Building a Green Future

EBRD’s Investments in the Decarbonisation of the Built Environment (2016-2022)

Background

The decarbonisation of the construction and buildings sector is crucial for addressing the global climate emergency, as buildings are responsible for more than one-third of carbon emissions worldwide. The European Bank for Reconstruction and Development (EBRD) has identified decarbonisation of the built environment as a key thematic area under its Green Economy Transition (GET) 2.1 Approach. This cluster evaluation aimed to provide evidence of the effectiveness and efficiency of the EBRD’s approach to decarbonising the built environment, covering 11 mature investment projects in five countries.

Main findings

The evaluation found that the cluster projects were aligned with the EBRD’s strategies and relevant to clients’ needs. However, the coherence with the wider objective of accelerating and scaling up decarbonisation was mixed, with strategic documents providing limited guidance on expected results and targets. The additionality of the projects was also mixed, with large international corporates showing less clear additionality compared to public sector and local private sector clients.

The evaluation highlighted several limitations in the EBRD’s current approach to decarbonisation projects. These include weaknesses in ex-ante modelling of environmental outcomes, which often relied on inappropriate assumptions or poorly developed models. This affected the Bank’s ability to identify, incentivise, prioritise, and monitor the most environmentally impactful projects. Internal incentives were also not aligned with better environmental outcomes, raising the risk of missed opportunities to expand the environmental impact. 

Despite these challenges, the evaluation found that the actual construction and renovation financed by the EBRD was generally highquality and in line with international standards. However, there was a significant divergence between the Bank’s original forecast and the revised estimate for CO2 savings, driven by weaknesses in ex-ante modelling and challenges in implementation. Private sector projects performed better than public sector projects, which faced delays and cost overruns.

Beyond direct environmental savings, the cluster projects delivered wider environmental benefits, including support for corporate climate governance and contributions to other Transition Qualities (TQs) such as Inclusion and Competitiveness. The evaluation also observed important behavioural changes and quality of life improvements, particularly in public sector projects. However, there was limited evidence of systemic change, with policy engagement directly targeting national gaps in decarbonisation being rare in the cluster countries.