Setting the Scene: This year the European Investment Bank (EIB) – the world’s biggest international lender – will review its Energy Lending Criteria. In a public consultation starting from October it will revise whether or not it should still support fossil fuel projects.
A new analysis released this week by Bankwatch has revealed that, between 2013 and 2017, the bank has financed fossil fuel projects for more than EUR 11.8 billion. Of these, EUR 4 billion went to coal-heavy utilities.
Why this is important: The EIB is responsible for about 80 Billion EUR in loans and financing.
In Europe, it was one of the main funders of the controversial Southern Gas Corridor, for which it handed out a EUR 1.5 billion loan to the Trans Adriatic Pipeline (TAP) – passing through Greece and Albania and landing on southern Italian shores – and a EUR 932 million loan to the Trans Anatolian Pipeline (TANAP) – the eastern “sister” crossing Turkey.
The Process: The future of the investment banks future after Brexit was discussed today, as Ministers of Finance of the EU member states – who are also Governers of the EIB – gathered in Vienna yesterday ECOFIN meetings.
A two-stage public consultation will start in October of this year and will lead to revised Energy Lending Criteria by Autumn 2019.
Far from a merely internal policy process, the outcome of the revision process will be decisive for EU citizens, European public finance and the climate finance worldwide.
The Experts: Anna Roggenbuck, Policy Officer with CEE Bankwatch Network believes we might be in for a moral revival at the bank and calls its current lending strategy a “betrayal” of European values.
“By continuing to support fossil fuels projects with billions of euros in public money, the EIB is effectively betraying Europeans. The EU’s house bank must change tack and commit to shifting its funds from fossil fuels projects to sustainable energy ones.”
Xavier Sol, is a little more optimistic, and believes that a change in the Bank’s policies could add a powerful element to ongoing negotiations over the Paris Rulebook which have largely been stumped over finance;
“Figures clearly show that the EIB still needs to raise the bar to put the EU’s commitments under the Paris Agreement into practice. The review of its energy lending criteria is the chance to show that as the EU bank it is not lagging behind but rather showing the way to a clean energy transition and a fossil free future.”