Fulfilling Europe’s potential to lead on climate change
The European Investment Bank and the European Bank for Reconstruction and Development are both reviewing their energy sector lending policies. This is an opportunity to live up to their potential by combating climate change and promoting a sustainable future for all.
Find out how:
1
Loans to companies with a high share of fossil fuels in their power and heat generation portfolio need to be conditioned on the company committing to a decarbonisation plan aligned with the Paris Agreement prior to loan approval. The first emissions reductions must already be measurable within the lifetime of a project.
2
Given the danger of carbon lock-in and stranded assets, no financial support should be given to companies planning new coal power capacity at all, including buying or retrofitting existing coal assets. As fossil fuels are becoming not only an environmental but also financial liability, supporting companies planning new coal power plants cannot contribute to creating a transition to stable companies operating on market principles.
3
The banks need to incorporate the low-carbon transition into its project-level transition indicators to ensure that vulnerabilities resulting from fossil fuel exposure are taken fully into account in project design.
CASE STUDIES
The cases of Energa and CEŽ show that, while the companies were and are benefiting from the EBRD support, and while they are investing into various green projects, their core business is not decarbonising fast enough and in fact both companies invest into new or extension of coal.
The case studies on Elektroprivreda Srbije (EPS) and Bulgarian Energy Holding (BEH) are illustrative of mismanaged EBRD investments where potential emissions reductions gains have not been maximised.
Read more:
Energy doublethink: contradictions at the EU bank in combatting climate change (PDF | web-version)
EBRD support to energy companies with fossil fuel production
Comments on the EBRD lending policies for the energy sector.
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RELEVANT UPDATES

EIB needs fundamental reforms to back its sustainable finance plans
Press release | 20 January, 2021Following today’s annual press conference of the European Investment Bank (EIB), in which the Bank’s President Werner Hoyer, presented its role in supporting the EU’s response to the Covid-19 pandemic and the ensuing economic downturn in “smart and green” way, Bankwatch’s campaigners commented on the EIB’s sustainability track record and key deficiencies in the Bank’s policies that have been missing in President Hoyer’s statements today.
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Letter to EIB Board on Climate Bank Roadmap
Publication | 10 November, 2020Policy briefing for the EIB Board of Directors.
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NEW REPORT: Is the EIB too faulty to become the ‘EU Development Bank’?
Press release | 9 November, 2020With the EU actively debating the reshaping of its development role in the context of the current global health and economic challenges and the ‘Finance in Common’ summit kicking off today, the European Investment Bank (EIB) is looking to take center stage as the new ‘EU Development Bank’.
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EBRD’s Green Economy Transition must not be a fig leaf for fossil fuels investments
Blog entry | 16 June, 2020Like many other financial institutions, the European Bank for Reconstruction and Development (EBRD) has responded to the call to join the global effort to tackle the climate crisis. And yet, over the past decade, while growing its support for renewable energy, the bank has continued to hand out public money to the fossil fuels industry.
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Cities for citizens
Blog entry | 15 June, 2020To modernise and green our cities, we need good governance first.
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Croatian hydropower plant highlights loopholes in EIB environmental policies
Blog entry | 2 April, 2020The EIB-financed Ilovac hydropower plant was built on the river Kupa in north-west Croatia at around the same time as scientists established the existence of a new fish species there – Alburnus sava. Since the dam’s construction, the species has not been found at the site. Has Alburnus sava’s habitat been degraded for just 1.4 MW of installed power?
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