Vice-President Ambroise Fayolle addressed the 5th High-Level Ministerial Dialogue on Climate Finance, organised by United Framework Convention on Climate Change and the COP27 Presidency.
Find out more on EIB’s participation at COP27.
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Ladies and gentlemen,
We heard the call to continue delivering and scaling up climate finance now. The message is clear.
MDBs have a key role to play
As we all know, international financial institutions cannot meet these tremendous needs for investment alone. Nor can they alone bridge all the knowledge gaps that make projects successful. Working in partnership is the only solution. The European Investment Bank has been chairing the group of multilateral development bank heads this year, and I am pleased to report that we have achieved substantial progress on climate finance.
Multilateral development banks are already delivering on their collective targets, set in 2019:
- In 2021, they provided $82 billion for climate action globally, out of which $51 billion (or approximately two thirds) was for climate finance in low- and middle-income countries.
- Over $19 billion for adaptation, out of which almost $18 billion (or 92%) was committed to low- and middle-income economies.
- The amount of global private finance mobilised in 2021 stands at $41 billion.
The joint multilateral development bank statement that we released just ahead of COP27 shows the full breadth of financial and technical support we provide.
- This includes stepping up support for countries and cities in their long-term climate planning – to help them prepare high impact projects and programmes that can deliver transformational results.
- We are doing so by mobilising additional financing from public and private sources.
- We are supporting clients so that they better understand climate risks and build resilient, low-carbon and inclusive infrastructure, cities and businesses.
- We are helping countries make the most of the economic opportunities this transition brings.
- And we are increasingly integrating our efforts to address the climate crisis, with a growing focus on nature and biodiversity loss.
The EIB contribution, as the EU climate bank
At the European Investment Bank, we have been playing our part.
- We are transforming ourselves into the climate bank of the European Union. We are one of the world’s largest climate financiers. We pioneered the green bonds market 15 years ago and have adopted ambitious climate targets since 2010.
- In 2019, we made a quantum leap forward by adopting an updated Energy Lending Policy. As part of a prioritization exercise, we decided to phase out financing to all unabated fossil fuels energy projects. At the same time, we announced ambitious climate and environmental sustainability targets, which were then enshrined in our Climate Bank Roadmap. This includes:
- increasing EIB investment in climate action and environmental sustainability to more than 50% of annual lending by 2025
- supporting €1 trillion of green finance in this critical decade, and
- aligning all new activities with the Paris Agreement, which is effective since January 2021.
As part of our new Adaptation Plan, launched at COP26 in Glasgow, we committed to triple our financing dedicated to adaptation by 2025.
At COP26, we also launched our Paris Alignment for Counterparties framework (PATH), becoming the first multilateral bank to consider not just the climate impact of the projects it finances, but also the wider activity of borrowers.
The share of European Investment Bank investment that went to climate and environmental action projects rose to 51% in 2021. We have still a long way to go, when it comes to climate. But the result shows that the Bank is transforming faster than anyone could have expected to meet our climate commitments.
With the creation of EIB Global, a dedicated development arm of the European Investment Bank, we will make an even stronger contribution to climate action outside of the EU. Just a couple of hours ago, together with other multilateral development banks and development finance institutions, EIB Global signed a contribution of $75 million to Alcazar Energy Partners II, an equity fund investing in renewable energy projects in the Middle East, North Africa, Eastern Europe and Central Asia. This is coupled with a $25 million investment by the Emerging Markets Climate Action Fund. The EMCAF Fund – which we launched with partners at COP26 – is an excellent example of a concrete, innovative and market-led approach to mobilising private investments for climate-relevant infrastructure, and to enhance multilateral finance and collaboration.
We are taking a close look at the G20 Report on the Capital Adequacy Framework of Multilateral Development Banks and the recommendations from the Independent High Level Expert Group that were released here at COP by Nick Stern and Vera Songwe. We hope to be able to discuss this very soon with our Boards.
Thank you for your attention.