccountable bureaucracy being replaced 
by another.

Foreign Investment

The goal of the EBRD's initial energy operations policy11 was to: focus on repair and 
rehabilitation of existing supply facilities; promote "'liberalization' of supply; and 
inject foreign capital."  It has certainly succeeded, by any measure, in the latter goal. 
By positioning foreign agents of modernization to develop oil and gas fields; 
ushering in privatization which allows transnational corporations to own and 
export the goods, and even gain tax breaks from the host country in the process of 
bargaining loans; and providing political and other forms of risk insurance for 
investors; the EBRD and the World Bank have made investment in the former 
Soviet bloc countries a very attractive investment opportunity.  As a result, a 
growing supply of foreign, mostly private, capital is flowing into the region.  Net 
flows into the  region have surged over the past two years and are expected to top 
$55 billion in 1997.12  

Fossil Fuel Infrastructure Support

In other Eastern European countries, where oil and gas reserves are depleted, the 
EBRD is providing loans for the energy sector "downstream" from actual fossil fuel 
recovery; for example, the EBRD is providing support to refineries, pipelines, and 
terminals, many of which will be tied into EBRD-financed, TNC-invested oil and 
gas field developments.

*Pipelines

The EBRD is eyeing Azerbaijan's and Kazakhstan's considerable oil, coal and gas 
reserves as potential future investments13, and has expressed interest in financing 
an oil pipeline from--and perhaps under-- the Caspian Sea to Eastern Europe.  The 
EBRD is also considering financing a planned pipeline for Azeri, Kazakh and 
Russian crude from the Caspian Sea, via the Black Sea port of Bourgas, Bulgaria, to 
the Mediterranean port of Vlore, Albania.14 Western transnationals are heavy 
investors in the booming Caspian Sea oil fields.
 
*Power Plants

Another fossil fuel sector in which the EBRD is very active--albeit downstream from 
actual mining--is power production.  The EBRD has claimed that it is focusing on 
rehabilitating existing power plants, rather than building new plants,  because, 
according to Eastern European Energy Report,  "existing power generating plants can 
produce more power than the region needs currently." 15

As with primary oil and gas production, however, the promotion of energy 
efficiency by the EBRD is not viewed as an end in itself, but instead appears to set the 
stage for privatization and expansion of access to fossil fuel reserves.  The EBRD has 
joined forces with the World Bank to encourage power sector privatization in 
several Eastern European countries, and is reportedly poised to lend considerable 
funds to some new fossil fuel power projects in countries like Poland and 
Romania.16  Rehabilitation loans appear to be the EBRD's first wave of entree into 
these countries' power sectors, with the development of Western corporation-
owned, -supplied, and -built fossil fuel power plants the ultimate and final wave of 
investment.

An Upward Trend

Now that privatization has firmly taken hold in the former Eastern Bloc, and 
foreign direct investment is on a steady upward trend, the EBRD is poised to fund 
many more large-scale fossil fuel projects.  Pending loans include:

* A $116 million loan to develop the 140-million-metric-ton Piltun-Astokskoye oil 
field off Sakhalin Island, Russia.  The targeted project is run by a joint venture of 
Shell (U.K./Netherlands), Marathon Oil (U.S.), and Mitsui and Mitsubishi (Japan). 
17

* A $300 to $400 million loan for development of Romania's oil fields, slated for 
private investment.  

* $175 million in annual investments in Russian gas company GazProm's export-
oriented ventures. 18

With over $600 million dollars in pending fossil fuel loans, the EBRD will 
apparently continue its trend of increasing fossil fuel investments over time.   In 
1992, its fossil fuel investments totaled $79 million.  By 1996, the EBRD financed 
fossil fuels to the tune of $391 million, bringing its total fossil fuel lending past the 
$1.15 billion mark, and increasing its annual investment in fossil fuels by almost 500 
percent.

The Consequences

What are the consequences of this economic and political restructuring led by the 
multilateral development banks?  If you happen to be one of the 10 million people 
in the former Soviet bloc countries dependent on the fossil fuel industry as a source 
of livelihood, things are not looking bad; for example, the average salary in the oil 
and gas industry is three times higher than in most other sectors of the Russian 
economy.  

However, for those not employed by the oil and gas industry, things are less than 
rosy. Income disparities and poverty have increased throughout the region in the 
1990s. According to the EBRD's recent publication, Transition Report 1997: 

Social policies in central Europe have mitigated [the growth of income disparities] to 
some extent, but in the CIS, inequality and poverty have risen very sharply. Related 
social indicators, particularly life expectancy, have also deteriorated in many 
countries.

Some point to the positive aspects of new "production sharing agreements" as a sign 
of good things to come for people in the oil- and gas-bearing regions. These 
agreements in countries like Russia may result in as much as 60% of tax revenues 
from oil and gas allegedly returning to local governments.  However, corruption is 
rife in the region, and is not adequately challenged by the EBRD nor by the World 
Bank.19  Hence, a large portion of benefits ostensibly intended for local 
communities will likely end up lining the pockets of local politicians instead.

Because economic and energy self-sufficiency for local communities has not been a 
priority in most petroleum-rich regions, most people living in oil- and gas-rich 
regions like Sakhalin will remain poor, without access to affordable electricity. With 
oil spills likely, their current reliance on fisheries as a source of revenue is 
threatened.

Furthermore, despite the former Soviet bloc's abundant supply of fossil fuels, 
consumers are finding oil less available in certain regions, more expensive, and 
regional shortages more commonplace, making long, cold winters even more 
unbearable. Meanwhile, Russian oil exports have increased by over 50  percent--
from 60 million tons per year to 90 million tons.20    The target market is primarily 
western Europe and Japan.

The growing expansion of export markets will have predictable consequences for 
these highly polluting countries: It will keep energy prices lower than they 
otherwise might be; it will continue to make renewable forms of energy less 
competitive, with predictably less private capital investment in renewable forms of 
energy; and it will decrease motivation for further reductions in fossil fuel 
consumption. Future investments from the EBRD and Western investors in 
expansion of a trans-European pipeline will lift the only existing constraint on 
Russian oil exports.

A Fraying Social Fabric

In addition to poverty and a diminished access to fossil fuels, social consequences at 
the mining or drilling site are proving serious. The high salaries paid to workers in 
the fossil fuel industry has attracted questionable characters--some with criminal 
records--to remote regions. These high-paid laborers are slowly outnumbering the 
original indigenous inhabitants of the region. Because of this and other political 
changes at the local level, indigenous peoples lack any meaningful representation or 
participation in the political decision-making process. As a result, the rights and 
traditional, subsistence ways of life of the indigenous peoples--the Komi, Khanty,  
Mansy, Evenki and other smaller tribes--have been severely disrupted and 
destroyed.

For generations, these tribes have herded reindeer, and fished and hunted caribou 
and other animals. Today, migration routes for the caribou are being disrupted by oil 
and gas pipelines and industrial development. Poaching, introduced by the roads 
that have penetrated these once pristine regions, is now commonplace. And 
environmental pollution and degradation has reduced or destroyed fish, bird, and 
other animal populations around oil and gas fields.

Environmental Degradation

The final consequence of the EBRD's and the World Bank's investments in fossil 
fuel as an engine of growth in the FSU is the impact it has on the regional and 
global environment.  Once virtually untouched, the vast expanse of the Russian 
taiga forest and other wild lands and marine areas are now at risk from the fossil 
fuel industry.  The exploitation of fossil fuels is particularly rapid in the central and 
northern taiga in Siberia and the Far East; there, roads built by the oil and gas 
industries in wilderness areas means tens of millions of hectares of once pristine 
forest and lowland areas are now open to logging or other forms of exploitation.

The EBRD and the World Bank Group are playing a pivotal role in getting countries 
to turn their "black gold" into cash--helping them get fossil fuels out of the ground 
as fast as possible so that loan repayment schedules can be met. In doing so, they are 
creating a cycle of dependency on a natural resource whose future is dim. According 
to some estimates, Russian oil reserves will be exhausted in 20 years at the present 
rate of extraction. 

The World Bank's Global Carbon Initiative

One obvious mitigation strategy in dealing with the threat climate change poses for 
present and future generations is for Annex 1 countries to stop providing countless 
government subsidies--hidden and unhidden--to the fossil fuel industry, and 
instead to start funding energy efficiency and truly sustainable, renewable and safe 
energy options.  Instead, publicly funded development lending institutions--like the 
EBRD and the World Bank--and other multilateral and bilateral development 
finance and export credit agencies are doing just the opposite. Furthermore, the 
World Bank now proposes that they couple their massive fossil fuel financing with 
an emissions trading scheme, wherein industries in, say, the U.S. could continue to 
emit high quantities of greenhouse gases by purchasing emissions credits from 
former Soviet bloc countries FSU (whose collective emissions are currently below 
1990 levels). The World Bank proposes (via its newly minted "Global Carbon 
Initiative") that it act as a "middleman" in this financial transaction--thus playing 
the role of the world's largest public financier of fossil fuels, and the buyer and seller 
of emissions credits to make these projects (and others) slightly less polluting. 
Should this prove successful, the Bank proposes that it eventually be extended to 
other developing countries.

While this may be the most "economically efficient" response to climate change for 
a handful of industries, it is certainly not the most environmentally nor socially 
viable response to the global threat climate change poses to all of the world's 
peoples, particularly the poorest.  Nor does it do anything to remedy the growing 
gap between the energy-rich and the energy-poor peoples of the world.

Who benefits from this scheme? 

1) Large oil, gas and coal companies--and energy intensive industries--who might 
face costly emissions restrictions in the future in their home countries, but now 
have easy access to credits.
2) Government officials, many of them corrupt, in the former Soviet bloc, who 
willingly receive payment from the World Bank for these pollution credits.
3) The World Bank, who carves out a new niche for itself as the repository for JI 
funds. By 2005, the World Bank estimates the market for greenhouse gas offsets 
could be in the range of $3 billion to $16 billion.  It also begins to generate additional 
revenue for fossil fuel projects in the pipeline, making these projects less expensive 
for the client countries and, therefore, potentially even more attractive.

Who loses? 

We all lose with the promotion of a scheme that is a "shell game"--moving 
emissions from one bank account to another, rather than making truly significant 
cuts as is urgently required for climate stabilization.  But the biggest losers are the 
poorest communities, often indigenous or tribal peoples or other equally 
marginalized populations, who are devastated by fossil fuels from cradle to grave--
from mining to refining to burning.  It is these people who will continue to pay the 
highest price for this shell game.


Conclusion

If the EBRD wants to achieve truly sustainable development, it should assist the 
former Soviet bloc countries in making a truly sustainable transition, with a 
particular focus on providing resources for energy efficiency--for the future of their 
people, for the future stability of their economy, and for their environment--and not 
continue to encourage the region to rebuild its economy with fossil fuels--a house of 
cards that will certainly collapse as it burns.


Sakhalin: An Exxon Valdez in the Making?

Sakhalin Island is located in a very seismically active environment on the Pacific 
Rim. On May 28, 1995, an earthquake estimated to be as high as 8 on the Richter 
Scale struck the Sakhalin oil town of Neftegorsk, destroying the town, reportedly 
killing 2000 of its 3000 residents, and rupturing oil pipelines in over 50 places.  At 
least 100 tons of oil spilled into several rivers.  The Sakhalin region is rich in 
marine biodiversity, and harbors one of the richest fisheries on the Pacific Rim. 
Several endangered species of dolphin and whale migrate through these waters. 

The area is also rich in oil and gas, and has attracted interest from investors, 
including the EBRD, the US Overseas Private Investment Corporation, and the 
Japanese Export-Import Bank.  Drilling platforms would be placed in the frigid 
waters of the Sea of Japan, where they and cargo tankers would be exposed to high 
winds, tsunamis, ice sheers, and other wind and wave action that could result in a 
catastrophic spill that would be difficult--if not impossible--to contain.

Activists and others who suffered through the aftermath of the Exxon Valdez oil 
spill say that one lesson learned from this experience is that public oversight is 
perhaps the single most important factor in assuring the protection of the 
environment.  In a recent letter to Neftegorsk Governor Farkhutdinov, written by 
oil spill mitigation and prevention expert Rick Steiner of Valdez, Alaska, Steiner 
suggested that a Sakhalin Regional Citizens Advisory Council (RCAC) be established 
to empower and finance the public to ensure adequate oversight of oil industry 
operations on Sakhalin.  "I feel that the establishment of a Sakhalin RCAC is so 
critical that it should be required by the international lending institutions as a 
condition of their financial support, and/or by the government as a condition of 
permitting the project," Steiner wrote.

No such RCAC is in place in Sakhalin. A thorough environmental risk analysis had 
not been conducted.  No requirements were placed on oil and gas companies that 
they provide for the energy needs of the local population--and protect them from 
economic ruin in the event of a catastrophic spill. Nevertheless, the EBRD was 
prepared to approve a loan for $116 million to finance the first phase of new oil and 
gas development in the region.  A letter of protest, led by the Pacific Environment 
Resource Center21 , slowed down the process by several months.  Nevertheless, the 
project--one of many new oil and gas projects pushed by the EBRD throughout the 
region--is moving forward. 

Summary tables of greenhouse gas emissions by 
EBRD-financed fossil fuel projects, 1992 to present




Total EBRD Fossil Fuel Financing, 1992 to present: $1.214 billion
Total estimated lifetime carbon dioxide emissions from these projects: 6.548
billion tons
Total emissions, excluding World Bank-financed projects: 5.278 billion tons


EBRD-financed fossil-fuel burning power plants
                                                                       
                                               ($million)                  (Capacity)                       (est. 20 years          
                                                                    				             full capacity)
Country	  Project     Financing    Fuel      MW    CO2 emissions in metric tons    

Georgia (x)           Gardabani       $18             oil/gas        1,800               193,100,000 (c)
Romania (x)          RENEL          $90             coal            1,400                224,000,000
Armenia (x)           Hrasdan         $57            oil/gas            300                  32,200,000 (c)
Bulgaria                Maritza           $46             coal              215                   34,400,000
Ukraine            Starobeshevo     $113            coal              210                   33,600,000
Belarus                    Orsha           $45             gas                 65                     5,200,000

(Power plant generator manufacturer)

Poland               ABB Dolmel       $7               coal           >470                  75,200,000 (d)

EBRD-financed fossil fuel fields and mines
                                                
OIL FIELDS                    ($million)         (Metric tons)         Estimated lifetime
Country       Project          Financing       Proved reserves        CO2 emissions

Russia                Samotlar (a)         $58                       1.2 billion                     3,720,000,000
Romania (x)         Petrom                $26                       137 million                       424,700,000
Russia               KomiArctic (b)    $105                        68.5 million                    212,300,000
Russia (x)             Geolibent            $55                        48 million                        148,800,000
Russia (x)              Ardalin               $90                        15 million                          46,500,000
Russia                Chernogo              $40                        14.1 million                       43,700,000
Russia                    Magma              $53                           8.5 million                      26,300,000
Ukraine                  Poltava                $8                           7 million                         21,700,000
(x) Russia              Tomsk Obl.         $9                          4 million                         12,400,000

OIL STORAGE           ($million)     (metric tons)       Estimated 20-year
Country        Project    Financing    20 years flow       CO2 emissions

(Oil imports from Iran)

Moldova           Giurgulesti        $15                42 million                     130,200,000 

OIL REFINERY         ($million)     (metric tons)          Estimated 20-year
Country        Project    Financing    20 year flow           CO2 emissions

Uzbekistan        Fergana            $90             120 million                  372,000,000 (local oil) 
Slovakia            Slovnaft            $56             118 million                 365,800,000 (oil from 
Urals)
Russia                Achinsk           $42               24 million                   74,400,000 (oil from E. 
											Siberia)

OIL TRANSPORT

Russia          Novo. Ships           $60             88 million      (assumed to be incl. above)
Russia          SFAT Trains           $42             16.2 milion     (assumed to be incl. above)
                                                                                                 
GAS FIELDS                    ($million)         (cubic meters)        Estimated lifetime
Country       Project            Financing       Proved reserves        CO2 emissions

Romania (x)       Petrom 	     (incl. above)   	    99 billion                          183,200,000
Ukraine             Poltava 	     (incl. above)               31 billion                            57,400,000              
Russia             Tomsk Obl. 	      (incl. above)              29 billion                            
53,600,000
                       
GAS PIPELINES        ($million)     (metric tons)          Estimated 20-year
Country        Project    Financing     20 year flow             CO2 emissions

Macedonia       Gasification     $34                     28 billion                           51,800,000

GAS STORAGE        ($million)          20 Year            Estimated 20-year
Country        Project    Financing      flow (c. meters)      CO2 emissions

(x) Hungary        Zsana           $55                    >3 billion                        5,600,000

__________________________________________________________
____________

(a) - Combines two projects to expand production in the massive Samotlar oil field 
(the Chernogorneft Drilling project approved in March 1997 and the Samotlar Pan-
Canadian project approved in February 1994).

(b) - Combines initial project (Feb 1994) to expand production in Usinsk oilfield, and 
subsequent emergency loan (May 1995) to clean up oil spill.

( c) - Assumes half of fuel burned is oil, half is gas.

(d) - Reflects two 235 megawatt generators sold by ABB Dolmel after loan. This 
facility has likely manufactured many more fossil fuel power generators during this 
time frame, and will continue to make such equipment into the future. 
 
(x) - World Bank-financed project.


Methodology

Power plant emissions  

For each power plant project financed by the EBRD, it is assumed that it will run for 
20 years at full capacity from the time of financing.  

Environmental Costs of Electricity, a book by the Pace University Center for 
Environmental and Legal Studies (Oceana Publications, 1990),  summarizes rates of 
carbon dioxide and other emissions from various power plants. Table 2 in Chapter 
IV of the book, "New Coal Plant Emissions," summarizes studies by PLC Inc. and 
the Oak Ridge National Laboratories for the U.S. Department of Energy.  

Coal

According to these studies,  a new coal fired power plant will release between 1.96 
(PLC) and 2.09 (DOE) pounds of carbon dioxide per kilowatt hour of operation.   For 
our report, we assume that any given coal-fired power plant will emit 2 pounds of 
CO2 per kilowatt hour.   

A power plant with a one megawatt (1,000 kilowatts) name plate capacity will 
produce the equivalent of 8,760,000 kilowatt hours annually at full operation -- that 
is, 8,760 hours multiplied by 1,000.  At this rate, such a plant would emit an 
estimated 17,520,000 pounds, which is the equivalent of 8,760 short tons or 7,947 
metric tons of CO2.

Natural Gas

Pace's table 3, "Emissions for Natural Gas-Fired Generation," puts the rate of 
emissions for these type of plants at 1.14 pounds (PLC) and 0.99 pounds (DOE) of 
carbon dioxide per kilowatt hour.  For this study, we assume that 1 pound of CO2 
will be released per kilowatt hour; that is, a plant with 1 megawatt capacity will 
release 8.76 million pounds per year -- 4,380 short tons/ 3,973 metric tons.

Oil

Pace's table 4, "Emissions for Oil-Fired Generation," puts the rate of emissions for 
oil-fired plants at 1.65 (DOE) to 1.75 (PLC) pounds of carbon dioxide per kilowatt 
hour.  For this study, we assume that 1.7 pounds of CO2 will be released per kilowatt 
hour, or the equivalent of 7,446 short tons / 6,754 metric tons of CO2 per year per 
megawatt.  

This table also summarizes the PLC-determined rate of emissions from diesel-fired 
plants: 2.19 pounds of CO2 per kilowatt hour, the equivalent of 9,592 short tons / 
8,702 metric tons of CO2.

Multiplying these rates' emissions by the assumed 20 years of operation at full 
capacity, the following conversion rates are used to determine estimated total 
emissions of World Bank-financed power plants:

Estimated CO2 emissions per megawatt capacity of EBRD-financed power plants 
over 20 years of full capacity operations

                     Coal    Natural Gas   Oil    Diesel
CO2 (in metric tons)   159,968       79,484      135,188   174,061


Fossil Fuel Extraction and Distribution

The study takes the admittedly simplified approach that all fossil fuels extracted 
and/or distributed will be burned in power plants.  We also assume that all proved 
reserves in fossil fuel fields that are touched by EBRD programs ultimately will be 
burned.

Other than power plants, potential demand points for fossil fuels include industrial 
processes, vehicles, household stoves and heaters.  Rates of emission are generally 
comparable across demand or transformation points, although vehicles tend to emit 
a bit less carbon dioxide than power plants.   

Counterbalancing this approach, however, are numerous omissions from our 
report.  This study does not take into account numerous other likely releases of 
greenhouse gases due to the extraction and distribution of fossil fuels, such as 
natural gas flaring from oil field production, methane releases from coal mining 
and gas operations, and pipeline leaks.  We do not attempt to estimate releases of 
perfluoromethanes, hydrofluorocarbons, nitrous oxide, or other very potent 
greenhouse gases. Nor do we catalog EBRD involvement in numerous other 
industries -- particularly transportation and cement, aluminum and steel factories -- 
which are major greenhouse gas emitters.   Also, fields touched by EBRD financing 
have considerable "probable" reserves which may be extracted in the future but are 
not taken into account here.   

Therefore, overall, this report might greatly underestimate the greenhouse gas 
emissions that the EBRD's projects since mid-1991 ultimately will help to create.  

When the EBRD finances a pipeline, we have attempted to identify the source fields 
for the pipelines, and the total proved reserves of these source fields, which form 
the basis for our estimates.  If we do not know the reserves, but do know the 
anticipated flow rate through a given pipeline project, we assume that this rate will 
continue for 20 years.

In 1993, the Stockholm Institute - Boston Center produced "Towards a Fossil Free 
Energy Future: A Technical Analysis for Greenpeace International."  In this report, 
the Stockholm Institute summarizes greenhouse gas emissions from various 
sources (Table 4.5: Compilation of GHG emission factors used in this study: 
transformation sources, page 36).  It lists emission factors of 2.71 kilograms of carbon 
dioxide per kilogram of coal input, 1.85 kg per cubic meter of natural gas, and 
between 3.06 and 3.14 kilograms per kilogram of oil.  We split the difference and 
assume 3.1 kilograms of carbon dioxide emissions per kilogram of oil input.

Thus, we use emission rates of 3.1 tons of carbon dioxide per ton of oil, 2.71 tons per 
ton of coal, and 1.85 kilograms per cubic meter of gas.

For oil, a conversion rate of 7.3 barrels per metric ton is used.   For natural gas, the 
conversion rate is 35.314 cubic feet per cubic meter.  One metric ton of gas equals 
about 138 cubic feet or 3.908 cubic meters.

We have tried to prevent double-counting of emissions that may occur when a 
EBRD-financed power plant burns fossil fuels that have been extracted or distributed 
with EBRD involvement. Similar double-counting prevention procedures are used 
in pipeline and refinery projects.

Member Contributors to EBRD

Membership and capital

The EBRD has 60 members (58 countries, the European Community and the 
European
Investment Bank), including 26 countries of operations in central and eastern 
Europe and the
Commonwealth of Independent States (CIS). The EBRD operates in the following 
countries: Albania, Armenia, Azerbaijan, Belarus, Bosnia & Herzegovenia, Croatia, 
Czech Republic, Estonia, Macedonia, Georgia, Hungary, Kazakhstan, Krygystan, 
Latvia, Moldova, Poland, Romania, Russian Federation, Slovak Republic, Slovenia, 
Tajikistan, Turkmenistan, Ukraine and Uzbekistan. The EBRD's initial subscribed 
capital is ECU 10 billion, of which 30 per cent is paid in. In April 1996 the Board of 
Governors agreed to increase the Bank's capital base to ECU 20 billion. The Bank 
also borrows in various currencies on world capital markets.

Organization

The powers of the EBRD are vested in a Board of Governors, to which each member 
appoints a Governor and an Alternate. The Board of Governors has delegated 
powers to a Board of Directors with 23 members, who are elected by Governors for a 
3-year term. The Board of Directors is responsible for the direction of the general 
operations of the Bank, including establishing policies, taking decisions concerning 
projects and approving the budget. The President is elected by the Board of 
Governors for a 4-year term. Vice Presidents are appointed by the Board of Directors 
on the recommendation of the President. 

Financing

The EBRD can operate in both the private and public sectors. The kinds of finance it 
offers include loans, equity investments and guarantees.  The terms of the EBRD's 
funding are designed to enable it to cooperate both with other international 
financial institutions and with public and private financial institutions through co-
financing arrangements.

By 31 December 1996, the Bank had approved 450 projects: these involved ECU 9.96 
billion of the EBRD's own funds and were expected to mobilize an additional ECU 
20.1 billion. Of the approved projects, 370 had been signed committing ECU 7.7 
billion of the EBRD's own funds.  Seventy-three per cent of total approved funding 
was for private sector projects.

The EBRD's headquarters are in London, with 24 Resident Offices or Regional 
Offices in 22 of its countries of operations.

Members of the EBRD as of December 31, 1996 (with capital subscriptions to EBRD in 
millions of US$ in parentheses): Albania ($11.5); Armenia ($5.7); Australia ($115); 
Austria ($262); Azerbaijan ($11.5); Belarus ($23); Belgium ($262); Bosnia and 
Herzegovina ($19.4); Bulgaria ($90.8); Canada ($390.8); Croatia ($41.9); Cyprus ($11.5); 
Czech Republic ($98.1); Denmark ($137.9); Egypt ($11.5); Estonia ($11.5) Finland 
($143.7); Macedonia ($7.9); France ($979); Georgia ($11.5); Germany ($979); Greece 
($74.7); Hungary ($90.8); Iceland ($11.5); Ireland ($34.5); Israel ($74.7); Italy ($979); 
Japan ($979); Kazakhstan ($26.4); Korea ($74.7);  Kyrgyzstan ($11.5); Latvia ($11.5); 
Liechtenstein ($2.3); Lithuania ($11.5); Luxembourg ($23);  Malta ($1.2); Mexico 
($34.5); Moldova ($11.5); Morocco ($11.5); Netherlands ($285.1); New Zealand ($11.5); 
Norway ($143.7); Poland ($147.1); Portugal ($48.3); Romania ($55.2); Russia ($459.8); 
Slovak Republic ($49); Slovenia ($24.1); Spain ($39.1); Sweden ($262.1); Switzerland 
($262.1); Tajikistan ($11.5); Turkey ($132.2); Turkmenistan ($1.2); Ukraine ($92); 
United Kingdom ($979); USA ($1,149.4); Uzbekistan ($24.1); European Community 
($344.8); European Investment Bank ($344.8).

Top Six Contributors to the EBRD:

USA			$1,149.4 million
France  		    $979
Germany 		    $979
Italy           		    $979
Japan           		    $979
United King.   	    $979

Total of top six = $6.044 billion (55% of total)
Others combined = $4.923 billion

EBRD total investment pool, 1996 = $10.967 billion


Inventory of EBRD-financed fossil fuel projects, 1992 to present

ARMENIA

Type of Industry: 300 megawatt oil/gas power plant
Subsidized Project: Hrasdan Thermal Power Plant-Unit 5
Location: 60 km north of Yerevan, Armenia
Owner of Project: Energy Ministry
TNC Involvement: In February 1997, Armenia requested bids for contractors to 
complete the construction of the power plant; eventual foreign ownership of this 
plant is likely.
EBRD Financing: $57 million. 
Date of Approval: April 1993.
Additional financing: Japan Import-Export Bank; Armenian government.
Notes: The project involves construction of a 300MW combined oil and gas-fired 
power plant and a 72 kilometer transmission line.  Although the EBRD approved 
the loan in 1993, construction has not yet begun.  The EBRD held up disbursement 
of the loan while Armenia considered re-starting its Chernobyl-type Medzamor 
nuclear power plant.  In 1997, the Armenian government said the nuclear plant 
would close by 2004 if Hrasdan Unit 5 were completed in two years.  Armenia also 
announced this year that it would begin privatizing its energy sector, and will seek 
transnational bidders for existing power companies.  Hrasdan Unit 5 will be the first 
privately-owned power plant in the country.
Sources: EBRD; International Gas Report, April 30, 1993; Asia Pulse, June 20, 1997; 
Reuters, April 12, 1997; International Market Insight Trade Inquiries, Feb. 20, 1997; 
EIU ViewsWire, May 5, 1993 and April 25, 1995; Nucleonics Week, Sept. 15, 1994.


BELARUS

Type of Industry: 65 megawatt gas-fired power plant
Subsidized Project: Orsha Power Plant
Location: northeast Belarus 
Owner of Project: Ministry of Energy
TNC Involvement: GEC-Alsthom (joint-venture between GEC (UK) and Alsthom 
(France), providing two turbines and electrical equipment purchased with this loan.
Amount of Financing: $45 million
Date of Approval: December 1993 
Additional Financing: None
Notes: This loan secured GEC-Alsthom's first contract to build a power plant in 
Eastern Europe.  The power plant's natural gas fuel will be imported from Russia. 
Construction is due to be completed in 1998.  
Sources: EBRD;  Russia Express-Perestroika, January 17, 1994; EIU Business Eastern 
Europe January 3, 1994, May 13, 1996; The (London) Times, May 2, 1996; AFX News, 
May 1, 1996; AFP, May 1, 1996.

BULGARIA

Type of Industry: 215 megawatt coal-fired power plant
Subsidized Project: Maritza East II Power Project-Unit 8
Location: 240 km southeast of Sofia, Bulgaria
Owner of Project: National Electric Company of Bulgaria
TNC Involvement: While Bulgaria has invited bids from foreign corporations for 
the supply of equipment and services for this project, no specific corporate 
involvement has been reported in the media.
Amount of Financing: $46 million
Date of Approval: June 1992
Additional Financing: European Investment Bank.
Notes: The EBRD is financing the completion of the 215-megawatt lignite-fired 
power plant (Unit 8) within the Martiza East II power complex; the loan also funds 
the construction of an ash disposal site and rehabilitation of coal handling facilities 
for the entire complex.  The new unit will tap into local coal mines which hold an 
estimated two billion tons of lignite, or soft coal, which are expected to be burned for 
national energy needs for the next 100 years.   The project was delayed while the 
EBRD and World Bank pressured the Bulgarian government to raise electricity 
rates.   The Maritza coal-fired power complex, of which this is one piece, accounts for 
20% of Bulgaria's power production.  The Bulgarian government plans to continue 
to boost coal-fired power production to fuel industrial growth.  It is planning to 
rehabilitate 17 old coal-fired power plants by the end of the decade.  The EBRD is 
considering additional loans for the Martiza complex.
Sources: East European Energy Report, July 22, 1993, August 25, 1995; EBRD Watch, 
September 14, 1992; Reuter Business Report, Dec. 9, 1993; April 25, 1995, Sept. 11, 
1995; Dec. 13, 1995; International Market Insight Trade Inquiries, August 11, 1997.


GEORGIA

Type of Industry: 1,800 megawatt oil and gas-fired power plant
Subsidized Project: Gardabani Thermal Power Plant
Location: Gardabani, outside Tiblisi
Owner of Project: Sakenegro, Georgia's power utility
TNC Involvement: Foreign owners to be sought; GEA Energy System (India) sold 
$3.4 million condenser tube cleaning system under EBRD loan; AO Leningradski 
Metallichesky Zavod (Russia) sold $1 million turbine replacements under EBRD 
loan;  Siemens (Germany) won a contract to provide emergency repairs under a 
German government program.
Amount of Financing: $18.1 million
Date of Approval: December 1994
Additional Financing: World Bank ($52 million credit approved in June 1997); 
German government (Kreditanstalt fur Wideraufbau, $14 million loan in 1995); 
government of Georgia ($4.8 million).
Notes: Gardabani, Georgia's main power source,  is an aging complex of oil and gas-
fired power units.  As of June 1997, only three units, with a combined operating 
capacity of 620 megawatts, were running, with the rest of the plant suffering from 
disrepair.  Gas comes from either Turkmenistan or Russia.  The U.S. Agency for 
International Development has also shipped oil from the U.S. to Gardabani.  The 
EBRD loan was the leading edge of a wave of foreign government attempts to 
rehabilitate and privatize this power plant.. The government of Georgia is 
developing a privatization program, with Gardabani and its 1,800 megawatts of 
potential fossil fuel power generation capacity to be one of the first pieces to be sold.
Sources: EBRD; Journal of Commerce, Oct. 5, 1995; Manchester Guardian Weekly, 
June 11, 1995; International Market Insight Reports, June 6, 1997. EIU Business 
Eastern Europe, March 4, 1996; EIU ViewsWire, June 20, 1995; Power Generation 
Technology & Markets, June 13, 1997; Independent Power Report, May 16, 1997; 
Russia Express Briefing, Dec. 9, 1996.

HUNGARY

Type of Industry: Natural gas storage (150 million to 350 million cubic 
meters/annual flow) Subsidized Project: Zsana Gas Container Project  
Location: Zsana
Owner of Project: Hungarian Oil and Gas Ltd. (MOL), state-owned
TNC Involvement: Nis-Naftagas-Promet (Yugoslavia), owner of gas
Amount of Financing: $55 million
Date of Approval: December 1994
Additional Financing: World Bank ($27 million, loan approved in 1989) 
Notes:  MOL is building a new underground gas storage facility in depleted gas wells.   
The facility will be Hungary's second largest gas storage facility and will hold up to 
1.2 billion cubic meters of gas per year after its planned completion in 2000     The gas 
will be owned by Nis-Naftagas-Promet of Yugoslavia, which will pour 150 million 
cubic meters/year of  gas into the Zsana wells initially, with this flow reaching 350 
million cubic meters/year. The gas will be imported from Russia. Bankers 
considered the EBRD loan to be a "vote of confidence... about the upcoming 
privatization of MOL," according to the Budapest Business Journal.
Sources: Budapest Business Journal, April 1, 1994, March 31, 1995, June 17,
1996;  East European Energy Report, November 18, 1996; MTI Econews, Nov. 6, 1996

MACEDONIA

Type of Industry: gas pipeline (1.4 billion cubic meter annual throughput)
Subsidized Project: JP Gasificacjia
Location: Skopje
Owner of Project: JP Gasificacjia (GA-MA) a state company in charge of importing 
and transporting natural gas
TNC Involvement: Company to be offered to international bidders. Construction: 
Uraltransgas (Russia), Bulgargas (Bulgaria), Pietro Fiorentinni (Italy); Gazprom 
(Russia, gas supplier).
Amount of Financing: $33.9 million.
Date of Approval: December 1996.
Notes: The EBRD funded pipeline project is designed to bring Russian gas into 
Macedonia's capital city area and, eventually, other cities.  It is also designed to foster 
the privatization of GA-MA.  EBRD is supporting privatization by taking an equity 
stake in the company.  The main 100 kilometer pipeline, which opened in August 
1997, taps into Russian gas via pipeline connectors in Bulgaria, Romania and 
Ukraine.  The capacity of the pipeline is greater than Macedonia is expected to need; 
the excess is planned to be forwarded to Serbia and Albania.  This pipeline project 
may be carving a path for a future Bulgaria to Albania pipeline for crude oil from 
Azerbaijan, Russia, and Kazakhstan.  The initial consumers of the Russian gas in 
Macedonia were a chocolate factory, a tannery, a chemical plant and a brewery.
Sources: EBRD; International Gas Report, May 10, 1996, January 24, 1997; Eastern 
Europe Energy Report, March 19, 1996, September 1, 1997.

MOLDOVA

Type of Industry: Oil terminal (2.1 million tons/year)
Subsidized Project: Giurgulesti oil terminal
Location: Giurgulesti, 220km southwest of Chisinau, capital
Owner of Project: Terminal
TNC Involvement: Terminal is a Moldovan-Greek joint venture between 
Technovax (Greece), Tirex Petrol (Moldavia)
Amount of Financing:$14.8 million of $29.6 million
Date of Approval: December 1996
Additional Financing: Technovax, The National Bank of Greece, The Commercial 
Bank, The General Hellenic Bank
Notes: The EBRD is funding the development of an oil terminal and pipelines on 
the Danube River.   The oil will likely come from Iran, with whom Moldavia 
recently signed a deal to import 2 million tons of oil within five years.  The German 
Dresdner Bank is backing the oil purchase with a $50 million loan.  Construction is 
expected to be completed by 1999.
Sources: East European Energy Report, August 25, 1995, May 24, 1996; December 20, 
1996; International Market Insights and Trade Inquiries, March 7, 1997; Russia 
Express Briefing, July 29, 1996.

POLAND

Type of Industry: Power plant generator manufacturing plant
Subsidized Project: ABB Dolmel
Location: Wroclaw, Poland
Owner of Project: Asea Brown Boveri
TNC Involvement: Asea Brown Boveri (Switz/Sweden)
Amount of Financing: $6.6 million
Date of Approval: December 1992
Notes:  The EBRD loan funded the expansion of a generator plant in Poland owned 
by energy giant Asea Brown Boveri.  This factory, taken over by ABB in 1990, makes 
generators for hydroelectric and fossil fuel-fired power plants, mainly in Poland and 
other Eastern European countries.  Poland, which is looking to rehabilitate 32,000 
megawatts of power capacity, is a prime target of ABB's equipment sales plans. In 
1994, ABB won a $363 million contract to replace two 200 megawatt coal-fired power 
plant generators at the Turow, Poland, power plant with two 235 megawatt 
generators.  Glen Liddy, an engineering analyst in London, told the Budapest 
Business Journal this year that, "in Europe,  ABB  is shifting manufacturing capacity 
out of Germany, Switzerland and Sweden to low-cost neighboring countries, and it's 
more likely they'll be going further east, not west, in the next three or four years."
Sources: EBRD; Financial Times (London), Nov. 8, 1994, June 26, 1996, June 19, 1997; 
The Warsaw Voice, December 13, 1992; Budapest Business Journal, June 16, 1997; 
Polish Press Agency, April 29, 1992.



ROMANIA

Type of Industry: Coal-fired power plant rehabilitation (1,400 megawatts)
Subsidized Project: Regia Autonoma de Electricitate (RENEL, state utility)
Location: throughout Romania
Owner of Project: RENEL
TNC Involvement: GEC/Alsthom (UK/France joint-venture) Potential 
suppliers/investors:  Lahmayer (Germ), ABB (Switz/Sweden); Amoco (U.S.) 
Amount of Financing: $90 million.
Date of Approval: November 1995
Additional Financing: World Bank, EIB, PHARE, USAID.
Notes: The EBRD joined the World Bank's program to restructure and re-equip 
Romania energy sector its 1995 loan for the rehabilitation of four power plants.  The 
loan also targets upgrades at three transmission substations, and encourages private 
investment.  At the urging of EBRD and the World Bank, RENEL is undergoing 
privatization; the government is now encouraging fossil fuel power plant 
investments by foreign corporations, such as ABB and Amoco.  According to an 
October 8, 1997, EIU ViewsWire report, "US oil firm Amoco and Swiss-Swedish 
ABB  are currently building a greenfield power plant, with  EBRD  money." 
However, no record of EBRD lending for such a plant could be found in other 
literature.
Sources: EBRD; World Bank; East European Energy Report, November 27, 1995; 
March 19, 1996; Europe Energy, December 1, 1995; Financial Times, June 19, 1997; 
Euro-East, December 19, 1995; EIU ViewsWire, October 8, 1997.

Type of Industry: Oil field developments
Subsidized Project:   Petrom S.A. (Formerly Societatea Nationala de Petrol, 
Romania's national oil company).
Location: throughout Romania.
Owner of Project: Societatea Nationala de Petrol
TNC Involvement: Amoco, Shell, Enterprise Oil and Occidental hold oil 
exploration concessions in Romania.
Amount of Financing: $26 million (additional $300 to $400 million pending)
Date of Approval: September  1992.
Additional Financing: World Bank.
Notes: One of the EBRD's first fossil fuel loans was a $26 million package for the 
purchase of new equipment and spare parts for three oil fields (Berca, Braila and 
Gaesti) in Romania.  Romania hosts considerable reserves in the Black Sea.  The 
EBRD released the loans one month after the Romanian government awarded 
exploration concessions to oil transnationals Amoco, Shell, Enterprise and 
Occidental.   Since this initial loan in 1992, the EBRD has been pressuring Romania 
to privatize its national oil company. According to EEER, in May 1997, "Romanian 
media reported that during negotiations in London the EBRD recommended the 
establishment of a new, restructured national  oil  company before releasing a $400 
million credit line which  Romania is to use for the upgrading and privatization of 
its oil sector."  During these negotiations, Romania's Finance Ministry State 
Secretary Mircea Costea told the EBRD that their new policy involves making 
"Romania more attractive for foreign investors."   Three months after this report, 
the Romanian government announced that it decided to privatize much of its 
national oil company, and that "this project will be backed by the EBRD ($300-400 
million)."  The restructuring forced the closure of three refineries in the countries, 
leading to widespread strikes.  According to one press account, "A delegation headed 
by government secretary-general Remus Opris went to Ploiesti to explain to workers 
that it was not the government who shut down their companies, but the laws of the 
market economy."
Sources: EBRD; East European Energy Report, July 8, 1992, Aug. 19, 1992, May 28, 
1997, Aug. 1, 1997; European Energy, July 16, 1992; Sept 19, 1997; Rompres news 
agency, August 19, 1997; Reuter European Business Report, April 13, 1997; Financial 
Times, July 8, 1992; EBRD Watch, July 6, 1992.


RUSSIA

Type of Industry: Oilfield development; oil spill cleanup
Subsidized Project: KomiArcticOil
Location: Upper Vosey Silurian oilfield in Usinsk
Owner of Project: KomiArcticOil (KAO) 
TNC Involvement: KAO was originally a joint venture between British Gas (25%), 
Gulf Canada (25%), and Russian concerns Ukhtaneftegasgeologia and Komineft; 
AES/Hartec (U.S., Australia), was contracted to assist with the oil spill clean-up.
Amount of Financing: $80 million (1994), $25 million (1995).
Dates of Approval: February 1994, May 1995.
Notes: The EBRD pumped big money into the Upper Vosey Silurian oilfield on the 
Arctic Komi Peninsula in February 1994.  "We are delighted that the EBRD  has 
chosen to participate in financing this project," said Chuck Shultz, Gulf's President 
and CEO and  KomiArcticOil's Chairman: "The joint venture offers opportunities to 
work with  our Russian partners in applying Western experience and technology to 
maximize recoveries in this proven resource base."
"We are proud to be a key part of this important undertaking," said Randal Fischer,  
EBRD's  Head of Natural Resources. "This important private sector investment 
project in Russia's oil sector provides exactly the combination of essential 
components which the bank is striving to foster: development of a sound 
commercial opportunity; strong Russian and foreign equity sponsorship; a forceful 
and effective joint management team; and application of a 'best practices' way of 
doing business, which affords useful sharing of both foreign and Russian 
technology, management and systems." 
Seven months later, the EBRD's pride turned to shame when an ecological disaster 
became evident.  A pipeline carrying oil from the multinational-operated oilfield 
leaked an estimated 300,000 tons of oil over a period of months, beginning in 
February 1994 -- the very month that the EBRD announced its loan to the oil field 
project.  The oil companies kept pumping oil through the faulty pipeline until 
October 1994, when they claimed they first learned of the leaks.   The resulting oil 
spill -- several times larger than the Exxon Valdez disaster -- flooded tundra, 
marshes and rivers.  While the multinationals blamed the Russian pipeline 
operators for the spill, and pulled out of the venture,  the EBRD deserves a goodly 
share of international outrage.  In 1995, the EBRD approved an emergency loan (less 
than one-third the size of their production loan) for assistance in cleaning up the 
spill.    "There are always lessons to be learnt," lamented an EBRD official.
Sources:  The (London) Times, Nov. 14, 1994.  Extel Examiner, August 6, 1993; 
Canada NewsWire Ltd., August 5, 1993; WorldPaper, February 1996; Reuters, August 
28, 1995.


Type of Industry: Arkhangelsk oilfield development.
Subsidized Project: Polar Lights Company development .
Location: Ardalin oilfield, Timan Pechora.
Owner of Project: Polar Lights Company.
TNC Involvement: Polar Lights is a joint venture between Conoco (US, subsidiary 
of DuPont) and Komineft (Russia).
Amount of Financing: $90 million.
Date of Approval: September 1993.
Additional Financing: IMF, OPIC.
Notes: The Ardalin oilfield holds oil reserves of 110 million barrels, and the EBRD 
loan is to develop and export them through the Polar Lights joint venture.  Located 
1,000 miles northeast of Moscow, Ardalin was the first major oilfield in the remote 
Arctic Arkhangelsk region to be developed. "We always had an interest in Timan-
Pechora. The fields are certainly greater than most of those you will find in North 
America," said Archie Dunham,  Executive Vice-President of Conoco Inc, in 1994. 
"Ardalin  is a proving grounds for us.  We won't stop at this, and if the project 
proves as successful in an economic sense as it has been technically, I  can foresee 
our company's participation in the joint development of not only oil but also gas 
deposits, in the construction of oil refineries, and in the expansion of our area of 
operations beyond the Timan-Pechora basin and into Siberia and the Caspian 
region," Conoco executive Konstantin Nikandros told Izvestia in September 1994, as 
the first oil began to flow from the Polar Lights venture.   "Greenfield oilfield 
development projects such as Polar Lights can provide the necessary foundation for 
the long-term increase in Russian oil production," said Azam Alizai, director of  the 
IFC Oil, Gas and Mining Department, in 1993, when the World Bank agency, EBRD, 
and OPIC announced their $210 million in combined lending to the Polar Lights 
project. 
Sources: Financial Times (London) May 26, 1993; Journal of Commerce , September 
1, 1994; Extel Examiner, April 2, 1997; Financial Times, March 19, 1996; Tass, October 
26, 1994; The (Glasgow) Herald, Sept. 29, 1994; Current Digest of the Post-Soviet 
Press, Sept. 28, 1994; Moscow News, Sept. 16, 1994; Interfax news agency, Sept. 15, 
1993; Reuter, July 1, 1993.


Type of Industry: oil field development.
Subsidized Project: Geolibent.
Location: North Gubkinskoye and Prisklonovoye oil and gas fields, western Siberia
Owner of Project: Geolibent Joint Venture.
TNC Involvement: Geolibent is a JV between Benton Oil (US, 34%), 
Purneftegasgeologia Industrial Association (Russia, 33%), and Purneftegaz (Russia, 
33%, subsidiary of Rosneft oil company).
Amount of Financing: $55 million loan.
Date of Approval: November 1996.
Additional Financing: The World Bank has loaned Purneftegaz money for boosting 
production in several oil fields, including North Gubkinskoye.
Notes: The North Gubkinskoye field holds estimated reserves of 344 million barrels 
of oil.  The EBRD has promoted this loan as a catalyst to "revive idle oil wells and 
exploit new ones." Benton constructed a 37-mile pipeline connecting the North 
Gubkinskoye fields with the Soviet pipeline system that brings oil to refineries in 
the Czech Republic, Slovakia and Germany. The pipeline was built in Texas and 
installed by a Russian company.  Benton, the U.S. investor in the oil field, has 
abandoned its U.S. operations since the early 1990s in favor of Russian and 
Venezuelan oil fields.  Benton is also eyeing fields in China and Vietnam.     "We 
basically have had an opportunity to participate in projects over there that are of 
such a size (that would be impossible) to find in the United States," Alex Benton, the 
company's chairman, said in 1992.   After the EBRD loan was approved in 1996, 
Benton declared that "this transaction will provide the necessary  financing to 
accelerate development and immediately increase oil production from this giant 
west Siberia field." "The  development of these fields represents an additional step 
towards arresting the decline of Russia's oil production," said Ron Freeman, first 
vice president of the EBRD.   The oil is for domestic and foreign consumption.
Sources:  British Broadcasting Corp., July 8, 1993;  Los Angeles Times, Aug. 30, 1994; 
Reuters, Nov. 21, 1996, Feb. 20, 1997; Interfax news agency, Dec. 5, 1995; Calgary 
Herald, April 24, 1992; Chemical Business Newsbase, Oct. 21, 1997; International 
Trade Finance, Jan. 17, 1997; Platt's Oilgram News, Dec. 13, 1996; East European 
Markets, Dec. 6, 1996; Enhanced Energy Recovery News, Dec. 1996; Oil Daily, Jan. 17, 
1996.

Type of Industry: oil field development.
Subsidized Project: Samotlar.
Location: Samotlar oilfield, western Siberia.
Owner of Project: Chernogorneftegas (March 1997 loan); Samotlor Pan-Canadian 
(February 1994 loan).
TNC Involvement:   Chernogorneftegas is a subsidiary of Russian oil giant Sidanko, 
in which British Petroleum is attempting to invest.  Samotlar Pan-Canadian is a 
joint venture between Canadian Fracmaster (Canada) and Samotlar Services (in 
turn, a JV between Gulf Canada, Canadian Fracmaster, and 
Nizhnevartovskneftegaz).
Amount of Financing: $8.25 million (February 1994) and $50 million credit (March 
1997)
Date of Approval: March 1997.
Additional Financing: U.S. Export-Import Bank
Notes: The EBRD has extended two loans toward the development of the massive 
Samotlar oilfield in western Siberia.  The first loan, "to enhance oil production," 
was extended in 1994.  The second, "to develop and update production process(es) 
and carry out environmental projects," was approved in March 1997.  Samotlar's 
proven deposits are a weighty 1.2 billion tons of oil.
Sources: Hart's Daily Petroleum Monitor; British Broadcasting Corporation, March 
28, 1997; Euromoney, March 1996; Russia Express-Perestroika, April 24, 1995, Oct. 23, 
1995; APS Review Oil Market Trends, Sept. 19, 1994; Interfax news agency, March 24, 
1997; Moscow Times, March 22, 1997.

Type of Industry: Oilfield development.
Subsidized Project: Chernogorskoye field.
Location: West central Siberia.
Owner of Project: Chernogorskoye.
TNC Involvement: Chernogorskoye is a joint venture between Chernogorneft 
(Russia), Anderman Smith Overseas (US), and Itochu (Japan).
Amount of Financing: $40 million credit
Date of Approval: June 1993
Additional Financing: The US Import-Export Bank, U.S. OPIC
Notes:   The Chernogorskoye field, located just north of the massive Samotlar field 
(see above), holds an estimated 100 million barrels of oil. All of the drilled oil is 
exported to Europe.  At the beginning of 1997, the joint venture was pumping out 
350,000 barrels of oil per month.  The 1993 loan was the EBRD's first for a private oil 
development in Russia. 
Sources: Denver Post, Jan. 13, 1997; Interfax news agency, June 4, 1993; Financial 
Times, June 5, 1993; Japan Economic Newswire, Oct. 29, 1992, June 4, 1993.

Type of Industry: oilfield development
Subsidized Project: Magma Oil
Location: Yuzhnoye oilfield, western Siberia
Owner of Project: Magma Oil
TNC Involvement: Magma Oil is a majority-owned subsidiary of Vanguard of 
Australia/U.K.  Petro-Hunt (U.S.) also has an interest in Magma.
Amount of Financing: $53 million
Date of Approval: May 1995
Notes: The West Siberian field of Yuzhnoye, owned by Magma Oil, holds over 62 
million barrels of proven reserves.  The EBRD required Russia to exempt Magma 
from national export taxes that normally apply to crude oil exports, according to 
Platt's Oilgram News.  Australian/British TNC Vanguard acquired a controlling 
interest in Magma Oil in early 1994.  Magma also holds the production license for 
the Orekhovskoye oilfield, 25 kilometers northwest of Yuzhnoye, and interests in 
nine other fields. 
Sources: East/West Commersant June 15, 1995; Extel Examiner, Feb. 2, 1994, Sept. 13, 
1994;  Jan. 18, 1996; Oil & Gas Journal, June 26, 1995; Platt's Oilgram News, April 13, 
1995; Jan. 19, 1996; Feb. 13, 1997; AP Newsfeed, Sept. 18, 1997.

Type of Industry: oil and gas field development
Subsidized Project: Vasyugan Services
Owner of Project: Vasyugan Services
TNC Involvement: Vasyugan Services is a joint-venture between Canadian 
Francmaster Ltd/Samotlor Services
Amount of Financing: $8.7 million
Date of Approval: December 1994
Additional Financing: IFC
Notes: The EBRD loan financed the development of existing oil and gas wells in 
Tomsk Oblast, which are tapping into 29 billion cubic meters of gas and 4 million 
tons of gas condensate in reserve.
Sources: ITAR-TASS News Agency, June 30, 1993; EBRD.

Type of Industry: Oil refinery (2 million tons/year flow).
Subsidized Project: Achinsk Refinery.
Location: eastern Siberia, near Krasnoyarsk.
Owner of Project: East Oil Co. (Russia).
TNC Involvement: Bechtel (UK), Encon System Ltd (UK).
Amount of Financing: $41.6 million.
Date of Approval: April 1996.
Additional Financing: Moscow International Bank, Moscow Narodny Bank.
Notes: The EBRD loan is to be used to purchase a vacuum distillation unit and a 
delayed coker unit at the Achinsk refinery.  The Bank touted the loan as a safety 
measure.  "Oil refining is pretty dangerous, so we are trying to bring international 
standards in this business," Sergei Popov, head of  EBRD natural resources 
department, said in 1996.  Another EBRD official, Vittorio Jucker, in 1997 said the 
bank could "act as a pioneer" in financing Russia's downstream fossil fuel sectors.
Sources: EBRD; Moscow Times, July 30, 1996.  East Europe Industrial Monitor, Feb. 1, 
1994; Platt's Oilgram News, June 26, 1997.

Type of Industry: oil transport (11 tankers, estimated 4.4 million tons/annual 
carrying capacity)
Subsidized Project: Novorossiysk Shipping Co. (Novoship)
Location: Russia
Owner of Project: At least 50% government-owned.
TNC Involvement: Novorossiysk rents oil tankers to Mobil and Exxon; Croatian 
shipbuilding companies built the vessels.
Amount of Financing: $60 million
Date of Approval: December 1995
Notes: Novoship, which ranks as the 10th biggest fleet in the world measured by 
capacity, operates 81 vessels. The 11 new EBRD-funded tankers are Croatian-built 
double-hulled specifically constructed to transport oil products and hold up to 40,000 
dead weight tons each. Novoship "rents its vessels to oil multinationals like Exxon 
and Mobil," according to the Moscow Times.
Sources: Traffic World, March 8, 1996; The Moscow Times, Jan. 6, 1996; South China 
Morning Post, March 1, 1996.

Type of Industry: Rail cars for oil shipments (estimated 812,000 tons/year)
Subsidized Project: SFAT/Transfat
Location: Throughout Russia
Owner of Project: Sovfinamtrans (SFAT)/Transfat
TNC Involvement: Transfat is a joint venture between EBRD (10%), Trancisco 
Industries (U.S., 23%), HAKA Group (Finland), and SFAT (40% owned by Russia's 
Ministry of Railways). 
Amount of Financing: $42 million ($30 million loan; $12 million equity)
Date of Approval: April 1996
Notes: This loan finances the purchase of 1,500 rail cars fitted with Trancisco's 
heating system.  The rail cars will enter a fleet of thousands of rail cars used to ship 
oil from Russia, mainly to Europe.  An estimated 812,000 tons of oil/year will be 
shipped via these rail cars, given a rate of 1.1 million tons hauled by 2,032 rail cars 
already dedicated for export.  The EBRD-financed cars will bring the total Russian 
petroleum and petrochemical rail car fleet to 7,000 cars. 
Sources: Interfax News Agency, April 26, 1996; ITAR-TASS, April 26, 1996; Euro-East, 
July 16, 1996; PR Newswire, April 25, 1996; Financial Times (London) , March 20, 
1991.


SLOVAKIA

Type of Industry: Oil refinery.
Subsidized Project: Slovnaft Refinery.
Location: Bratislava.
Owner of Project: Slovintegra (joint stock company involving managers of 
Slovnaft)/National Property Fund (FNM).
Amount of Financing: $56 million equity.
Date of Approval: December 1994.
Notes: In 1995, the EBRD purchased 10.5 percent in shares in the Slovnaft refinery 
from Slovakia's National Property Fund (FNM). The EBRD was not pleased, 
however, to find that it had been charged 1,000 korunas per share, while others 
purchased shares at 165 korunas.  The EBRD began talks with Slovnaft in early 1997 
in an attempt to sell its shares back to the FNM. The refinery has a throughput 
capacity of 115,000 barrels per day.  In 1995, half of its production of 5.3 million tons 
was exported to 36 countries.
Sources: EBRD; The European, Nov. 14, 1996; The Prague Post, Apr 16, 1997; Finance 
East Europe, June 6, 1997; Platt's Oilgram News, March 7, 1996.


UKRAINE

Type of Industry: Oil and gas production.
Subsidized Project: Poltava Petroleum Company.
Location: Ignatovskoye oil and gas field, Poltava.
Owner of Project: Poltava Petroleum Company.
TNC Involvement: Poltava is a joint-venture of JKX Oil & Gas (UK, 49%) and 
Poltava GazProm, a subsidiary of Poltavaneftegazgeologia/Ukraine State Property 
Fund.
Amount of Financing: $8 million
Date of Approval: April 1995
Notes: The EBRD's funding "is being used for the drilling of four new wells, 
connecting these wells to the operation and production base, and constructing a 
pipeline and rail export facilities. Daily production from the field is expected to reach 
4,000 barrels of oil and 45 million cubic feet of natural gas in the first phase," 
according to the EBRD.  The Ignatovskoye field holds reserves of 1.1 trillion cubic 
feet of gas and 51 million barrels of oil and condensates.   Oil and gas development 
by the owners of the project may soon spread into the Black Sea. 
Sources: EBRD, Russia Express-Perestroika, June 5, 1995, Oct. 23, 1995; East European 
Energy Report, May 22, 1995, May 28, 1997; APS Review Gas Market Trends, Sept. 16, 
1996; International Trade Finance, May 5, 1995.


Type of Industry: Coal-fired power plant (210 megawatts).
Subsidized Project: Starobeshevo Power Plant.
Location: Donbas region, southwestern Ukraine.
Owner of Project: Donbasnegro Genco, state-owned thermal power generator.
TNC Involvement: Ukraine has requested international bids to replace the boiler.  
Winning bids are expected to be selected by the end of 1997.
Amount of Financing: $113 million.
Date of Approval: December 1996.
Notes: The project is to replace a 200-megawatt pulverized coal boiler at the power 
plant with a 210-megawatt atmospheric circulating fluidised bed boiler.  The owners 
plan to replace its normal fuel (expensive, hard coal) with low-grade product and 
coal washings.   John Besant Jones, an EBRD banker, says "They have 10 million 
metric tons of the stuff."
Sources: The British Broadcasting Corporation, May 24, 1995; EBRD; International 
Market Insight Trade Inquiries, April 16, 1997; EIU Business Ukraine, Feb. 10, 1997; 
Coal Week International, Jan. 21, 1997.


UZBEKISTAN

Type of Industry: Oil refinery.
Subsidized Project: Fergana Refinery Rehabilitation Project
Location:  Fergana.
Owner of Project: Uzbekneftegas, national corporation for oil and gas industry of 
Uzbekistan
TNC Involvement: Mitsui (Japan), to install equipment, will subcontract with Toyo 
Engineering (Japan); Texaco (U.S.) may take over ownership of the refinery; Enron 
(U.S.) may develop local oil and gas fields.
Amount of Financing: $90 million.
Date of Approval: January 1997.
Additional Financing: Export-Import Bank of Japan; OPIC.
Notes: The EBRD loan is financing the regearing of the state-run refinery, which 
will allow it to process high-sulfur crude from a local oil field, rather than low-
sulfur Russian crude.  The installation of a desulfurization unit will compensate for 
the higher sulfur content of the local crude.   A twin objective, according to the 
Bank, is "supporting commercialization of the sector and Uzbekneftegas."  The 
refinery is the only such facility in the country and processes 6 million tons of crude 
annually.
Sources: EBRD; International Market Insight Trade Inquiries, March 18, 1997; Russia 
Express Briefing, Dec. 9, 1996; Energy Alert, November 19, 1996; East European 
Markets, August 30, 1996; Oil Daily, June 25, 1996.

1	1995 annual fossil fuel emissions were 6.24 billion tons of carbon. Source: 
International Energy Outlook, April 1997, p. 138.
2	EBRD's Environmental Mandate, September 1996. 
3	EBRD, Transition.
4	 "Foreign Investments and the Future of the Russian Oil and Gas Industry," 
Taiga News, no. 13, March 1995, Alexei Grigoriev, Socio-Ecological Union of Russia.
5	The "World Bank Group" includes the World Bank (IBRD), the International 
Finance Corporation (IFC), the International Development Association (IDA), and 
the Multilateral Investment Guarantee Agency (MIGA).
6	1995 annual fossil fuel emissions were 6.24 billion tons of carbon. Source: 
International Energy Outlook, April 1997, p. 138.
7	See, "The World Bank and the G-7: Changing the Earth's Climate for 
Business," by Daphne Wysham and Jim Vallette, version 1.1, August 1997. The full 
report is available on the web at: <http://www.igc.org/ifps/>.
8	"Foreign Investments and the Future of the Russian Oil and Gas Industry," by 
Alexei Grigoriev, Socio-Ecological Union of Russia.
9	The New York Times Atlas of the World, p. 31.
10	EBRD Watch, July 6, 1992
11	 As reported by International Gas Report (March 6, 1992).
12	EBRD, Transition.
13	 Asia Times , April 14, 1997
14	 EEER, March 19, 1996
15	 EEER, September 1, 1996.
16	 International Power Report, June 13, 1997; EIA ViewsWire, Oct. 8, 1997. 
17	 EBRD; Emerging Markets Week, July 28, 1997.
18	 EBRD; Eastern European Energy Report, July 1995.
19	In fact, at least $100 million from a recent $500 million dollar loan by the 
World Bank to privatize the Russian coal sector has disappeared into corrupt 
government officials' bank accounts, according to Business Week (Sept. 8, 1997).
20	 "Foreign Investments and the Future of the Russian Oil and Gas Industry," 
Taiga News, no. 13, March 1995, Alexei Grigoriev, Socio-Ecological Union of Russia.
21	June 31, 1997, letter from Pacific Environment Resource Center and other 
NGOs to EBRD Directors.