Over the last 10 months the EU Bank has undertaken a comprehensive review to ensure that its energy lending criteria reflect EU energy and climate policy, as well as current investment trends. The new proposals were discussed by the Bank’s Board on July 23, who approved them with additional clarifications on proposed exemptions to the Emissions Performance Standard.
Following the review the European Investment Bank (EIB) will focus on financing energy efficiency, renewable energy, energy networks, as well as related research and innovation. These sectors are expected to require the most significant investment in coming years. This will be complemented with technical assistance to help develop projects in these key sectors. The new energy lending criteria includes streamlined guidelines for lending for energy efficiency projects to enhance co-financing of national energy efficiency programmes and enable increased support for near-zero energy buildings.
The EIB will introduce a new Emissions Performance Standard to be applied to all fossil fuel generation projects to screen out investments whose carbon emissions exceed a threshold level. This threshold reflects existing EU and national commitments to limit carbon emissions. The board agreed that the Emissions Performance Standard would be kept under review and that more restrictive commitments could be considered in the future.
“Adoption of the new lending criteria represents an important step forward in the European Investment Bank’s commitment to energy investment that supports EU policy and reflects the urgent investment challenges currently facing the energy sector. Prioritizing lending to energy efficiency, renewable energy, energy networks and energy RDI projects will help EU to meet its energy and climate objectives and create local employment across Europe. The new Emissions Performance Standard will ensure that outside these sectors the Bank’s energy lending makes a sustainable and positive contribution to economic growth.” said Mihai Tanasescu, European Investment Bank Vice President responsible for energy lending.
Gas is expected to remain a transition fuel to a low carbon energy system, and the Emissions Performance Standard will ensure that lending is restricted to projects that make a positive contribution to EU economic growth and are consistent with EU climate policy. Over the last five years EIB lending to power generation projects using fossil fuels declined significantly and during this period lending to coal and lignite power stations represented less than 1.5% of overall energy lending.
The public consultation process launched in October 2012 enabled the detailed contribution of a broad range of over 80 stakeholders, including shareholders, industry associations, civil society and the private sector to be taken into account. This was the first energy sector review since 2007 and feedback received reflected both economic challenges facing the energy sector and concerns about emissions.
The European Investment Bank is one of the world’s largest energy lenders and over the last 5 years has provided more than EUR 70 billion for long-term energy investment. EIB energy lending follows both EU energy and climate change policy and national energy strategies to support investment in sustainable, secure and competitive energy across Europe.