Carbon credits, third-country financing or loans for the Mediterranean Solar Plan – the European Investment Bank (EIB) continues to increase its loan conditions and guarantees for climate protection, thus reflecting the European Union’s objectives in this area. In its 2009-2011 action plan, it is committed to developing, in cooperation with the European Commission, a specific energy and climate strategy. While determining the appropriate volume of EU resources for the initiative is proving to be a struggle, the bank is expected to grant the sum of €20 billion over the coming two years (in 2008, the EIB had allocated almost €18 billion to the protection and improvement of the environment and alleviation of climate change). The bank is promoting five key areas: adaptation, alleviation, research, development and innovation, transfer of technology and cooperation and support of carbon markets.

SUPPORTING RENEWABLE ENERGY

The EIB is granting loans in the EU and pre-accession countries based on six priority areas, three of which are inherent to climate protection. These are the protection and improvement of the environment, support for sustainable groups and promotion of sustainable, competitive and safe energy. The bank’s commitment in this last area has been reinforced over recent years, as its loans for sustainable and efficient energy increased from 25% to 50% compared with total loans since 2004.

Among the projects financed by the EIB in ten European countries, solar energy has made a rapid breakthrough. In 2008, it represented 35% of loans dedicated to renewable energy, compared with 9% the year before. Moreover, along with the AFD (Agence Française de Développement) and KFW (the German government-owned development bank), the EIB is committed to providing €5 billion in loans as of 2010 in the framework of the Mediterranean Solar Plan, which aims to increase the use of each country’s renewable energy and improve their energy efficiency. All projects involving the reduction of emissions, renewable energy and energy efficiency, land-use changes and carbon capture and storage may benefit from attractive EIB financing conditions. Comparatively longer and deferred reimbursement periods are possible in certain cases.

Another concrete example is the support given by the bank to the Covenant of Mayors, a project which currently commits just under one thousand cities to go beyond EU objectives in terms of reducing CO ₂ emissions. The EIB contributes to the financing of investments promoting energy efficiency and renewable energy, which are essential to making cities more ecologically friendly.

FIELDS OF ACTION

To promote the fight against climate change and reduce greenhouse gas emissions, the EIB proposes a series of projects or loans. It recently granted a loan of €200 million in Hungary to co-finance the use, management and protection of forests.

Furthermore, its fields of action are as broad as they are diversified. Via its fund for participation in the JESSICA programme (Joint European Support for Sustainable Investment in City Areas), the bank encourages sustainable investment in urban areas. It intervenes on behalf of management authorities wishing to implement the programme in their area.

The EIB is also highly active in the carbon market and has proposed six market mechanisms to promote trading systems for carbon credits. These are the Carbon Fund for Europe (CFE, €50 million) in cooperation with the World Bank; the Multilateral Carbon Credit Fund (MCCF, €190 million) with the EBRD; the two funds with the KfW (Kreditanstalt für Wiederaufbau); the post-2012 fund and the Fonds Capital Carbone Maroc (FCCM). By intervening in the financing of carbon funds, the EIB intends to promote the use of public and private capital to support low-carbon projects.

WHAT AID FOR THIRD COUNTRIES?

Besides its activity in the 27 member states, the EIB plays a role in more than 130 countries, thus reinforcing the EU’s external cooperation policy, whether it be in Latin America, Asia, Central and Eastern Europe, the Balkans, the Mediterranean Basin, Africa, the Caribbean or the Pacific. In particular, it manages the mechanism for sustainable energy and secure energy supply intended to strengthen the EIB’s contribution to renewable energy and energy efficiency in third countries. The latter represents a pluriannual budget to the tune of €3 billion.

The EIB group (EIB+EIF) also supports the Global Energy Efficiency and Renewable Energy Fund – GEEREF – active in ACP countries. Managed by the European Investment Fund, this initiative will, via regional funds, invest in small and medium-sized projects involving energy efficiency and renewable energy in developing countries and emerging economies.

Moreover, in accordance with the current mandate for Asia and Latin America (ALA IV) covering the 2007-2013 period, the EIB has also made available a maximum of €3.8 billion in loans to finance operations contributing to the alleviation of climate change or to support the EU’s presence in these regions by means of direct foreign investment and the transfer of technology and know-how.

The bank is promoting five key areas: adaptation, alleviation, research, development and innovation, transfer of technology and cooperation and support of carbon markets