European and Chinese Environmental and Social Safeguards in International Development – A Qualitative and Quantitative Comparative Analysis and Case Study of a 50 MW Photovoltaic Project in Albania

Abstract

This Master’s thesis explores differences in environmental and social (E&S) safeguard approaches applied by international development financiers in Albania, a country situated at the intersection of European institutional frameworks and Chinese policy-bank financing under the Belt and Road Initiative. The thesis examines how variations in institutional design, transparency,and regulatory practice may influence sustainability-related outcomes in development finance.The research adopts a two-layered mixed-methods design. First, a qualitative comparative analysis examines the European Bank for Reconstruction and Development’s (EBRD) Environmental and Social Requirements (ESR1–10, excluding ESR9) in relation to financing practices associated with the China Development Bank (CDB) and relevant international treaty commitments, drawing on approximately 40 international case studies. Second, a quantitative portfolio-level model estimates relative E&S risk exposure between 2010 and 2023 using proxies for sectoral risk, project size, and host-country governance quality. These results are subsequently applied to a hypothetical 50 MW photovoltaic park in Fier, Albania as an illustrative“stress test” of institutional approaches.The qualitative findings indicate that while the EBRD maintains a comparatively comprehensive safeguard framework and formal accountability mechanisms, practical implementation may be affected by monitoring limitations and political constraints. In contrast, available evidence suggests that the CDB’s overseas lending framework is characterized by lower transparency and a stronger reliance on host-country regulatory systems, which in some contexts may be associated with weaker enforcement capacity. The quantitative analysis further suggests that Chinese policy bank portfolios tend to display higher modeled average E&S risk exposure and agreater presence in countries with lower institutional quality, as measured by Worldwide Governance Indicators (WGI) of the World Bank, relative to the EBRD.Applied to the Albanian case study, the analysis indicates that EBRD financing may offer stronger potential alignment with environmental and social standards when accompanied by robust oversight, whereas CDB-linked financing could be more closely shaped by domestic regulatory conditions, potentially increasing exposure to environmental and social risks.The thesis concludes that limited availability of standardized, project-level E&S data represents a significant structural constraint in development finance research and oversight. Sustainability outcomes therefore appear to depend not only on institutional frameworks, but also on transparency practices, implementation capacity, and political commitment.