Promotion of green finance

Explanation

The EIB Climate Bank Roadmap (CBR) 2021–2025 includes “accelerating the transition through green finance” as one of its four workstreams. To achieve this, the Bank has committed to increasing and mainstreaming green finance throughout its operations and sectoral approaches. Within the EIB, the Sustainable Finance Division of the Finance Directorate is mandated to develop green financial products in its areas of operations.

Greening the system

The EIB has played a pivotal role in developing regulatory and supervisory frameworks both within the EU and internationally, notably contributing to the EU Taxonomy for sustainable activities and EIB Global’s Greening Financial Systems technical assistance programme. As part of the EU Platform on Sustainable Finance, the EIB contributed to the advancement of the EU sustainable finance framework and advised the European Commission on data quality and availability for EU Taxonomy disclosures through the Platform’s Recommendations on Data and Usability. Internationally, the EIB has contributed to the taxonomies working group of the International Platform on Sustainable Finance.

The EIB also engages with clients and other International Financial Institutions (IFIs) on a voluntary basis to help them overcome the challenges of applying the Taxonomy. Learnings from this engagement are in turn fed back to the Platform on Sustainable Finance.

Beyond its work on taxonomies, the Bank has launched technical assistance programmes (both within the EU and internationally) to further catalyse green finance mobilisation. The Green Eligibility Checker and the Green Gateway are flagship advisory programmes which promote effective implementation and reporting of green financing by financial intermediaries.[1] Moreover, in 2022 EIB Global launched the Greening Financial Systems technical assistance programme to build capacity in green financing practices at central banks, supervisory authorities and commercial banks in developing countries.

The EIB is also a member of the Network of Central Banks and Supervisors on Greening the Financial System (NGFS) and a partner of the Coalition of Finance Ministers for Climate Action.[2]

Innovative financial instruments

In recent years, the EIB Group has developed an extensive array of innovative financial and non-financial instruments to catalyse the mobilisation of green finance by sovereign and private sector clients. These instruments include:

• InvestEU: The EIB’s flagship guarantee-based instrument has served as the EU’s long-term financing arm since 2021. The InvestEU Fund was
• Counter-guarantee scheme for European wind energy manufacturing: During COP28, the EIB committed to further develop its guarantee-based instruments by offering EUR 5 billion to support Europe’s wind manufacturers. This will ensure that, when commercial banks provide guarantee lines to wind industry developers and manufacturers, the risk lies with the EIB rather than wind industry actors themselves, enabling commercial banks to provide more guarantees for the development of wind energy projects in the EU. As part of the Clean Industrial Deal, two new counter-guarantees schemes are planned for manufacturers of electricity grids components, and for corporate power purchasing agreements undertaken by small and medium enterprises (SMEs) and energy intensive industries for indicative amounts of EUR 1.5 billion and EUR 500 million respectively.
• Synthetic securitisation for climate-related projects: The EIB has undertaken several synthetic securitisation transactions with domestic banks (including Santander and Raiffeisen Bank) in recent years. This allows credit risks to be transferred from domestic banks to the EIB, thus freeing up domestic banks’ lending headroom for climate projects.
• Blended finance offers: Blended finance combines long-term financing from the EIB with EU grant financing to attract loans or equity investments from public authorities and private financiers to serve strategic objectives. Examples of blended finance schemes which the EIB is involved in within the EU include the Public Sector Loan Facility and the Alternative Fuels Infrastructure Facility. Outside the EU, the EIB is also a partner in the Western Balkans Investment Framework and the Africa Investment Platform.
• Climate-resilient debt clauses: The EIB is part of a group of MDBs which have taken part in a pilot project to deploy climate-resilient debt clauses in Barbados, with the objective to offer this type of instrument more broadly in least developed countries (LDCs) and Small Islands Developing States (SIDS). These mechanisms enable the deferral of principal payments in the event of natural disasters linked to climate change. This can provide borrowers with fiscal breathing space and allow them to repurpose financial resources away form debt servicing and towards disaster response and recovery needs.
• Bridging financing gaps in climate-related projects: The EIB provides temporary financing to cover companies’ short-term costs until regular long-term financing is secured. An example of this is the EUR 100 million unitranche loans agreement provided to support new renewable energy capacity in Spain.

Aside from the above instruments, EIB Global is working with peer institutions to contribute to the IMF’s Resilience and Sustainability Facility (RSF). The EIB and its partners have set up a cooperative approach with Rwanda to facilitate public–private partnerships and crowd in private capital, strengthening the catalysing effect of the IMF’s RSF arrangements.

Green bonds

The EIB has an extensive and pioneering green bond programme. In July 2007 the EIB was the first institution globally to issue a green bond – the Climate Awareness Bond (CAB) – dedicated to renewable energy and efficiency projects. The Bank was also responsible for the green bond market’s first comprehensive impact report in March 2015.

The EIB’s CABs are aimed at climate change mitigation projects in the fields of renewable energy, energy efficiency, low-carbon transport and innovative low-carbon technologies. Since 2018, the Bank also issues Sustainability Awareness Bonds (SABs), which finance projects with environmental and social objectives beyond climate change mitigation. Notable relevant objectives identified in the SAB framework include: the sustainable use and protection of water and marine resources, pollution prevention and control, protection and restoration of biodiversity and ecosystems, access to water sanitation, and natural disaster risk management.

The gradual alignment of eligibility criteria for CAB and SAB projects with the proposed EU Taxonomy for green, sustainable activities and the EU Green Bond Standard is an encouraging development. It holds promising potential to enhance investor confidence in green finance, increase transparency, and raise standards through the sharing of best practices. The EIB is actively involved in shaping the EU Green Bond Standard, which will mandate that the funds from green bonds are directed towards projects that comply with the EU Taxonomy. EIB launched  its first CAB issuance fully aligned with the EU Green Bond Standard, the first supra-national bond to do so, in April 2025.

As of 2024, the EIB has issued more than EUR 100 billion in CABs and SABs across 23 currencies since 2007, thereby making the bank the largest MDB issuer of green bonds, with EUR 14.6 billion in 2023 alone. CABs and SABs represented 29% of EIB’s funding programme in 2023 (up from 7% in 2019, 14% in 2020 and 20% in 2021, but down from 45% in 2022).

The EIB has also been a leader in developing innovative green bond schemes. Alongside asset management firm Amundi, it launched the Green Credit Continuum (Greco) programme in July 2019 to facilitate access to green bond financing for small-scale green projects and small and medium-sized enterprises. This initiative was named Green bond fund of the year by Environmental Finance in 2020, a news and analysis outlet on sustainable finance. In addition to this, the EIB has launched the Green Bond Purchasing Programme, for which first operations concluded in 2021. This programme involves the EIB catalysing additional private sector financing by purchasing green bonds issued in EU capital markets, thereby complementing its long-term loan financing offering and promoting companies aligning with the EU Taxonomy.  

The EIB has also been supporting the development of green bond markets globally. The Bank is a founding member of the Global Green Bond Initiative (GGBI), an EU-led Global Team Europe Initiative intended to facilitate the flow of private capital from institutional investors into climate and environment projects in EU partner countries. The EIB also collaborated with the GCF to launch the Green Debt Advisory Platform in early 2023. This platform provides technical assistance to African countries for identifying bankable green projects and strengthening green debt ecosystems and institutions, with the aim to anchor investment in green bond issuances. In June 2023, it was announced that the GGBP would launch further technical assistance schemes to develop and strengthen green bond markets in emerging markets and developing economies. A strategic partnership was signed in September 2023 between the GGBP and the Inter-American Development Bank (IDB) to pursue these objectives in the Latin American and Caribbean region. The EIB has also notably been undertaking work in partnership with China on green bonds, including the development of a common language and terminology on green finance.

Recommendations:

• Considering the EIB’s climate adaptation finance remains relatively low (11% of climate finance in 2024), the Bank should work on further developing its offer of climate adaptation-focused green financial products.
• The EIB could make further use of synthetic securitisation by applying this approach to its own operations, in order to create further lending headroom. This could draw on the successful example of the African Development Bank (AfDB) through the groundbreaking “Room2Run” deal, which transferred (for a fee) the risk embedded in USD 1 billion of loans to a group of institutional investors and the UK’s foreign affairs ministry.
• As many countries implement green finance policy frameworks rooted in national plans, there is an opportunity for the EIB to make greater use of its upstream policy work to mobilise green finance at scale by accelerating the development of these frameworks at national level. This could, for instance, include increased work to translate national plans into tools like taxonomies, and would help client countries pre-empt and respond to the requirements and opportunities of private sector transition planning.

[1] For further information, see the “Technical assistance for implementing Paris goals” metric.

[2] The NGFS is a network of central banks and financial supervisors aiming to accelerate the scale-up of green finance. The Coalition of Finance Ministers for Climate Action is a grouping of fiscal and economic policymakers from over 90 countries which seeks to facilitate the deployment of policy instruments to accelerate the climate transition.

[3] The Fund is a collaboration between the EIB and the European Commission.