The board of the European Investment Bank (EIB) on Tuesday approved a new climate lending strategy, which held the climate-focused portion of the bank’s total lending at 25% but aims to take climate considerations into account in all disbursements and focus on projects with more impact.
The 29 board members from the EU member states that own it plus the European Commission signed off on draft proposals for the revised strategy despite green groups dismissing it as hollow.
“This financing leverages and sustains growing investment from the private sector in support of the transition to a low-carbon economy,” the bank said in a statement following the meeting in The Hague.
The EIB says it is the largest climate financier in the world, investing more than €88 billion over the past five years both inside and outside the EU.
The revised strategy also includes extending a shadow carbon price well above EU ETS price projections by 20 years to 2050.
Anna Roggenbuck of watchdog CEE Bankwatch commended the guidelines in principle but said they lacked the teeth to guarantee they lived up to Europe’s agreed climate targets.
“It lacks clear implementation timelines, action plans or measurable objectives that would ensure investments in energy and infrastructure projects are in line with Europe’s goal of a transition to a low-carbon economy,” she said.
Roggenbuck said climate investments should get more than 25% of lending, singling out the lack of provisions to prioritise energy efficiency and renewable energy, which she said could mean the bank keeps funding fossil fuel projects such as the multi-billion Trans-Adriatic Pipeline to import gas from Azerbaijan.
Esther Badiola, a senior economist and climate specialist at the EIB, told an industry conference in Brussels last week that the bank is currently struggling to target some of the cheapest abatement opportunities in the east of the bloc.
“I want to stress how difficult it is for us to find good projects … Climate finance is going to very few countries and sectors,” she said, identifying those as France, UK, Germany, Italy and Spain; and to R&D, sustainable transport, and wind power.
“With this new strategy, we want to try to move to a much more impactful approach,” she said.
By Ben Garside – firstname.lastname@example.org