The European Union’s lending arm or European Investment Bank has proposed phase-out financing of fossil fuel projects soon
The European Investment bank in its latest draft policy document which it released Friday, proposes to “phase out support to energy projects reliant on fossil fuels” while ramping up its support for renewable energy.
The move is seen as a part of the European Union’s effort to meet emission targets in its bid to fight Climate Change. “Once in effect, this means that the bank will have a clear position not to support upstream oil or gas production, coal mining, infrastructure dedicated to coal, oil and natural gas (…), and power generation or heat production from fossil fuel sources,” according to the draft posted on the bank’s website.
The plan is on track to be put to the bank’s governors for approval in September.
The environmentalists hailed the decision and add that it is perfect timing, especially after the European nations, are facing the second heatwave this year.
Thanks for ditching fossil fuels, @EIB! 💐
— 350.org Europe (@350Europe) July 26, 2019
The European Investment Bank (EIB) is the world’s biggest multilateral public bank. The EIB, which is owned by the EU’s 28 member states, loaned 55.6 billion euros ($61.93 billion) in 2018. The shift away from the fossil fuel adds the ‘urgent’ factor and EIB stance can provide other lending behemoths the required push away from dirty Fossil fuel projects. What is more interesting is that the policy draft conveys the bank’s faith in renewable energy which many institutional lenders have deemed as ‘Risky’ investments citing irregular power generation from solar or wind.
Former World Bank chief economist Nicholas Stern said shifting the EIB’s investments toward clean energy would likely make “excellent returns while fostering real progress in reducing greenhouse gas emissions and air pollution.”
If the draft finds approval in September, European Investment Bank will join the likes of Norway’s Sovereign wealth fund. Earlier this year, Norway’s $1 trillion sovereign wealth fund announced plans to dump shares in some oil and gas companies.
To Read the EIB Draft Policy click Here