EBRD climate investment reaches €15 billion

By Svitlana  Pyrkalo

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At a time when the world’s gaze is firmly fixed on sustainable energy and the fight against climate change, the EBRD has hit a new climate finance landmark.

The EBRD’s investments under its Sustainable Energy Initiative have now reached €15 billion since the initiative was launched in 2006. The investments have supported over 850 projects worth over €80 billion.

The new EBRD milestone coincided with an important step forward in the global drive to protect the environment and to invest in a sustainable future.

Strong declarations by 120 political leaders at a 23 September summit in New York called by UN Secretary General Ban Ki-moon raised hopes for success in delivering a new global treaty on reducing emissions in Paris next year.

The stakes are high after a similar attempt failed in Copenhagen in 2009.

But this time there is greater optimism. An increased sense of urgency was underscored ahead of the summit by the hundreds of thousands of people who took to the streets to demonstrate against climate change, most notably in Manhattan, but also in more than 160 other cities around the world.

The EBRD took its own delegation to the summit, a senior team led by Managing Director for Energy Efficiency and Climate Change, Josué Tanaka.

It was an opportunity for the EBRD to show how it was successfully stepping up the pace of sustainable energy investments. They now account for about one third of the Bank’s total annual financing, a record amongst multilateral institutions.

Mr Tanaka was able to announce that the EBRD had already more than delivered on a pledge made to the U.N. Secretary General at the Rio +20 Conference in 2012, when the Bank signed up to the UN Sustainable Energy for All (SE4All) initiative to modernise energy supplies and increase energy efficiency and the use of renewable energy sources.

“We are proud to say that we don’t shy away from big commitments, and we exceed them. Two years ago in Rio, at a global gathering which discussed global solutions, we promised to invest US$ 8 billion by the end of this year,” Mr Tanaka said.

“We exceeded that number in June, and now are ahead of our own target by a quarter of a billion dollars. Since 2006 the EBRD has consistently exceeded targets for financing sustainable energy, making a real difference to people’s lives, economic growth, and energy security in the EBRD region,” Mr Tanaka said.

The EBRD delegation also took an important message to the summit about the crucial role that funding from the private banking sector could play in climate change financing.

A meeting the previous day in New York, staged by the EBRD together with Bloomberg New Energy Finance (BNEF) and the Finance for Resilience (FiRe) initiative, brought together leaders in the climate finance community from both private sector and multilateral development banks under the banner “Building a Global Alliance of Sustainable Energy Financing Banks.

On the agenda at that conference was an EBRD initiative for private sector banks to scale up energy efficiency financing by US$ 5 billion in the next three years.

“The EBRD has a proven model for financing step-change improvements in energy efficiency. Their initiative, to share this knowledge globally, became a FiRe winner at the BNEF Summit in April,” said Michael Liebreich, Founder of FiRe.

Private financing plays an important role in complementing public funding for climate change investment, especially at a time when state coffers remain stretched.  Multilateral development banks (MDBs) play a key role in triggering this finance.

A report from several MDBs, including the EBRD, released ahead of the summit showed how they were collectively making a key contribution to financing. The report by the African Development Bank, the Asian Development Bank,  the EBRD, the European Investment Bank  the Inter-American Development Bank and the World Bank Group (WBG) said they had provided almost US$24 billion worldwide in financing in 2013 for projects in developing and emerging economies that address the challenges of climate change.

In total, since the joint tracking of climate finance began in 2011, US$ 75 billion has been provided by the MDBs.

The summit was also an opportunity for the EBRD to show how other powerful partnerships can help galvanise climate change financing.

In addition to using its own funds, the EBRD is helping to deliver financing from multi-donor funds such as the Climate Investment Funds (CIF) and the Global Environment Facility (GEF) that seek to scale up climate finance via concessional funding backed by knowledge sharing and advice. 

Mr Tanaka said such partnerships had “been very productive, allowing the EBRD to deploy its sustainable financing expertise in new areas while clearly demonstrating the catalytic role of climate funds, particularly in the private sector”.

He said: “bringing good projects forward is the other side of the key challenge – once the funds become available, they need to have a strong pipeline of projects to absorb them to deliver the outcomes needed to fight climate change.”

Combining its commercial project financing with donor support for grant co-financing, concessional funds, and technical cooperation, the EBRD’s business model had become an even more effective tool, he said.

The advantages of such a collaborative approach were highlighted in a new publication released last week EBRD Climate Finance Global Partnerships – Accelerating the response to Climate Change.

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