As world finance paces up to adapt to the global fight against climate change, one main player is lagging behind: the European Investment Bank (EIB), the bank of the European Union.
While the World Bank decided to stop financing upstream oil and gas extraction after 2019 and private groups such as Allianz or ING have taken initiatives to support the transition to clean energy, the EIB still needs to raise the bar to put the EU’s commitments under the Paris Agreement into practice.
The EIB has so far steadily supported fossil fuel projects: between 2013 and 2017 the bank disbursed EUR 11 billion of direct support to fossil fuels, the majority of which focused on unneeded gas infrastructure. What is more, in early 2018 the bank decided to channel more than EUR 2.4 billion into one of the most expensive (and controversial) infrastructure projects of all times – the Southern Gas Corridor – despite the corruption, human rights, and above all climate-impact concerns brought up by civil society.
But for the world’s biggest multilateral lender, the opportunity to lead development banks into the clean energy transition is just around the corner. This Autumn it will start reviewing its Energy Lending Criteria, making choices that will be decisive for EU citizens, European public finance and the climate worldwide.
This will be the chance for the bank to act on the current climate urgency by shifting its funds:from funding fossil fuels to stepping up finance for renewable energy and energy efficiency projects. For coherence with the climate commitments undersigned by the EU and its shareholders, the EIB has no other choice.
Earlier this year, the European Parliament has called on the bank to “align its portfolio with the global average temperature increase target of 1.5° in line with the Paris Agreement, through the swift and complete phasing-out of fossil fuel projects and the prioritisation of energy efficiency and renewable projects”.
Therefore, as civil society groups concerned about the future of our planet, we urge the EIB to expand on the World Bank commitment and phase out immediately all oil and gas support. The banks also needs to choose wisely the energy companies it finances, excluding the ones that plan coal power, mining or infrastructure expansion, and supporting exclusively companies which have developed a Climate Transition Plan. All EIB projects and investment portfolios should undergo a thorough climate test to ensure compatibility with the Paris Agreement.
As the new EU budget braces up to turn the clean energy transition into a reality, for the financial arm of the EU it’s time to make the ‘energy efficiency first’ an imperative principle of its energy lending and lead the way to a sustainable future.
Let’s make sure our message loud and strong: the EIB can’t keep lagging behind, it needs to phase out fossil fuels and align with the Paris Agreement.
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