MEPs tell EIB to only support projects serious about decarbonisation, human rights and social benefits

In a vote in the European Parliament on two reports of committees on Budgetary Control (CONT) and Economic and Monetary Affairs (ECON) on June 12, MEPs have told the European Investment Bank (EIB) that their climate criteria should not be loosened permanently, and the bank should only finance clients and financial intermediaries which have credible plans to decarbonise their activities in time to stop catastrophic climate change..

The Parliament warned the bank that the recent exceptions made to the climate criteria for companies minimise the effectiveness of these criteria. MEPs reminded the EIB that clients are already contractually required to have and publish their decarbonisation plan to align with the Paris Agreement. ’The pledges to be the EU climate bank are nice, but the bank needs to put its money where its mouth is’, said MEP Viola von Cramon-Taubadel, rapporteur of the CONT report.

MEPs told the bank to step up its support for affordable and energy efficient housing and building renovations, and projects specifically designed to combat energy poverty. The bank should finance more social housing projects, and work more closely with local, regional, social and public housing providers, parliamentarians said.

Parliament’s enthusiasm for the EIB to make investments which put society first was not limited to housing. MEPs demanded that the bank invest more in healthcare, public services and community-led initiatives, and want the bank to lower the minimum amount of loans so the bank can finance smaller projects both within and outside Europe.

EIB Global was also under the European Parliament’s spotlight. Reflecting civil society recommendations, MEPs called on the bank’s external investment branch to adopt a strong development mandate, establish better human rights procedures and practices, be more careful about working with financial intermediaries, and support projects which have limited bankability but a high public return. They demanded the bank’s exclusion of blended financing for essential public services, particularly health, education and social protection, due to high risk of exacerbating existing inequalities and jeopardising universal access to these services. In this light, the European Parliament called for regular assessments of the implementation of the Global Gateway and related EIB Global activities.

However, the Parliament did make concerning calls towards the bank. MEPs asked the EIB to expand its Strategic European Security Initiative (SESI) and increase defence industry support - wanting public money to be spent on subsidising even bigger profits for large defence companies rather than more affordable green energy, healthcare and education projects. In response, the EIB’s President Werner Hoyer took an opportunity to remind the European Parliament that ‘the EIB does not finance guns or explosives for very good reasons.’ In line with its exclusion list, the bank’s support to the defence sector goes in the form of dual-use projects.

The Parliament also called for more support for hydrogen technology without insisting the EIB excludes fossil based hydrogen and only finances hydrogen produced from renewable energy and in line with demands of civil society organisations we shared with the bank in June. However, they did question whether companies truly needed EIB support to build hydrogen infrastructure in the Global South and expressed concern over additionality of such projects aimed at export to secure European hydrogen demand.

Pic: © European Union 2019 - Source : EP