EIB in practice: Negative impacts on climate and well-being
Although the EU's bank, the EIB is eminently failing to support EU policy goals of tackling climate change and supporting sustainable development. Its lending in the important energy and transport sectors and specifically its lending outside the EU often has clearly negative, sometimes devastating impacts on the environment and on the well-being of affected communities.
EIB contradicts EU climate policy
The EIB's energy lending increases the carbon footprint of the European Union instead of implementing its climate and energy targets.
In the period 2007-2010 the EIB's support for fossil fuels has almost doubled from 2.8 billion to 5 billion euros.
Our analysis (pdf) for the same period showed:
- the EIB gave 16 billion euros to fossil fuels
- Renewables energy (without large hydro power plants) received only 13 billion
- 48 % of energy lending in the Global South went to oil, gas and large hydro.
If the EIB and the EU are to lead the way into an energy-efficient world based on renewable energy, the bank needs to urgently change its lending practices:
- The EIB needs to boost its renewable energy portfolio (without large hydro power plants) to meet its own target of 50 percent renewable energy share at energy generation.
- The EIB should propose and implement annual renewable lending targets until 2020 and for that purpose establish and implement a solid greenhouse gas and energy efficiency accounting methodology.
- In transmission lending, the EIB should start lending to smart grid and decentralised electricity systems.
- The EIB must phase out of fossil fuels and start decreasing its gas lending immediately (in accordance with the recommendations of the European Parliament).
The EIB as the EU bank should be working towards the EU policy goal of greenhouse gas reduction. Instead it is fuelling climate change through its bias towards roads.
A breakdown (pdf) of the EIB's transport and related industry investments from 2006-2009 shows that:
- 54% (out of EUR 67.6 billion invested in the transport sector) went for the most carbon intensive transport modes: 45% for road-, 9% aviation-investments.
- This compares to 32% invested in transport modes with a smaller climate impact - rail and urban public transport.
- Even worse, in central and eastern Europe at least 66% of investments were made into roads.
We urge the EIB to support the de-carbonisation of the transport sector and to adopt an integrated Avoid-Shift-Improve strategy by supporting initiatives that would reduce travel needs (avoid), promote a shift from road towards rail and public urban transport, and improve existing transport to make it more efficient.
With loans in 2010 outside the European Union (EU) of around EUR 9 billion, the European Investment Bank is a leading financial powerhouse operating around the globe on behalf of the EU and its member states.
The European Investment Bank has specific obligations in its mandates to achieve social and environmental goals beyond the financial bottom line, including “reducing poverty with the objective of sustainable development” (The Cotonou Agreement, for African, Caribbean and Pacific countries) and “the improvement or protection of the environment” (External Lending Mandate for Asian and Latin American countries).
In practice, however, the EIB has been involved in some of the most destructive large-scale projects funded by international financial institutions (IFIs) in recent years. The Chad-Cameroon oil pipeline, the Lesotho Highlands water project, the Nam Theun II dam, the West Africa gas pipeline and other highly contentious projects have all been made possible through the provision of EIB loans.