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 Tackling Climate change: an EIB lending priority
European Investment Bank (EIB)
As the European Union’s (EU) long-term financing institution, the European
Investment Bank (EIB) provides long-term financing for investment projects in
both public and private sectors, furthering European policies. Tackling climate change, protecting the environment and improving human wellbeing
are among the EIB key lending priorities. Over the past five years (2001-
2005), 53.7 billion Euros of its individual loans went to environmental protection
worldwide.
In 2005, the EIB provided direct financing for 83 environmental projects for a
total of 10.9 billion euros in the EU, equivalent to 33% of the overall individual
lending total in the EU over that period. This is fully in line with the Bank’s
Corporate Operational Plan (COP) objective for environmental lending of 30-
35% of the EIB’s overall lending in the EU. Small and medium-sized activities
with environmental objectives also benefit from an EIB support through often
dedicated global loans to specialist intermediaries. These global loans promoting
the environment amounted in 2005 to EUR 210 million.
Protecting the environment
The Bank supports projects promoting EU environmental policy, in particular
the Sixth Environmental Action Programme, and applies the EU practices
and standards in carrying out its environmental activities. Provided they are
economically, technically and financially viable, the EIB finances environmental
projects:
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climate change (e.g. energy efficiency and renewable energy); |
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the protection of nature, biodiversity and natural resources management (e.g.
flood relief, natural disaster prevention and alleviation); |
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the safeguarding of environment and health (e.g. reduction of industrial
pollution, provision of water and wastewater treatment); |
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the promotion of the sustainable use of natural resources & waste management
(e.g. minimisation, recycling, re-use and disposal of domestic, commercial and
industrial waste); and, |
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the improvement of the quality of life in the urban environment (urban renewal
and sustainable urban transport). |
As well as financing specific environmental projects, the EIB also takes into
account the environmental impact in all projects it appraises and ensures that
adverse effects on the environment are mitigated.
Climate Change
Recent changes in EU policy in several
fields, notably renewable energy, energy
efficiency, bio-fuels and research and
development have also been influenced
by climate change considerations.
The same is true of many aspects of
external policy, for instance in relations
with China (aiming to promote clean
coal technology) and the African,
Caribbean and Pacific Group of
States (ACP) where adaptation is now
recognised as being of critical concern
for poverty reduction and sustainable development.
In response to these developments, the EIB has been supporting efforts to achieve
lower carbon emission trajectories through investments involving fuel switching,
the development of renewable energy and energy efficiency.
In order to support EIB investments and operations in:
(1) supporting underlying investments contributing to climate change mitigation
and adaptation;
(2) providing financial and technical assistance to promoters for carbon credit
development; and,
(3) supporting shareholders and EU companies seeking to
purchase project-based carbon credits, developing their own capacity to promote
the carbon market
The EIB has two dedicated instruments:
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The Climate Change Financing Facility (CCFF), of 500 million Euros, provides
long-term loan finance to EU companies participating in the EU Emissions
Trading Scheme (ETS) and to companies outside the EU developing JI and CDM
projects. It is made up of two sub-windows: sub-window I of 400 million Euros,
earmarked for investments that could be demonstrated as helping companies
comply with their respective obligations within the ETS, and sub-window II of
100 million Euros which provides for projects that could result in the generation
of Kyoto JI and CDM carbon credits. To date 70% of the funds have been
committed. In May 2006 the Facility (made up of the same two sub-windows
in the same amount) was renewed with the broader goal of supporting any
investment that significantly reduces greenhouse gas emissions, regardless of
region, sector and greenhouse gas. |
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The Climate Change Technical Assistance Facility (CCTAF) with 5 million Euros
to provide advance funding for activities associated with the development of
project-based carbon credits under the CDM and JI instruments of the Kyoto
Protocol, on a conditional financing basis. |
In addition, The European Bank for Reconstruction and Development (EBRD) and
the EIB are establishing a joint Multilateral Carbon credit Fund (MCCF) as a key
instrument in their strategy for combating climate change. The MCCF is designed
to develop the carbon market in countries in transition to market economies.
Discussions and negotiations have also been ongoing with the World Bank on
the establishment of the Carbon Fund for Europe (CFE). The launch of this fund
is planned for the second semester of 2006. Opportunities for sponsoring and/or
participating in other targeted funds are being investigated, notably with KfW
Entwicklungsbank.
Lastly, the EIB is an active member of the MDB working group involved in the
preparation of the Investment Framework - for energy investment to accelerate
the adoption of technologies which enable cleaner, more efficient energy
production and use - requested by the G8 at the Gleneagles Summit in June
2005.
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