The board of the European Investment Bank (EIB) has agreed a new energy lending policy and confirmed its increased ambition in climate action and environmental sustainability.
Following its July 2019 proposal that it would cease funding fossil fuels, the EIB plans to unlock €1Trn to fund climate action and environmentally sustainable investment in the decade to 2030.
EIB president Werner Hoyer said, “Climate is the top issue on the political agenda of our time. Scientists estimate that we are currently heading for 3-4°C of temperature increase by the end of the century. If that happens, large portions of our planet will become uninhabitable, with disastrous consequences for people around the world.
“The EU bank has been Europe’s climate bank for many years. Today it has decided to make a quantum leap in its ambition. We will stop financing fossil fuels and we will launch the most ambitious climate investment strategy of any public financial institution anywhere.”
Stressing the need for cooperation, he added: “I would like to thank the shareholders of the bank, the EU Member States, for their cooperation over the past months. We look forward to working closely with them and with the EU Council of Ministers, with the European Commission, the European Parliament, international and financial institutions and, crucially, with the private sector, to support a climate neutral European economy by 2050.”
The bank will strengthen support for clean energy and has detailed five principles that will govern future EIB engagement in the energy sector. These include prioritising energy efficiency; enabling energy decarbonisation through increased support for low or zero carbon technology, aiming to meet a 32% renewable energy share throughout the EU by 2030; increasing financing for decentralised energy production, innovative energy storage and e-mobility; ensuring grid investment essential for intermittent energy sources such as wind and solar and cross-border interconnections; and increasing the impact of investment to support energy transformation outside the EU.
EIB vice-president in charge of energy Andrew McDowell said, “Following a long discussion we have reached a compromise to end the financing by the EU Bank of unabated fossil fuel projects, including gas, from the end of 2021.”
Over the last five years the European Investment Bank has provided more than €65Bn of financing for renewable energy, energy efficiency, and energy distribution.