This will ensure that public spending helps address both the current economic crisis and the ongoing climate crisis.’ ‘Governments should put climate action and resilience at the core of economic stimulus packages and prioritise support towards green firms. In fact, the EBRD’s own economists have said much the same thing: ‘Governments – while protecting their citizens medically and economically in the short term – must also look to the long term they should not be seduced into supporting fossil fuel use due to the currently low oil prices,’ they wrote in a report published in early April. The COVID-19 emergency must not become an excuse for the EBRD to double down on financing for fossil fuels. Among them is Serbia’s coal-reliant EPS, which has been enjoying generous EBRD funding for nearly two decades, despite the fact that it is expanding lignite mining and building new coal power capacities. In the wake of the COVID-19 pandemic, electricity utilities in at least three Western Balkans countries could be benefiting from EBRD support. Top economists – including Joseph Stiglitz and Lord Nicholas Stern – have argued that the best way out of this pandemic is a green stimulus, stepping up investments in energy efficiency and renewable energy.
It is high time that the EBRD takes a page from the European Investment Bank, itself an EBRD shareholder, which in November 2019 decided to cease support for fossil fuels by end of 2021. At least eight of the countries holding EBRD shares, as well as the European Union, have already declared a climate emergency. With fossil fuel lending still so high at the EBRD, GET risks serving as merely a fig leaf. Last year, the EBRD’s support for fossil fuels was surpassed by investments in renewables for the first time. The main beneficiary, receiving a total of USD 1.7 billion in EBRD support, was the controversial Southern Gas Corridor, a chain of gas pipelines from Azerbaijan to Italy.ĮBRD financing for fossil fuels seems to have peaked in 2018 at EUR 1 billion, the same year the Intergovernmental Panel on Climate Change warned that humanity has until 2030 to halve its emissions to avert the worst impacts of a runway climate breakdown. The bank has been extending public money to various oil and gas projects across eastern Europe and the Caucasus, Central Asia and the Mediterranean. Over the same period, the hottest decade on record, 41% of the EBRD’s energy-related lending went to the fossil fuels industry. Nevertheless, although investments in renewables kept growing after 2015, when GET was introduced, this strategy has done nothing to curtail the EBRD’s fossil fuels spending. Countries in southeastern Europe, where coal remains a major source of energy, have seen the smallest share of the EBRD’s renewables investments – though rather due to lack of interest from governments than from the bank. To a large extent, this approach was meant to embody the EBRD’s commitment to the 2015 Paris climate accord.Ī new Bankwatch analysis finds that in the period 2010-2019, of the EBRD’s total energy-related lending of EUR 51.4 billion, 23% went to renewables, primarily in the EU. Introduced in 2015, the EBRD’s GET initiative was intended to enable an increase in financing for projects that facilitate the energy transition to up to 40% of the bank’s annual portfolio by 2020. The EBRD has argued that crisis recovery is an opportunity to “ tilt to green”, but can the bank kick its own fossil fuels habit?
At the same time it is also considering over EUR 700 million in financial aid to coal-based energy utilities and gas infrastructure projects from Tunisia to Kazakhstan, at least in part in the context of the COVID-19 response. The EBRD is currently in the process of renewing its commitment to facilitating environmentally sustainable economies through its Green Economy Transition (GET) strategy.
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