Only more public-private cooperation can unlock the huge climate finance challenge, says EU Bank Vice-President at Climate Finance Day in Paris
11 December 2017
The Vice-President in charge of Climate Action and Environment at the European Investment Bank (EIB) has urged the global community to step up efforts to crowd in private investors for climate action.
Speaking at Climate Finance Day, ahead of the One Planet Summit in Paris, EIB Vice-President Jonathan Taylor said,
“The EIB – as the Bank of the European Union – is a key supporter of the Paris Climate Agreement and the Sustainable Development Goals. The EIB is the world’s largest multilateral lender for climate action, and as such we have pledged to provide USD 100bn for climate action in the five-year period to 2020. This is expected to mobilise around USD 300bn of climate-friendly investments. Our support for the Paris Agreement entails higher volumes outside the EU – 35% of total financing by 2020 – and an increased focus on impact, adaptation and mainstreaming climate change considerations into everything we do. Key to unlocking the amounts we need to tackle climate change are increased efforts between the private and public sector. An example of our activities to mobilise private money for climate action is theLuxembourg-EIB Climate Finance Platform, which is the first time a Member State funds an entire climate finance platform rather than an individual climate finance operation.An even earlier platform is the GEEREF fund of funds - the Global Energy Efficiency and Renewable Energy Fund. This has blended first loss capital from public sources with private capital from institutional investors to support investment through equity (participations) in small and medium-sized renewable energy projects in developing countries.”
He added, “On the borrowing side, the EIB is proud to be the pioneer of the green bond market and its largest issuer. This year, the EIB celebrates the 10th anniversary of its first Climate Awareness Bond with an issuance of around EUR 20bn. We are at the forefront of making the green bond market more transparent, to attract more bond issuers and investorswith the goal of mobilising what is needed to confront the challenges ahead.”
Vice-President Taylor participated in a discussion about how to step up public and private cooperation in the field of climate action. At the One Planet Summit on 12 December, the EIB, together with partners in the public and private sector, will be announcing a number of new initiatives and projects for climate action.
The first ever green bond was issued by the EIB in 2007; in 2016, the EIB exceeded its climate action target for the seventh year running, providing over EUR 19.5 billion to help mitigate climate change and adapt to its impact.
The EIB’s Climate Strategyputs new emphasis on mainstreaming climate considerations across all our activities and tools and ensuring climate change considerations inform sector policies, e.g. through shadow carbon pricing, EPS and other mechanisms.
The Luxembourg-EIB Climate Finance Platform: This is a model which can be scaled up and replicated with other Member States of the European Union. Here, Luxembourg will make available EUR 30 million (25% of Luxembourg’s climate finance until 2020) of subordinated funding over the next three years for investment vehicles, based in Luxembourg, financing high impact climate projects. This funding will allow the EIB to co-invest and bring in third-party investors from the private sector. At COP 23, the first investment of EUR 5 million in the Green for Growth Fund under the platform was announced. This is expected to mobilise EUR 100m of public and private money which will support energy efficiency and renewable energy development in the Middle East and North Africa region.
On 10 November at COP23, the EIB signed its biggest ever loan in the Pacific: a water project for Fiji's capital Suva to help increase climate change resilience of the water supply system.
The European Investment Bank is active in about 160 countries. It is the bank of the European Union, owned by its 28 member states .It is the world’s largest financier of climate-related investment and the largest single issuer of green bonds which the EIB pioneered 10 years ago. A quarter of all EIB financing supports climate action and the EIB is committed to providing USD 100 billion for climate-related investment in the five years up to 2020. The EIB's climate strategy also commits to dedicating 35% of financing to climate action in developing countries by 2020.
Find out more about the EIB at the One Planet summit:
Climate financing by seven of the world’s largest multilateral development banks (MDBs) accounted for $61.6 billion in 2019, of which $41.5 billion (67%) was in low- and middle-income economies, according to the 2019 Joint Report on Multilateral Development Banks’ Climate Finance. The study expands the scope of reportingfor the first timeto all countries of operation. It now provides data on MDB climate finance commitments beyond those directed solely at developing and emerging economies, but with the focus remaining on low- and middle-income countries.
The EIB is set to support the development of new treatments for progressive vascular calcification, an area of significant unmet medical need where there are currently no approved treatments. To this end, the EU bank will provide a €20 million loan to Spanish biopharmaceutical company Sanifit, which is developing novel treatments in two disease indications linked to calcification.
The EIB and Italian biotech company EryDel SpA have signed a contract to provide a loan of €30 million to EryDel. This late-stage biotech company aims to develop and commercialise therapies based on its proprietary RBC technology for the treatment of rare diseases. The EU bank’s loan is backed by a guarantee from the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe under which the EIB and the European Commission are working together as strategic partners, with the EIB’s financing operations boosting the competitiveness of the European economy.