EU bank tees up fossil fuel compromise ahead of crucial vote

(EurActiv, 12 Nov 2019) The European Investment Bank will decide on Thursday (14 November) whether or not to purge its loan books of fossil fuel projects. All signs point to the EU lender striking a compromise with countries like Germany and Italy, which want more leeway for new gas projects.

In a draft update to its energy lending policy published in July, the EIB proposed to “stop lending to fossil-fuel energy projects by the end of 2020″, in a move meant to make the bank’s actions compliant with the Paris Agreement on climate change.

But the 28 EU member states, which jointly own the EIB, looked to water down that ambitious update over the last three months. So much so that the bank’s leadership postponed a decision on the policy from October to November.

Now the EIB is set to offer a compromise intended to win consensus among its 28 shareholders, which would include delaying the 2020 phase-out deadline for certain projects and offering advantageous lending conditions to all member states.

In a letter to the bank’s board of directors dated 5 November, EIB Vice-President Andrew McDowell, who oversees energy policy, offered to amend the current draft of the update when it comes to gas projects that have obtained the blessing of the European Commission.

“The deadline for appraisal and approval of gas projects on the 4th list of Projects of Common Interest (PCIs) co-financed by the ED budget (and not just the Connecting Europe Facility) could be extended by one year – until end 2021,” the letter reads.

Extending the 2020 deadline is a clear nod to the Commission, which has lobbied for more time for gas since the draft proposal was first published. A source within the EU executive told EURACTIV that McDowell’s new date is more in line with the institution’s thinking.

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EurActiv, 12 Nov 2019: EU bank tees up fossil fuel compromise ahead of crucial vote