EIB joins fellow Multilateral Development Banks to support a just transition
29 October 2021
The European Investment Bank is joining seven other Multilateral Development Banks (MDBs) in committing to a just transition that supports countries and other clients moving towards net-zero emission economies.
The MDBs today released a joint statement outlining their commitment to five High-Level Principles for a just transition. The statement outlines how the MDBs will support countries and other clients in moving away from the use of fossil fuels and towards low greenhouse gas emissions and climate resilience in a way that shares the costs and benefits, while supporting and protecting communities, industries, and workers.
The MDBs will work with national development banks and other financial institutions to develop financing and policy strategies supporting a just transition that promotes economic diversification and inclusion.
EIB Vice-President Ricardo Mourinho Félix, who is responsible for Just Transition, stated: “To meet the Paris climate goals, we must switch to a green economy and create opportunities to ensure that no one is left behind. The EIB is partnering with fellow multilateral development banks on common principles to finance a Just Transition. We are currently working on a Just Transition proposal under our Climate Bank Roadmap, which will demonstrate how our lending, our financial instruments, but also our technical assistance and advisory services can support a green future for all of us, in particular in the regions and for the communities that have the furthest to go.”
The need for a just transition is set out in the Paris Agreement preamble, which cites “the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities”. This is at the heart of the climate work of the MDBs as they work together to align their activities with the long-term goals of the Paris Agreement.
The five principles are: delivering climate objectives while enabling socio-economic outcomes and building progress on Paris Agreement goals and the Sustainable Development Goals; support to move away from greenhouse gas emissions-intensive economic activities through financing, policy and advisory activities, and knowledge sharing; the mobilisation of public and private finance and enhanced coordination; support for affected workers and communities to mitigate impacts and increase opportunities; and transparent and inclusive planning, implementation and monitoring of just transition programmes that include relevant stakeholders and affected groups.
The European Union’s Just Transition Mechanism is an integral part of the European Green Deal. It supports a wide range of investments helping to address the social, employment, economic and environmental impacts of the transition towards carbon neutrality in the regions most affected by the transition. Inside the EU, the EIB Group will support all pillars of the Just Transition Mechanism. Outside of the EU, the EIB will support Just Transition in the context of climate action and social development, framing its approach in collaboration with the other MDBs.
EIB at COP26
The EIB will be present with a pavilion in Hall 4 of the Scottish Event Campus and run a series of side events on numerous topics. You will find the full agenda here.
The European Investment Bank is active in around 160 countries and is the world’s largest multilateral lender for climate action projects. The EIB Group has recently adopted its Climate Bank Roadmap to deliver on its ambitious agenda to support EUR 1 trillion of climate action and environmental sustainability investments in the decade to 2030 and to deliver more than 50% of EIB finance for climate action and environmental sustainability by 2025. Also, as part of the Roadmap, from the start of 2021, all new EIB Group operations will be aligned with the goals and principles of the Paris Agreement.
The agreement paves the way for the territories and regions most affected by Europe’s transition to a climate-neutral economy to benefit from grants and loans under a Public Sector Loan Facility. This facility is part of the European Green Deal’s Just Transition Mechanism, which supports a fair shift away from fossil fuels while leaving no one behind, including communities that have relied on coal mining and polluting industries.
On Wednesday, the EIB Board of Directors, composed of representatives from the EU member states, approved the Climate Bank Roadmap (CBR) that sets out in detail how the EIB Group aims to support the objectives of the European Green Deal and sustainable development outside the European Union.
Today, the European Commission presents its proposal for a public sector loan facility under the Just Transition Mechanism. The facility will be implemented with the involvement of the EIB and will encourage investments that support the transition towards a climate-neutral economy by public sector authorities to the benefit of coal- and carbon-intensive regions. The facility will include €1.5 billion in grants from the EU budget and up to €10 billion in loans from the European Investment Bank’s own sources. The facility will mobilise up to between €25 and €30 billion of investments for helping territories and regions most affected by the transition to a climate-neutral economy, prioritising those that have less capacity to deal with the costs of the transition.