BAKU, Azerbaijan, November 18. As part of COP29 in Baku, Trend News Agency proudly presents COP for Hope, a special project offering an unparalleled platform to hear from world leaders and trailblazers in politics, economics, science, and ecology, all united by a shared commitment to addressing today’s pressing climate challenges.
Today, we are honored to speak with Vice-President of the European Investment Bank (EIB) Ambroise Fayolle.
In an exclusive interview with Trend on the sidelines of COP29, Fayolle noted that EIB is well represented at COP29.
"The European Investment Bank (EIB) is the European Union’s financial arm. For a third year in a row, more than 50% of our investments contribute to climate action and environmental sustainability, which amounted to nearly €50 billion in 2023. As always, the EIB is working closely with the COP Presidency, sharing the EIB’s experience in key energy sectors, specifically how we are working to scale up emerging technologies such as green hydrogen and energy storage, both of which will be key to the green transition in the future. The EIB is well represented at COP29, and we are sharing our experience in mobilising private climate finance and showcasing concrete and transformative solutions to help countries and the private sector to accelerate climate action, while ensuring a just transition leaving no people or places behind," he said.
Climate Finance Action Fund initiated by Azerbaijan
Fayolle noted that the Climate Action Fund presents a novel approach.
"The agreement at COP28 to transition away from fossil fuels was a welcome step forward but long overdue. Action must now follow words. In this regard, the Climate Action Fund presents a novel approach where fossil-fuel producing countries and companies are invited to finance climate action mitigation and adaptation projects in developing economies. We welcome initiatives to explore new approaches to help bridge the climate finance gap," he said.
Tasks of multilateral financial institutions to achieve tangible results at COP29
"The EIB has observer status at the United Nations Climate Change Conference, so we are not directly involved in the negotiations. However, the important role of multilateral development banks is understood by the negotiation community and that’s why there is a call for these banks to do more. As multilateral development banks, we are making progress. In September, development banks announced two records. First, climate financing of $125 billion for 2023. This is $25 billion more than in 2022. Second, the global private finance that will be mobilised by our investments nearly doubled to a record $101 billion. Nevertheless, we recognise that more needs to be done to meet the massive investment needs and achieve transformational change, particularly in developing countries.
Here at COP29, multilateral development banks announced that as we move forward into the second half of the critical decade, we estimate that by 2030, our annual collective climate financing for low- and middle-income countries will reach $120 billion, including $42 billion for adaptation, and we aim to mobilize $65 billion from the private sector. For high-income countries, this annual collective climate financing is projected to reach $50 billion, including $7 billion for adaptation, and we aim to mobilize $65 billion from the private sector," he said.
In addition, Fayolle noted that multilateral development banks are working jointly to strengthen country-level collaboration and co-financing.
"At COP29, multilateral development banks have published our common understanding and the way forward on country platforms for climate action to deliver programmatic approaches and scale up impact. And finally, in order to maximise climate impact on the ground, and shift away from measuring climate finance volume only, multilateral development banks have presented a common approach to reporting climate impacts," said EIB's vice-president.
EIB support for Azerbaijan's green transition
Fayolle pointed out that in line with the European Union’s Economic and Investment Plan for Azerbaijan, the EIB stands ready to support Azerbaijan’s green transition.
"We are prioritising clean energy and sustainable transport investments, as well as digitalisation and access to finance for small and medium-sized enterprises. EIB Vice-President Teresa Czerwińska overseas financing operations in Azerbaijan, and at COP29 she met with Minister of Finance Samir Sharifov, Minister of Energy Parviz Shahbazov and Minister of Digital Development and Transportation Rashad Nabiyev to discuss cooperation arrangements.
Here at COP29, EIB Global, the EIB Group’s specialised arm dedicated to operations outside the European Union and a key partner of the EU Global Gateway strategy, signed a memorandum of understanding with the Republic of Azerbaijan to provide technical assistance and set up a cooperation framework for the preparation and appraisal of the upgrade, expansion and modernisation of Baku’s metro network," said EIB's vice-president.
In addition, as he noted, the EIB completed a ten-month assignment to help Azerbaijan improve railway safety and reliability.
"The EIB’s advisory support, the first completed under the Facility for Eastern Partnership Investment in Connectivity, resulted in recommendations that will guide Azerbaijan Railways in a project to improve operational safety while reducing travel times, costs and greenhouse gas emissions. Beyond supporting Azerbaijan’s green transition, earlier this year the EIB signed a €10 million loan agreement with Bank Respublika to support micro, small and medium-sized enterprises in Azerbaijan. The agreement will promote financial inclusion by providing loans to small businesses on preferential terms, with the option of disbursal in local currency, boosting investment, growth and employment," Fayolle explained.
EIB focus on green energy agenda of Central Asia
Fayolle noted that in Central Asia, EIB Global’s focus is in supporting a sustainable growth model.
"This includes promoting green infrastructure projects, such as energy efficiency, renewable energy, energy transmission, water supply and sanitation, and sustainable transport, as well as improving access to finance for small and medium-sized enterprises.
In Uzbekistan, EIB Global is supporting the construction and operation of three solar photovoltaic plants. The project will help to reach Uzbekistan’s target of using 25% renewable sources for electricity generation by 2030. At the same time, it will improve the quality of life for people in Uzbekistan by reducing carbon emissions and air pollution. Earlier this year, EIB Global agreed memorandums of understanding for co-financing sustainable transport projects of almost €1.5 billion with the Republic of Kazakhstan, the Kyrgyz Republic, the Republic of Uzbekistan and the Development Bank of Kazakhstan," he added.
EIB's plans to triple its funding for energy transition adaptation
EIB's vice-president noted that the Bank is working closely with the European Commission, as well as countries, cities and the private sector to finance adaptation measures.
"Last year, we devoted a record €2.7 billion to adaptation projects globally. We aim to do even more this year and in the years to come. A special focus of our activities are the most vulnerable places. For people living on small islands and in coastal regions, grappling with rising sea levels, extreme weather, and ocean warming, climate change is already an existential threat. The EIB is working with the Caribbean Development Bank to support climate-resilient water infrastructure across 14 countries. In Europe, the EIB is supporting countries affected by recent extreme weather events – in Central and Eastern Europe and Spain. These devastating floods show the urgency of investing in adaptation and resilience and that the effects of climate change are being felt in every corner of the world," he explained.
EIB's transformation into climate bank
Fayolle recalled that the EIB has been transforming itself into the climate bank over more than a decade of progress and substantial investment, tied to several milestones: the world’s first green bonds in 2007, the Bank's first Climate Strategy in 2015 in the wake of COP21 in Paris, its energy lending policy in 2019 that excludes financing of unabated fossil-fuel energy projects, and in 2020 the Climate Bank Roadmap, which led to the EIB became the first multilateral development bank to apply Paris alignment criteria to all its new financing operations since January 2021.
"Consolidating our role as the climate bank is priority number one of the EIB Group’s 2024-2027 Strategic Roadmap. Concretely, this means investment in physical infrastructure, such as interconnectors, grids, energy storage and renewables, will be reinforced, as will support for biodiversity, a circular economy, and nature-based solutions. Likewise, the EIB will step up its investments in research and development and its support for the whole value chain of key and emerging technologies for a net-zero economy under the EIB’s climate and energy lending strategy.
The mid-term review of our Climate Bank Roadmap has confirmed that the EIB Group is on track or has achieved its headline targets, including to achieve the goal of supporting €1 trillion of green financing this decade. But we won’t stop there. We are now working on our new strategic approach, which will guide our activities from 2025-2030. We will present it at the United Nations climate summit COP30 next year," he said.
Innovative financing models to make climate projects more accessible
"We must advance in innovative solutions to share risks that the private sector is not able to shoulder. This is our key role: to de-risk investments that make our lives and economies more sustainable. For example, the EIB is working closely with the European Commission and the private sector to de-risk investments and unlock finance for major breakthrough technologies that will make the green transition a success and strengthen economic competitiveness. We invest in green steel, circular battery gigafactories, green hydrogen, wind and solar panel technologies, and cutting-edge research and development.
To help countries free up fiscal space for climate action, we have announced that we will offer climate-resilient debt clauses enabling developing countries to suspend their loan repayments if they are struck by a natural disaster. To free up fiscal space for climate action, in Barbados, the Inter-American Development Bank and the EIB have approved guarantees totalling $300 million to support an innovative debt-for-climate operation that will help Barbados unlock much-needed resources to invest in critical climate adaptation projects, while safeguarding other priorities such as social spending on health and education," said EIB's vice-president.
In addition, Fayolle noted that international capital markets play a key role in mobilising green finance at scale.
"In October 2024, the EIB celebrated the unlocking of €100 billion of investor support for climate action and sustainability through its green and sustainability bonds since 2007. The EIB will continue to support the green transition by leading the emergence of a standardised green bond market. We are working with the European Commission on the Global Green Bond Initiative, a coalition of development finance institutions and multilateral organisations coordinated by the EIB. A dedicated de-risked fund will act as anchor investor in green bonds issued by developing economies. The preparation of this issuance will be supported by technical assistance benefiting from the EIB’s experience in the field. This will help countries crowd in international investment for their green projects. The fund's anticipated impact could spur sustainable investments up to €15-20 billion globally," he concluded.
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