European Investment Bank

Energy efficiency strategy, standards and investment

This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs.

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Paris alignmentReasoning
Paris alignedRobust energy efficiency standards are in place; energy efficiency first principle needs operationalising across sectors.
Overarching energy efficiency first strategy/principle
Prioritises energy efficiency in the energy sector, focusing on reducing energy demand in buildings and industry. Currently unclear how an energy efficiency first principle will be operationalised.
Transport energy efficiency Building energy efficiencyFinancial intermediary energy efficiency
Further clarification from EIB is needed. Likely prioritisation of zero tailpipe transport vehicles. Position on airports and roads currently unclear. (Both dependent on EIB Climate Bank Roadmap publication).New buildings in the EU must exceed national standards and outside the EU, buildings must follow a recognised certification scheme.Same criteria as EIB direct operations.

Explanation

Energy efficiency financing

Energy efficiency financing as a percentage of energy financing has been increasing at the European Investment Bank (EIB). It has been larger than renewable energy lending in 2 of the last 3 years.

Transport

The EIB Climate Bank Roadmap exludes any investment in the expansion of airports or conventional-fuelled aviation. On transport, the EIB states that due to the economic downturn from the COVID crisis, “it is proposed to adopt the recommended values for ‘’Do No Significant Harm’’ criteria for cars, vans and trucks across multi-benficiary-intermediary-lending ‐ type products.” This implies continued support for internal-combustion vehicles, with the EIB arguing that “this ensures that the EIB Group supports the more efficient (and smaller) half of the new fleet.”

Buildings 

In its Climate Bank Roadmap the EIB states that it will consider all projects that comply with national mandated standards as consistent with low-carbon pathways in the European Union (EU). This would cover both new buildings and the renovation of existing buildings.

Outside the EU, the EIB is considering deeming all buildings that adopt best practice, through international recognized certification schemes (e.g. IFC’s EDGE standard), as consistent with low-carbon pathways.

However, for projects specifically focused on energy efficiency, the energy performance standard of new buildings supported by the Bank will need to exceed national mandated standards. The EIB will still support the construction of certain types of new buildings that meet minimum legal standards for policy goals that aren’t energy efficiency.

There do not seem to be explicit standards for building renovation except that existing buildings must achieve ‘cost optimal’ refurbishment, defined by EU Directives. The bank has committed financing up to 75% of the eligible portfolio capital cost for energy efficiency projects. This will be channelled though the European Initiative for Building Renovation, which focuses on aggregation and new source of finance for energy efficiency.

Financial intermediaries

In the case of intermediated financing, and global loans or equity/debt funds dedicated to renewable energy and/or energy efficiency or climate action more generally, the EIB requires the financial intermediaries to apply the same eligibility criteria as for the EIB’s direct operations. This is welcome and is a best practice other MDBs should adopt.

Industry

E3G intends to expand this metric to include industrial energy efficiency in the future. It could also cover areas such as energy efficiency in public lighting, district heating/cooling and energy efficiency in SMEs. 

 

Last Update: November 2020

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