While confirming its plans to align with the Paris Agreement, the European Investment Bank (EIB) still continues to fund climate damaging fossil fuel projects, having disbursed more than €11.8 billion in fossil fuels projects since 2013 – point out NGOs in a new report.
State delegations are gathered in Katowice, Poland, this week to discuss the next steps to fulfill the Paris Agreement, but global development finance is not yet on track to tackle climate change.
A group of Multilateral Development Banks including the World Bank, the Asian Development Bank and the EIB, has announced a common 'six block approach' to align their operations with the objectives set in Paris in 2015, but this contains no concrete commitment about the much-needed, complete phase out of their fossil fuels investments.
Heavily lagging behind, the EIB – bank of the European Union and the world’s biggest multilateral lender – is expected to raise the bar to translate the EU’s climate commitments into action as it updates its energy policy next year. The EIB’s next energy strategy, defining the type of energy projects to be supported by the bank, will be decisive for EU citizens, European public finance and the climate worldwide.
The bank has so far continued to support fossil fuels projects, and last week’s announcement of a new €100 million loan to Gas Networks Ireland, just during the COP, shows it has no intention to stop.
A new joint briefing, published by Friends of the Earth Europe, Counter Balance and CEE Bankwatch Network has exposed that between 2013 and 2017 the bank disbursed €11.8 billion in direct support to fossil fuels, much of which went to unneeded gas infrastructure.
In addition, earlier this year, the bank channeled more than €2.4 billion to finance one of the most controversial infrastructure projects of all times – the Southern Gas Corridor – despite concerns over corruption, human rights, and the climate-impact of this mega-pipeline.
And the EIB also finances fossil fuels indirectly: since 2013 it has provided €3.9 billion to companies that are currently planning new coal power capacity, and others who already rely on coal for much of their power and heat generation portfolios.
The briefing points out that, as encouraged by the latest IPCC report, a radical transformation of global finance is urgently needed to avoid the most disastrous consequences of climate change. For the EIB, this means that business as usual is no longer an option.
Some key recommendations indicate the path the EU bank should immediately take: shift its funds from funding fossil fuels and step up finance for renewable energy and energy efficiency projects.
Colin Roche, Friends of the Earth Europe, said:
“The time is now, the climate can’t wait any longer. 50 more years of fossil fuel infrastructure is incompatible with halting catastrophic climate change. It’s time for the Bank to draw a red line under fossil fuel subsidies, to stop funding climate change and focus on the solutions to the imminent climate catastrophe.”
Xavier Sol, Director of Counter Balance, said:
“As the bank of the European Union, we expect more than climate lip service from the EIB. A substantial move towards the transformation needed to contain climate change is the complete phase out of fossil fuels, and public finance has to set the example in this direction. It will be crucial for the EIB not to miss the opportunity of its new energy policy next year to go 100% fossil-free.”
Anna Roggenbuck, EIB Policy Officer at CEE Bankwatch Network, said:
“The EIB must end all support to fossil fuels loans, both direct and indirect. Its current “corporate loans” business model has to be revised to ensure all its loans contribute to the EU decarbonisation objective. The bank’s loans must be conditioned to companies presenting their assets’ decarbonisation plans in line with the Paris Agreement, and by no circumstances shall more loans be granted to companies developing new coal capacities.”