A group of civil society organisations has called on the World Bank to postpone approval of a USD 195.5 million loan for new gas infrastructure in Serbia and reconsider the project’s justification, alternatives and compatibility with climate objectives.
The Ministry of Mining and Energy responded by pointing, among other things, to the fact that project preparation followed World Bank procedures, including analyses of justification and alternatives and environmental and social assessments.
But how much reassurance should that provide?
International financial institutions can bring expertise, stronger standards, better project preparation and oversight. But their involvement is not a proof that a project represents the right public choice, or that every analytical conclusion underpinning it is correct.
Our recent experience with another World Bank-supported project in Serbia illustrates why.
Under the SURCE project, which supports household energy-efficiency investments, implementation reports attribute substantial reductions in greenhouse-gas emissions to the installation of more than 2,000 natural-gas boilers.
We found this result surprising and asked the World Bank for the methodology, assumptions and underlying data that would allow the findings to be independently assessed. Our correspondence with the World Bank is published here.
The World Bank explained that the reported CO₂ savings from gas boilers reflect the replacement of less efficient or higher-emission solid-fuel heating systems, predominantly wood and, to a lesser extent, coal.
There lays a problem worth investigating. The Serbian methodology cited in the same response assigns a CO₂ emission factor of zero to wood-based fuels.
This does not prove that the reported results are wrong. Perhaps the underlying household-level data and calculations explain the apparent contradiction. But perhaps they do not explain the contradiction and prove the reported results wrong.
But we cannot check.
The underlying dataset has not been published. The implementation reports do not provide sufficient information to independently reproduce the results. And when we asked the World Bank about the analytical basis, the explanation provided to us came from the Ministry, the implementing authority whose project’s results are being assessed.
This experience is particularly relevant when World Bank due diligence is now invoked as reassurance concerning another, much larger gas investment.
Due diligence is indispensable. But due diligence should not require the public to solely trust the institution performing it. Important assumptions, alternatives, evidence and conclusions should be open to independent scrutiny.
As we argue in RES Foundation’s new Public Project Dossier, transparency is not an ornament added to a project. It is how the project’s purpose, distribution of benefits and resilience to risk are tested.
This principle applies equally to governments, consultants and international financial institutions.
When public money is spent, and particularly when loans will be repaid by future generations, knowing that somebody performed a check is not enough.
We should be able to check the check.