By Toby McIntosh
The European Bank for Reconstruction and Development (EBRD) has committed to release more information about the projects it funds and their impact.
These proactive disclosure practices have been “significantly improved,” according to Nina Lesikhina, Policy Officer for CEE Bankwatch Network.
Following an 18-month review, the EBRD on Nov. 5 announced a revised Access to Information Policy and a related “directive” that_ describes specific documents to be released proactively. (Click on policy link to see the directive.)
Lesikhina told Eye on Global Transparency about positive changes, including “a range of new requirements on disclosure of the Bank’s due diligence methodologies: the Bank’s approach to attributing the green finance component of its investments; for determining the Paris alignment of its investments and its internal activities; and for assessing the expected transition impact of its projects.”
She also welcomed additional requirements to publish the amounts of project-related technical assistance funding and to expand other project-level disclosures. Lesikhina’s full assessment is reprinted below.
CEE Bankwatch Network and other nongovernmental organizations had advocated for many transparency changes at the London-based international financial institution. (See June 14, 2024, EYE article.)
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No Expansion on Disclosures by Financial Intermediaries
One unfulfilled, long-standing NGO request was for more information about projects managed by “financial intermediaries” (FIs). These intermediaries, typically private banks, are contracted to allocate EBRD funds (about 60 percent of the EBRD portfolio). Regarding FI activities, critics asked for core project information and documentation about the environmental and social consequences for higher-risk projects.
However, the EBRD Board, citing practicality, declined to make changes. In an explanation, the Bank said:
The vast majority of sub-borrowers of our intermediated finance are micro, small and medium-sized enterprises (MSMEs). Therefore, the environmental and social risk profile of those projects is mostly low to medium risk. For MSME loans, it is not practical nor feasible to disclose information on each individual subinvestments, and in many jurisdictions not legal.
Access Policy Largely Unchanged
The information access policy itself does not appear to have been significantly altered. It governs what exemptions to disclosure are allowed when requests for documents are made. In its 2023 report about access to information, the EBRD reported 923 requests.
The EBRD said it that has provided “better definition of the harm protected against in the exceptions associated with deliberative information, financial and confidential information, and investigative processes.”
The Bank, as it had in its draft proposal, dropped the so-called “negative” override, which allowed it to deny disclosure on general public interest grounds.
The EBRD retained the so-called third party veto provision, which largely prevents access to information provided to the EBRD by third parties, such as governments and corporations. This provision covers information that the owner has given to the Bank subject to a confidentiality agreement or otherwise with the “legitimate expectation” that such information would not be disclosed. This clause is tweaked ever so slightly. If the information is requested the EBRD will “seek consent for disclosure.”
On another matter, the Bank resisted suggestions that it moderate a clause stating that it is not required to “create or develop information or data that does not already exist or is not available in the Bank’s record keeping systems” to respond to a request. This exemption, it was suggested, should not apply to situations where the Bank can, using automated tools, extract, using a reasonable amount of effort, the sought-after information from information or data it holds.
Although no policy change was made, the Bank commented, “The Bank will consider this on a case-by-case basis as a matter of good practice.”
A few good-housekeeping practices were adopted. For example, the Bank agreed that reasons for denials, even for partial denials, should be provided.
But the Bank did not change the deadline for response to requests from 20 to 10 working days, as suggested. The Bank can delay the response beyond that deadline.
The creation of an independent panel to hear appeals was a suggestion not accepted, with the Bank noting that since 2019 it has not registered any appeals.
Lesikhina Comments in Full
Here are the key observations from Lesikhina:
- There is now better wording on information accessibility (official national language(s) of the location(s) affected by the project vs national language), proactive disclosure and public interest override (negative override was removed but disclosure exceptions remain with extra explanation on the grounds).
- Significant attention is paid to the impact-related information disclosure. A dedicated section was introduced to require reporting on the EBRD’s impact at the portfolio level, and country results snapshots, demonstrating achievements, and information on selected impact case studies showcasing transition outcomes and impacts; and an annual update of the Risk Appetite Statement
- Overall, the revised policy secures the disclosure practices that have been in place already for a while, such as the publication of evaluation reports produced by the Evaluation Department, pre-consultation outreach to civil society to inform the draft Country and Sector strategies (Stakeholder Engagement Plan is required now), management responses to the IPAM; or come from the recent reporting commitments (such as ISSB, IATI).
- There is a range of new requirements on disclosure of the Bank’s due diligence methodologies: the Bank’s approach to attributing the green finance component of its investments; for determining the Paris alignment of its investments and its internal activities; and for assessing the expected transition impact of its projects.
- The key improvements imply the improved project-level disclosure which we welcome very much. In particular, additional requirements to publish the amounts of project-related technical assistance funding; separate PSD for grant-funded technical assistance activities exceeding €75,000 (vs 300,000 euro in 2019 Policy); a broader list of ESIAs for A Cat, including management plans, ESAP and its implementation report; a broader list of project documentation for high-risk B Cat, including NTS, key ESAP measures, SEP (we have to wait for the final ESP to see what kind of project fall under this category); information on the ESMS and its implementation for FI; and ex-post summary assessment of a project after project completion.
- The majority of our recommendations have been addressed to some extent, but some remain not such as disclosure of the loan agreements; better disclosure on FI – sponsor, name, location, and cost of the sub-project, whether the sub-project is subject to an EIA.
