Do bankers wear capes?

Avoiding catastrophic climate change demands three things: technology, political will and financing. We have the technology, we’re working on the political will (Hi Germany!) and that just leaves the money. Crucially, it’s not just about where we invest – but also, where we choose NOT to invest. 

As the EIB launches a public consultation on their spending priorities, here are three ways they can make themselves the heroes we need to tackle climate change in Europe.

1- Divest from fossil fuels

Between 2013 and 2017, the EIB lent a staggering EUR 11.8 billion to fossil fuel projects – a practice that has to stop in order for the EIB to comply with the Paris Agreement. EIB-backed gas megaprojects like the Trans Adriatic Pipeline (TAP) and the Trans Anatolian Pipeline (TANAP), in which the Bank poured some EUR 4 billion, belong in the past and have no place anymore in a Paris-proof investment portfolio. Instead of backing fossil fuels, the EIB should concentrate its entire lending portfolio on renewable energy, energy efficiency and energy storage. Learn more at our joint “fossil free EIB”campaign, we call on the EIB to completely divest from all fossil fuel projects.

2- Simplify access to funding for local authorities

Local authorities play a key role in delivering the energy transition. Therefore, the EIB should help local authorities with easier access to its funds. This should be done firstly by simplifying applications for the EIB’s flagship technical assistance instrument ELENA, and secondly by lowering the Bank’s minimum investment threshold, in order to enable local authorities of all sizes to access EIB funding. Currently, many local authorities struggle to tap into the opportunities offered by the ELENA and other EIB funding programs, which in turn slows down their energy transition progress.

3- Increase investments into sustainable heating & cooling

With heating and cooling accounting for half of final energy consumption in Europe, it is evident that the decarbonisation of this sector is critical to the success of the energy transition. Moreover, a large share of primary energy for heating and cooling is still coming from fossil fuels, in particular gas. Hence, the EIB has to increase its support for sustainable heating and cooling systems, which are based on renewable and infinite energy sources. In addition to this, the Bank should back new types of Projects of Common Interest that go beyond electricity networks, in particular smart thermal infrastructure.

Being the world’s largest multilateral lender and biggest provider of climate finance, the EIB’s energy lending policy sets an example for other public banks to follow. Furthermore, the Bank’s mandate is to support EU energy and climate policy, in particular the achievement of the EU’s 2030 targets and now also the implementation of the recently adopted Clean Energy Package. The EIB’s current approach towards supporting the energy and climate transition is anchored in its 2013 energy lending criteria, which are outdated in view of the new reality of the global Paris Agreement.