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.
European Bank for Reconstruction and Development
Non-fossil to fossil energy ratio and scaling up climate investment in all sectors
| Paris alignment | Reasoning |
|---|---|
| Some progress | Between 2019 and 2022 (the latest years for which information is available), for every USD 1 the EBRD provided to fossil fuels, USD 2.6 went towards clean energy, with USD 0.6 going to transmission and distribution (which cannot be attributed to any one energy type), and USD 0.7 to other energy projects (e.g. mixed energy, large hydropower, and biomass projects). This clean-to-fossil-fuel ratio is at the lower end of the range among the MDBs covered by the Matrix, and has not improved in recent years. The EBRD does, however, have one of the highest shares of climate finance as a percentage of total operations among MDBs, consistently hitting its 2025 target of at least 50% since 2021. |
Explanation
Non-fossil to fossil energy ratios
For every USD 1 the EBRD invested in fossil fuels between 2019 and 2022, only USD 2.6 went towards clean energy, with USD 0.6 going to transmission and distribution (which cannot be attributed to any specific energy type), and USD 0.7 to other energy projects (mixed energy, large hydropower, and biomass projects). While this reflects progress from the 2016–2019 period (where for every USD 1 the EBRD provided to fossil fuels, USD 2.1 went to renewables and USD 0.4 went to transmission and distribution) this clean-to-fossil-fuel ratio is at the lower end of the range among the MDBs covered by the Matrix, especially compared to public banks operating in the same region and who conduct the majority of their activities in middle income countries (MICs). While some recent large-scale investments in fossil fuels can be linked to energy security concerns in Europe, there is also a clear policy imperative to meet net zero in Europe and the EBRD should urgently seek to improve its clean-to-fossil investment ratio by phasing out fossil fuel projects wherever there is a feasible low-carbon alternative and by further scaling up investment in clean energy.
Climate finance
EBRD green economy finance (i.e. climate and other environmental activities) as a share of approvals stood at 58% in 2024, surpassing the Bank’s 50% target for 2025 for the fourth year running. The Bank has not made available the split between climate and other environmental activities within its green economy financing. Considering the EBRD is already consistently exceeding its target and the need to scale up climate investments in the face of the climate crisis, the Bank should aim to increase the target beyond 50% under its 2026–2030 Green Economy Transition 3.0 approach to build on its current momentum.
Recommendations:
- The EBRD should accelerate its trajectory to scale up renewable energy, transmission and distribution projects in comparison to fossil fuel investments. This should be in the context of the development of a long-term strategy for phasing out fossil financing. The Bank’s planned expansion to Sub-Saharan countries must take local needs and priorities into account but should not slow down a fossil-fuel phase-out strategy for the Bank’s existing portfolio.
- Considering the EBRD has consistently achieved its current green (climate and environment) finance target of 50% since 2021, it should raise its ambition in its forthcoming updated green strategy to respond to the increased need to mobilise finance for the green transition. This more ambitious target could be combined with greater integration of impact and mobilisation metrics and provide greater clarity on the proportion of green finance dedicated to climate.
Last Update: April 2025