EU climate chief urges banks to end support for fossil fuels

The European Commissioner for Climate Action Connie Hedegaard has called for development banks to end support for fossil fuel power generation.

According to Euractiv, the Danish-born climate commissioner wants to see banks with a combined annual lending pot of $166bn (€130bn) to end support for fossil fuels in their energy lending policy reviews.

  “I am particularly keen to see three international financial institutions – the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD) and the World Bank – join with their EU and OECD partners to take a lead role in eliminating public support for fossil fuels,” she said in the foreword to a report on bank lending policies in the Western Balkans.

  Although all three banks have policies aimed at encouraging lending to renewables and energy efficiency, in practice fossil fuel projects, plants and infrastructure continue to benefit.

  EIB officials say that between 2007 and 2011 their bank invested $19.2bn in fossil fuel projects compared to $18.2bn in renewables, albeit they argue that such programmes offer relative CO2 emissions savings.

According to the new South East Europe Change Network (SEECN) report, between 2006 and 2012, 32 times more of the $2.15bn invested by development banks in the Western Balkans’ energy infrastructure went to fossil fuels than to non-hydropower-based renewables. 

The report found that fossil fuels accounted for 36 per cent of all bank loans in the region and almost half of the lending from the biggest regional lender, the EBRD. More broadly, around half of the EBRD’s annual $8.59bn of energy lending goes to fossil fuels.

“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,” Hedegaard said.

The report covers Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Montenegro and Serbia.

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