The European Investment Bank has boosted its commitment to tackling climate change and the COVID-19 crisis. That can mean loans to finance renewable energy and health care, but it can also include advisory work. Here are some key projects in which the EU bank provides the insights on which companies and governmental institutions are building a cleaner, safer future.
Through the Green Gateways
Climate action requires changes in behaviour—and in the way we do business. That’s widely understood. The challenge is to know where to start.
This is why two projects we backed this year—the Climate Action Support Facility and the implementation of a climate action strategy—revolve around the developing support for climate finance for banks and financial institutions outside the European Union.
“Climate action is a field developing at a very fast-pace,” says Michael Steidl, a senior advisor at the European Investment Bank. “Banks in countries like Georgia, in the Southern neighbourhood, the Western Balkans, and sub-Saharan Africa , need help when it comes to knowledge transfer and best practice, so they can have a better understanding of the financial risks and opportunities that climate action brings.”
These initiatives aim to develop “Green Gateways” that stimulate green growth and strengthen the EU presence in these countries. There’s also a need for strategies related to the impact of climate risks and opportunities on banks’ and financial institutions business and financial planning, particularly in their small and medium-sized enterprise portfolios.
“The first step is for banks to reevaluate the risk in their portfolios and develop comprehensive and climate-friendly strategies to tackle them,” Steidl says. “We started this work with the Bank of Georgia thanks to a technical assistance programme financed under the EIB’s Eastern Partnerships Technical Assistance Trust Fund. Such projects are key as they also help banks identify opportunities in climate action and mitigate risk through risk measurement and reporting systems.”
We will be able to extend this support to banks in more countries thanks to a recent €20 million contribution from the German Ministry of the Environment, Nature Conservation and Nuclear Safety to our International Climate Initiative Fund.
The second step is to provide support for financial intermediaries, SMEs and mid-caps across the Southern Neighbourhood and Western Balkans countries covered by the EIB’s Economic Resilience Initiative by preparing investments that are in line with the EU bank’s climate action eligibility in renewable energy, transport, agriculture, water and wastewater, and solid waste sectors. The Climate Action Support Facility backs financial intermediaries in making investments in climate change mitigation and adaptation in all these regions. The Facility was created under the Economic Resilience Initiative Technical Assistance envelope financed with €90 million of the EIB’s own resources.
Financial inclusion across African, Caribbean, Pacific and Southern Neighbourhood countries
As a consequence of the pandemic lockdowns, many microfinance institutions halted loan disbursements and had to grant moratoriums to clients unable to repay their loans.
The European Investment Bank and the government of Luxembourg realised that microfinance institutions and the microfinance sector in general would need support during this challenging time, including outside Europe. That’s why we made COVID-19 crisis support central to the work of the Financial Inclusion Fund back in 2020.
The Financial Inclusion Fund is a technical assistance grant programme that offers microfinance service providers and other inclusive finance sector stakeholders in African, Caribbean, Pacific and Southern Neighbourhood countries the chance to apply for grants to improve their capacity in a range of key areas. The approved applicants had their projects implement throughout 2021.
Project development for COVID-19 crisis management in Romania
COVID-19 strained healthcare systems and business liquidity. In response, the European Commission launched two packages designed to use European Structural and Investment Funds to mitigate the impact of the pandemic. The Coronavirus Response Investment Initiative and the Coronavirus Response Investment Initiative Plus respond to the needs of the most exposed sectors, healthcare, SMEs and labour markets.
In Romania, about €900 million of cohesion funding went to the healthcare system and economy during the first year of COVID-19.
The Ministry of National Defence asked our Joint Assistance to Support Projects in Europe, JASPERS, to help prepare projects for EU financing. The projects initially focused on medical protection supplies and medical equipment. Later, JASPERS advice turned to the information needed for an EU funds application, as well as topics important for projects funded by the European Regional Development Fund.
“The assignment was indeed a very challenging one,” says Ana Maria Lupascu, task manager for the JASPERS assignment. “The situation during COVID was evolving very fast and not much was known about the mechanism to combat the spread of this disease. Ultimately, the JASPERS assignment contributed to improving the country’s preparedness and responsiveness to the pandemic.”