In July, the European Investment Bank (EIB) published a draft of its proposed new lending policy for energy projects, which includes extra money for poorer EU countries, greater focus on renewables and phasing-out support for fossil fuel infrastructure after 2020. Werner Hoyer explains what this implies.
Werner Hoyer is President of the European Investment Bank (EIB). He spoke to EURACTIV’s Claire Stam on the sidelines of the UN climate action summit in New York.
What do you take from Greta Thunberg’s speech today?
She is doing a great job. She is a symbol of a generation that has found its voice. Germany’s President Frank-Walter Steinmeier recently said that climate protests show it is possible to mobilise young people for political motives.
It is indeed possible to mobilise them but it is much more important that they mobilise us. And that was visible during the past weeks. I think it is really a mass movement and this is extremely encouraging.
How does this unprecedented youth movement influence the EIB?
We need political support as we are an institution owned by the 28 EU member states. At the end of the day, I must convince our Board that is representative of the 28 governments that we are on the right track.
This movement is extremely encouraging for us because we are by far the biggest climate action lender to projects worldwide. This has sometimes been seen critically, now this is over. People are satisfied that the EIB Group is a financial agent that is able to mobilise private capital for the purposes of climate action. All of a sudden, we are center stage.
The European Commission wants to turn the EIB into a climate bank. How would you do that?
Ursula von der Leyen said she wanted the EIB to be the climate bank. We have been a climate bank for thirty years. We have been the driving force behind the multilateral development banks in Paris four years ago.
There, we pledged that 25% of our activities are in precisely defined climate action. We delivered on that, we are now at 28% and we are now proposing to our shareholders to increase that share to 50% by 2025.
This is extremely ambitious, but we don’t stop there. We will also align the remaining 50% of the lending with the Paris Agreement. That means projects that are not directly linked to climate must not contradict our climate ambitions. We aim for climate in everything we do.
Does the European Commission’s plan for sustainable finance provide you with useful tools?
I very much welcome the efforts of the European Commission to present a plan for sustainable finance that includes a green taxonomy and provides a better definition of – for instance – what one considers a green bond.
Regarding green bonds, we have been the main driver behind the Green Bonds principles. At the end of the day, we cannot just take a piece of white paper, paint it green and present it to investors we would like to attract to our projects. They must know exactly what we finance with these green bonds.
These efforts however must also take place on the global scale. The European Union must continue to be in the lead and convince our partners around the world that we need to have comparability.
Are you disappointed that some member states are already pushing back on the proposals you presented earlier this month?
I am not disappointed at all, I am encouraged. I have the feeling that we will get a lot of support when we convene in October for the next Board meeting.
There is no doubt that some regions or countries will be more affected than others by the transition to a low-carbon economy. Some countries are still heavily dependent on fossil fuels, not only for their energy supply or energy security but also for jobs and growth. They are reluctant and hesitant.
I fully support a just and fair transition. If we don’t make that transition now, we face the risk of sitting one day on stranded assets with an economic lifetime of 25, 35 or even 40 years.