BAKU, Azerbaijan, November 25. The European Investment Bank’s (EIB) Energy Lending Policy of not funding unabated fossil fuels remains in place and unchanged, the Bank told Trend Nov.25.
“Our support will focus on the decarbonisation of the energy sector (renewable energy, energy efficiency and innovation), where we see the biggest need for and impact of our financing to achieve the global climate goals and energy security (of supply),” said the EIB.
Over the last five years, the EIB invested approximately $72 billion (€65 billion) in the energy sector, with large sums dedicated to renewable energy, energy efficiency, and energy distribution. EIB’s energy project funding has historically favored renewable projects but has also invested in fossil fuel projects. The NGO Bankwatch estimates that the EIB invested nearly $15 billion (€13.5 billion) in fossil fuel projects between 2013 and 2018. The recently published Policy, however, marks an ambitious shift away from fossil fuel funding, and towards enhanced environmental sustainability and climate action.
The Policy is best understood against the backdrop of broader EU leadership on climate action. The Policy aligns itself with the goals of the Paris Agreement and praises more ambitious EU goals regarding emissions. The EU has adopted targets for 2030 to reduce greenhouse gases by 40% compared to 1990 standards, to reach a 32% share of renewable energy consumption, and to achieve energy savings and an energy efficiency target of at least 32.5%, although it is unclear what the intended baseline would be for such savings. The Policy shows the EIB’s desire to help achieve these goals and to operate within the legislative framework of EU Directives and Regulations that are seeking to achieve them. While the EIB acknowledges that the majority of investment will need to come from the private sector, it sees its role as a public bank supportive to meeting this challenge. The Policy also highlights the importance of investment outside the EU and uses the UN Sustainable Development goals as a guide for its investments outside the EU.
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