Spain Gas Network Expansion II

Between 7 February and 2 March 2018, the Bank received 10 complaints of similar or exact content relating to the promotor’s expansion into newly licensed areas of the Canary Islands.

The complaints, in sum, make a number of allegations of non-compliance with EIB policy and its objectives, particularly as relate to EIB assessment and due diligence of the proposed financing:

Allegations concerning EIB/EU objectives and principles, particularly as relate to energy and climate mitigation
 

• The complainants allege the project contravenes international agreement obligations for the mitigation of greenhouse gases (GHG) signed by the EU or by the EIB. They claim this substantively undermines EIB’s policy priorities and objectives, particularly its fight against climate change. In addition, the complainants allege the project fails to comply with EU regional energy policy, specifically in relation to the outermost regions. They assert that this policy strongly prioritizes clean energy with emphasis on the reduction or replacement of fossil fuel consumption.
   
• The complainants allege EIB failed to fulfil its responsibilities to ensure compliance with EFSI principles in connection with the financing.
   

Allegations concerning the economic, environmental and social viability of the project
 

• The complainants believe the project lacks long-term vision and fails to consider wider environmental and economic sustainability factors in a number of respects. Firstly, the complainants allege that the assessment of GHG emissions was limited in scope, failing to consider emissions inherently associated with components of the LNG value chain (i.e. extraction, processing, transport and distribution). Secondly, they contend that renewable energy alternatives were not considered by the EIB in the context of the Canary Islands. The complainants consider EIB's investment to be counterproductive and to undermine global efforts to reduce carbon footprint. Thirdly, the complainants claim the due diligence process failed to evaluate consumer demand in the Canary Islands. They raise concerns about the potential cost to end-users and, in the second instance, impact on public finances resulting from the tariff deficit.
   
• The complainants contend that the promotor failed to adequately consult public and private sector stakeholders in order to ascertain the degree of community support for the project.
   

Conclusion
 

• The EIB-CM determined that the complaint met its admissibility criteria at a time when the programme components in question had been approved for financing, and an assessment of the complaint was initiated. In May 2019, the EIB-CM announced its decision to proceed with an investigation into certain allegations concerning the economic, environmental and social viability of the programme in what concerned the Canary Island components. Those allegations relating to the Bank's eligibility screening of the programme, i.e. programme consistency with EIB/EU objectives, particularly as relate to energy and climate mitigation, were closed at initial assessment.
   
• Based on discussions maintained and information received from the EIB during investigation, the EIB-CM learned that the Bank was no longer actively considering financing the Canary Island components under the Spain Gas Network Expansion II programme. 
   
• On 20 September 2019, the EIB-CM closed the remaining aspects of its investigation in the referenced case. This decision was reached subsequent to the EIB-CM's discussions with complainants and in considering the need to allocate its resources efficiently across its portfolio of complaints.