The board of the European Investment Bank (“EIB”) has approved a new strategy for climate action and environmental sustainability. This is the culmination of a review process which involved industry, institutions, civil society, and the public.
The most notable aspect of the strategy is that from the end of 2021 the EIB will no longer consider new financing for fossil fuel energy projects, including gas. Future financing will concentrate on clean energy innovation, efficiency and renewables.
Other key elements of the strategy are:
- Between 2021 to 2030 the EIB Group will aim to support EUR 1 trillion of investments in climate action and environmental sustainability.
- The EIB will gradually increase the share of its financing dedicated to climate action and environmental sustainability to reach 50% of its operations in 2025.
- A new Emissions Performance Standard of 250g of CO2 per Kilowatt-hour (kWh) has been set, which will replace the current 550gCO2/kWh standard.
As part of the new strategy, the EIB Group will align all its financing activities with the principles and goals of the Paris Agreement by the end of 2020.
This will be complemented by measures to try and ensure that EIB financing contributes to a just transition for those regions or countries most affected. The EIB will work with the European Commission to create a transition fund to support investment under which the EIB will be able to finance up to 75% of the eligible project cost for new energy investment in those countries. These projects will also benefit from both advisory and financial support from the EIB.
New Energy Lending Policy
Together with the climate strategy, the EIB agreed a new energy lending policy detailing five principles that will govern future EIB engagement in the energy sector:
- prioritising energy efficiency in support of the target under the EU Energy Efficiency Directive;
- enabling energy decarbonisation through increased support for low or zero carbon technology, aiming to meet a 32% renewable energy share throughout the EU by 2030;
- increasing financing for decentralised energy production, innovative energy storage and e-mobility;
- ensuring investment for intermittent energy sources such as wind and solar, as well as strengthening cross-border interconnections; and
- increasing the impact of investment to support energy transformation outside the EU.
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