Is the EIB cooling climate change or fueling it? New report sceptical about EU bank's investments in renewables

With the European Commission sponsored Green Week underway in Brussels, a new study has found that the European Investment Bank's commitment to investing in renewable energy is in serious doubt owing to the EIB's opaque information procedures and its definition of renewable energy projects. "Positives undermined: the EIB's lending for renewable energies", published by CEE Bankwatch Network and Friends of the Earth International (FoEI), demonstrates how this European institution is part of the problem rather than part of the solution when it comes to combating climate change. [1]

At the Bonn Renewables conference in June 2004, the EIB declared that the bank's lending for renewable energies has been significant, totaling over EUR 1.6 billion in the period 1999-2003 of which approximately EUR 300 million was lent through intermediary banks for the financing of small and medium sized renewable energy projects. Also at Bonn the EIB announced an ambitious target of increasing its funding for renewables by up to 50 percent of its financing for electricity generation in the EU by 2010.

To verify the EIB's declarations, and as a result of the EIB's refusal to present detailed information on renewable projects financed through its global loans to financial intermediaries, CEE Bankwatch Network and FoEI asked 386 intermediary banks to provide a list of renewable energy projects financed from EIB monies in the period 1999 to 2003.

As detailed in the new study, responses from the 73 banks which did respond revealed no evidence about a concrete renewable energy project being financed. Some of the respondents claimed no renewable projects have been financed or are in the funding pipeline, even though the EIB pointed to them as having provided financing for renewables. Other banks refused information in general based on 'data protection'.

The study also looks at various problematic aspects of renewable energy projects financed from the EIB's direct loans - some of them, especially large hydropower projects which the EIB clearly includes as renewable investments, are of serious concern in terms of their negative environmental and social impacts. The Nam Theun 2 Hydroelectric Project in Laos, backed for funding by the EIB in April 2005, fails to comply with six of the seven Strategic Priorities laid out by the World Commission on Dams. [2] These include the resettlement of affected indigenous people, economic unfeasibility as well as negative environmental impacts.

Magda Stoczkiewicz, leading the EIB reform campaign for CEE Bankwatch and FoEI, commented: "As this study amply demonstrates, the EIB needs profound reforms to gain credibility with the public. It urgently needs to change its access to information policy so that thorough information related to its operations and projects is available. Such non-transparent behaviour from European institutions such as the EIB is among the reasons for EU citizens deciding to turn their backs on the European Union."

As well as having a poor record in financing renewables, the EIB remains a significant supporter of road and air transport as well as fossil fuels. Pouring more money into fossil fuel projects leaves a legacy of further harmful emissions, increasing the global threat of climate change - and leaves the EIB with a substantial carbon footprint of its own.

Stoczkiewicz continued: "The EIB must drastically reduce its support for carbon heavy sectors such as road and air transport and fossil fuels and instead focus on real investments for renewables, energy efficiency and environmentally friendly transport modes. Currently, when it comes to combating climate change, the EIB is a part of the problem rather than part of the solution."

View this new study, at the Bankwatch website.

For more information contact:

Magda Stoczkiewicz
CEE Bankwatch/FoEI
Tel: +31 475 867637

In French:
Greig Aitken,
Tel: +420 777 847 430

Notes for editors:

1. The study was released during the first ever street exhibition of posters on the EIB entitled "EIB: Public Funds for Public Benefit", a part of civil society's call to the European Investment Bank's Governors and European policy-makers to work together to make the EIB an institution that supports people and the environment in a transparent manner.

2. International Rivers Network: An Analysis of Nam Theun 2 Compliance with World Commission on Dams Guidelines, 2001.