Brussels - 7 July 2022
The European Parliament has called on the European Investment Bank (EIB) to reconsider loans at risk of becoming stranded assets, such as motorways and highways, in a vote today (7 July).
The EIB spent almost €3 billion in 2020 and 2021 on expressway and motorway expansions, such as a €550 million loan for a toll motorway near Milan, Italy. The bank made these investments despite the risk they will lose value as people switch from polluting private vehicles to cleaner public transport. This puts new motorways at risk of becoming ‘stranded assets’ - investments which lose value or usefulness as societies change their behaviours to fight the climate crisis. It could result in public money being wasted on unsustainable projects.
Frank Vanaerschot, Director of Counter Balance, said:
“MEPs today told the EIB that it is being too careless with building new roads. This symbolises the EIB‘s unwillingness to go all in on green and accessible transport in its new plan for the sector. We strongly urge the EIB to heed the Parliament’s warning on highways and stranded assets and take their transport plan back to the drawing board.”
EIB investment in motorways frequently fails to solve traffic congestion but emits more carbon into the atmosphere. It encourages people to drive rather than use public transport. The bank recently named roads as their third highest priority in their new draft transport investment guidance, despite these obvious risks.
Concerns raised on human rights, international development and transparency
MEPs condemned the EIB’s refusal to heed previous Parliament demands to improve its human rights record. They called for the bank to withdraw funding from projects endangering the rights of communities affected by them - such as the human rights violations caused by the construction of an electricity corridor in Nepal.
Frank Vanaerschot added:
“MEPs could not have been clearer - the EIB must stop investments in projects if human rights violations take place. If these rights mean anything to the bank, they should start by blocking investments in projects where they admit abuses are happening on the ground.”
The European Parliament also raised concerns about ‘EIB Global’ - the bank’s new international development branch. MEPs requested EIB Global be fully transparent on exactly how it works with countries in the Global South, and who sits on its Advisory Council.
MEPs criticised the deteriorating transparency levels at the EIB. In 2010, information on over 96 percent of all projects being considered for EIB support was published at least three weeks before being approved. This fell to 60 percent in 2020 - a trend coinciding with the bank’s increased involvement with the private sector and acquiescence to business confidentiality over public scrutiny.
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Notes to editors
- MEPs voted on these positions in two annual reports on the EIB drafted by Parliament committees on Budgets (BUDG) and Budgetary Control (CONT). The rapporteur for the BUDG report was David Cormand (Greens/EFA) and the rapporteur for the CONT report was Corina Crețu (S&D).
- The EIB recently released a draft of its new Transport Lending Policy, which defines the bank’s transport investment priorities. The policy is due to be finalised in a meeting of the bank’s Board of Directors on 13 July.
- Counter Balance recently analysed the EIB’s transport and energy investments covering 2020 and 2021 in our latest report, Flattering to deceive: A reality check for the ‘EU Climate Bank’.
- Counter Balance's briefing, EIB & Transport: Making EU Public Finance transform mobility across Europe and beyond, exposes how the EIB’s current approach to transport needs to undergo radical change if it is to help the EU decarbonise its transport sector and achieve the objectives of the Green Deal.