Client Earth criticises development banks’ lending policies
11 July 2013, Power Engineering International
A top environmental law agency has applauded European Commissioner for Climate Policy Connie Hedegaard for her stance on development banks’ lending practices to fossil fuel power generators.
Marcin Stoczkiewicz, senior energy lawyer and head of Client Earth’s Polish office told Power Engineering International (PEi) that the commissioners words were important as “the lending policies of the European Investment Bank (EIB) and European Bank for Reconstruction and Development (EBRD) are still inconsistent with EU competition and climate policy.”
European Commission climate chief, Hedegaard, had highlighted the persistent preference of the banks to lend to the fossil fuel sector and noted that it was particularly striking in the western Balkans region.
“Multilateral lenders can lead by example by restricting conditions for public financing of coal, the most damaging fossil fuel, and by pressing for greater transparency in reporting on emissions,” she said.
Mr Stoczkiewicz pointed out to PEi that Western Balkans countries are part of the Energy Community Treaty, an agreement between the EU and Western Balkan countries establishing the common energy market and preparing the region for accession to the EU.
“One of the most important obligations established in the Treaty is implementation of EU competition and energy law, including State aid law. EU State aid law prohibits, in principle, state subsidies for building new coal-fired power plants.
“Without public subsidies the majority of coal-fired power plants projects in the region became unprofitable. Therefore the fossil fuel energy groups are looking for indirect subsidies, mainly granted in the form of preferential loans by development banks.”
“Therefore, the words of Commissioner Connie Hedegaard are the step in the right direction.”
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Institution: EBRD | EIB
Theme: Energy & climate