EIB Vice-President Nicola Beer 's keynote speech at the EU High-level conference at Hannover Messe 2024, on Investing in Industry. How to ensure clean, secure and affordable Energy for the Industry?

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Ladies and Gentlemen,

It`s a pleasure to be here at this “high-level EU-conference on Investing in Industry“ and to discuss with you, how to ensure clean, secure and affordable energy for the European Industry.

With 2023 having been the warmest year ever, and the 10 warmest years all having occurred in the past decade, we do not need to convince each other that to fight climate change is an urgency. What we do need to do, is to create a new momentum for accelerating investments for global climate action. And to move forward with confidence, adopting a “yes, we can and will” attitude. The UN`s researchers of the Intergovernmental Panel on Climate Change predict that the years to 2030 are our last window of opportunity to avert disastrous climate change effects. We must reduce emissions by 45% by 2030 to slow down global warming. 

Far too often we focus on the costs for fighting climate change. And far too rare on costs, we can avoid by reducing the effects of global warming to limit catastrophic weather-incidents, like heat and droughts, hazardous storms and flooding.  

Just last week, the Potsdam Institute for Climate Impact Research estimated that climate change will inflict losses to the global economy worth an annual $38 trillion by 2050. But, we should not underestimate, what has been achieved already in recent years. The deployment of clean energy has accelerated to levels, that were seen as unthinkable until recently, driven by falling costs and constant innovation. Investment in sources including wind and solar now far exceeds spending for fossil fuels, and the gap is set to widen further. The “rapid, non-linear” growth in heat pumps and electric vehicles is equally impressive, beyond the most wildly optimistic estimates of the previous decade.

Russia's war against the Ukraine and the ensuing global energy and food crises have made climate action — decarbonising our energy and transport systems in particular — even more urgent. Not just to save the planet, but to create new industries, boost economic competitiveness, enhance our strategic autonomy, and ensure a just transition away from fossil fuels for people and regions. Through the European Green Deal and European Climate Law, EU governments have unanimously committed to cutting their collective net emissions to zero by the middle of the century. And the EU-Commission (dear Kerstin Jorna) and the EIB collaborate closely to implement this decision.

Important: We cannot rely on public funding alone to mobilise the necessary investment-financing for the green and digital transition. We will only succeed, when we manage to turn the “need” for financing into an “investment case”. For this we need capital markets to play a bigger role in the financing mix of European businesses. Economies with deeper capital markets create more innovation and exhibit more growth.

Having deeper capital markets also improves the availability of long-term funding. Promoting Europe’s position as a global financial trading hub, cutting red tape, to be more attractive for institutional and retail investors, strengthening shareholder culture and building more public-private partnerships in Europe and worldwide, will be key to deliver the financing, speed-up and ensure, that no people or places are left behind.

Ladies and gentlemen,

It is therefore important, that the negotiations about the Capital Markets Union gained momentum at the EU leader`s summit last Thursday in Brussels – we need better conditions for private capital and entrepreneurs in Europe. The EU is the largest domestic market in the world, but it remains far behind the US, when it comes to mobilising private capital for investments. Currently, €300 billion of EU capital leave the EU to other, less fragmented, less taxed geographies each year, mainly to the US.

This is a key finding in the special report former Italian prime minister Enrico Letta has submitted. The report urges EU-leaders to set mobilising private capital for investments as priority. There is no lack of private money in Europe: private savings alone amount to €33 trillion. We need to scale up financing models that work today – and come up with new solutions that can be scaled up, quickly.

Going forward, Multilateral and National Development Banks, like the European Investment Bank, have a key role to play in:

  • taking the risks, that the private sector is not willing to take, 
  • looking into sectors where the economic profitability is yet unclear, and
  • bringing to the market, what we call “patient” capital.

And here the EIB Group, being the EU climate bank, is very ambitious and active: 

  • We issued the world’s first green bond in 2007 and decided to end financing for fossil fuels in 2019.
  • We achieved a record year of green finance with €49 billion in 2023.

This is more than double the amount of green finance from 2019, when the EIB Group embarked on its journey to become the EU climate bank. 

A review of our Climate Bank Roadmap has confirmed that the EIB Group is on track to achieve the goal of supporting €1 trillion of green financing this decade. But we don’t stop there. We are now working on the Climate Bank Roadmap 2.0, which will guide our activities from 2025-2030. We will present it at the UN climate summit COP30 next year.

For us, at the EIB, it has been our job for 66 years now to contribute to better living conditions for people in Europe, with a clear focus on climate action in the last decade.

We do this by financing  

  • projects that slow down climate change, such as offshore wind farms,
  • the expansion of the power grid,
  • modern regional trains,
  • climate-friendly buildings.
  • just transition projects: for example supporting the economic transition away from coal mining of Lusatia (Lausitz) region.
  • and projects that advance innovation: electrolyzers for hydrogen, battery technology and start-ups in the field of digitalisation.

An important part of our work at the EIB is to bring public and private sectors together to increase investment in such projects.

To put it more concretely:

  • We grant direct loans and venture debt to companies and projects.
  • For small projects, we offer loans or other assistance to intermediaries, such as local banks, which in turn provide finance to small firms.
  • Our advisory services offer a wide range of support for clients, who need help in developing a project or in finding the right financing.
  • For green projects, we provide innovative financing that is not easily available on the market, and we can offer grants and technical assistance to help projects succeed.

Small and medium-sized businesses have an important role to play in the fight against climate change. The EIB supports hundreds of thousands of small businesses. Much of the financing for small companies comes from the European Investment Fund (EIF), which is part of the EIB Group and specialises in small businesses and venture capital. The EIF offers loan guarantees and invests in venture capital funds that support clean technology.

Last year, the EIB Group`s climate action financing rose most significantly for renewable energy and lower carbon transport projects. Our clean energy financing alone rose to a record €21.4 billion. With the REPowerEU initiative, set up by the EU to decrease dependency on Russian oil and gas, we can invest an additional €45 billion in loans and equity financing for clean energy and manufacturing capacity for net zero technologies and products, over the next five years.

To give an example, just a week ago, we signed a loan contract with the municipality utility TEAG of €400 million for upgrading and digitalising the power gird in rural areas in Thuringia.

This is exactly the kind of project we love. Why?

  • It provides people in rural municipalities with modern power connections, that can flexibly feed in and out wind and solar power,
  • It guarantees net-safety for growing e-mobility and heating-pumps.
  • It helps the enterprises to decarbonise their business and so manage the green transition.
  • It offers the public utility TEAG the opportunity to export its large surpluses of wind-energy Europe-wide, bringing to life its contracts with Italian and Spanish power-providers.
  • It supports the ramp up of renewable energy in the European market – which makes us more resilient and independent from suppliers abroad.

In short: such projects make the green and digital transition a reality. Here go sustainable growth with new jobs and prosperity hand in hand with modern infrastructure and innovation, (which) we need to make Europe future-proof.

Ladies and gentlemen,

According to the International Energy Agency, around a third of the required cuts in emissions will need technologies, that are either not available or not cost competitive today. This means support for innovation must be at the heart of climate action.

Of course, we also provide investment financing directly to industry, especially to energy-intensive productions like chemistry and steel. Later, on the first panel, Otto Gernandt of H2 Green Steel will present his exciting business case, in combining windpower and hydrogen to produce low carbon steel. 

Scaling up such innovative solutions will not only help meet climate targets. It will support the competitiveness of our economies, strengthen energy security and create new jobs, all this while building a better, more resilient future for all of us.

20 years ago, we helped to establish offshore wind as a competitive and reliable source of energy. Now we are supporting ground-breaking battery technologies, floating windfarms, the development of green hydrogen, and innovation in sectors that are among the hardest to decarbonise, such as the manufacturing of steel or shipping.

Ladies and gentlemen,

We are proud to continue the EIB Group’s work in supporting innovation to accelerate the green transition while boosting our economies’ competitiveness, in close connection with the EU-Commission, dear Kerstin Jorna.

I`m looking forward to our discussions.