The European Investment Bank (EIB) must adopt new directives and operating principles to play a meaningful role in realizing the EU's goal of a decarbonised and resource efficient economy, say CEE Bankwatch Network and Counter Balance ahead of the bank's annual meeting during the EU finance ministers' Council this Wednesday, May 25.
A new Bankwatch analysis released today shows that, while the EIB has met its climate action objective – a minimum loan allocation for projects intended to reduce greenhouse gas emissions and facilitate adaptation to the impacts of climate change – the contribution of the EU's house bank to addressing the unfolding climate crisis is far from sufficient.
The full briefing can be found here: http://bankwatch.org/publications/european-investment-bank-and-climate-action-2013-2015
The EIB has set itself a target of 25 percent of its annual lending volume to be earmarked for projects labelled “climate action”. According to the analysis, the bank has so far managed to meet this target, but since 2013 it has failed to finance such projects in a number of EU countries including Portugal, Croatia, Poland, and Belgium.
Specifically, the EIB's climate action lending appears to prioritize richer EU member states. Between 2013-2015 the top four beneficiaries of such finance were the UK, Austria, Sweden and France. Climate action investments made over 35 percent of EIB financing in each of these countries. At the same time, in Croatia, Cyprus, Portugal and Malta, EIB lending under the climate action program amounted to less than 10 percent.
Not least, the bank's revised climate strategy, adopted ahead of the landmark Paris climate summit, has failed to up its climate action target. Moreover, this new strategy also does not commit the EIB to facilitate the EU's climate and energy goals, or to increase its lending for much needed energy efficiency and renewable energy projects.
“The EIB's investment trajectory currently looks particularly worrying,” says Anna Roggenbuck, EIB Policy Officer at CEE Bankwatch Network. “With plans to spend €3 billion on the massive fossil fuels project that is the Southern Gas Corridor, the world's largest lender is turning its back on the global effort to tackle the climate crisis. Instead of enabling the transition to sustainable energy, the EIB could be helping a European carbon lock in for decades to come.”
A European Parliament resolution last month flagged up the broadening gap between the EU's climate and energy policies and the EIB's operations. The Parliament called on the bank to improve the sustainability of its operations by stepping up lending for energy efficiency and renewable energy projects. It also urged the bank to reconsider its ongoing tendency to finance carbon intensive infrastructure such as motorways and fossil fuel projects.
The contribution of EIB financing to cross-sector energy efficiency has widely varied across Europe, the Bankwatch analysis found, and in a number of countries it has been well below the EU average or even plain zero.
Additionally, EIB investment in renewable energy has plummeted from €5.1 billion in 2013 to €2.7 billion in 2015. In a number of EU countries, EIB funding is completely consumed by public authorities and state-owned companies, and in turn private promoters of renewable energy from have no access to this funding source.
“At the Paris summit, the EIB portrayed itself as a climate champion. Now the bank has to translate this rhetoric into action,” says Xavier Sol, Director of Counter Balance. “It is now up to EIB Governors to ensure the European Parliament's call is not ignored. A major effort is required to improve the bank's transparency, sustainability and accountability standards.”
For more information contact: