Greening the European Investment Bank
BRUSSELS – Over the past four years, the European Investment Bank – the European Union’s house bank – has loaned €48 billion ($62 billion) to energy projects around the world. Indeed, the EIB lends more to the energy sector than to any other, except transport (and its €72 billion total loan portfolio in 2010 made it a bigger lender than the World Bank).
Investment on this scale can help countries worldwide to make vital progress on reducing greenhouse-gas emissions at a time when political solutions based on international agreement remain elusive. Unfortunately, the EIB’s lending priorities and energy-investment portfolio are making the problem worse.
In 2007, the EIB adopted its first energy policy – “Clean Energy for Europe: A Reinforced EIB Contribution.” Since then, the Bank has significantly increased its lending for renewable energy, which totaled €13 billion in 2007-2010.
Yet, over the same period, the bank compromised this performance by lending €16 billion ($21 billion) for fossil-fuels projects, one-third of the institution’s total energy lending. Indeed, the EIB’s fossil-fuel lending grew from €2.8 billion in 2007 to €5 billion in 2010, including new coal units in Germany and Slovenia.
In new EU member states, the EIB has supported mostly high-carbon energy, which traps these countries in unsustainable energy systems. The EIB also loaned North Africa and Syria €1.6 billion for fossil fuels between 2007 and 2010, which constituted 30% of total lending to the region.
Make no mistake: these are long-term investments. The energy infrastructure constructed today will be used for at least another 40 years, thereby tying countries to carbon-dependent paths. In Slovenia, for example, if the government implements EU-wide climate targets, the new EIB-financed Sostanj lignite unit will consume most of that country’s CO2 emissions quota by 2050. Meanwhile, the EIB invests only 5% of its energy portfolio in energy-efficiency programs.