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New Energy World
New Energy World embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low carbon technologies.
EIB boosts clean energy financing by extra €30bn
9/11/2022
The European Investment Bank Group (EIB Group) is to support the European Commission’s REPowerEU plan with an additional €30bn in loans and equity financing over the next five years.
The additional funds from the Group (which comprises the European Investment Bank and European Investment Fund) will be directed to renewables, energy efficiency, grids and storage, electric vehicle (EV) charging infrastructure, and breakthrough technologies such as low carbon hydrogen.
The package of new, targeted financing approved by the EIB’s Board of Directors is expected to mobilise up to €115bn of new investment by 2027. This is in addition to the EIB Group’s current support for the energy sector in the European Union (EU), which has averaged around €10bn/y of financing over the past decade.
Commenting on the announcement, European Commission President Ursula von der Leyen said: ‘I welcome the EIB’s financial reinforcement of our REPowerEU plan, on top of the €300bn funds already available. With today’s EIB package, we can go even faster in cleaning Europe’s energy system and ending our dependence on Russian fossil fuels. The EIB Group’s contribution will help us ensure our energy security and reach our 2030 climate goals.’
While the additional EIB Group financing will focus on improving Europe’s energy security over the medium term and avert future supply shocks, EIB support for some efficiency projects could result in lower demand for gas as soon as 2023. The package follows a recent Board decision to approve €5.5bn in financing for projects in clean energy, energy efficiency and climate action, including new wind power in the Baltics, and upgrading transmission networks in Poland and Spain.
The EIB’s Board of Directors has also adopted a series of technical and policy measures aimed at accelerating the pace and maximising the impact of the new investment. Key elements include higher upfront disbursements, longer tenors that will make EIB loans to the energy sector more attractive, and a co-financing ceiling of up to 75% for projects contributing to the REPowerEU objectives, up from the typical 50% EIB limit per project.
Furthermore, the Board has introduced a temporary and exceptional extension of the exemptions to the EIB Group’s Paris Alignment for Counterparties (PATH) framework. In this respect, the existing exemption under the EIB Group’s PATH framework for projects with high innovative content will be extended to include all renewable energy projects and EV charging infrastructure inside the EU. This will allow EIB Group financing of a greater number of clean energy projects with a wider range of clients and utility companies contributing to the EU’s climate objectives and energy security. The extension will run until 2027, subject to a Climate Bank Roadmap review expected in 2025.
