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European Investment Bank postpones decision on fossil fuel lending

European Investment Bank postpones decision on fossil fuel lending
FILE PHOTO: Smoke and steam billows from Belchatow Power Station, Europe's largest coal-fired power plant operated by PGE Group, at night near Belchatow, Poland December 5, 2018. REUTERS/Kacper Pempel -
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Kacper Pempel(Reuters)
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By Jonas Ekblom

BRUSSELS (Reuters) – The European Investment Bank, the world’s biggest multilateral lender, has postponed a decision on whether to stop financing fossil fuel projects to November, a senior EIB official said on Tuesday, to work out final details of the move away from coal.

The bank’s president, Werner Hoyer, is pushing for the bank to take the lead in financing sustainable projects, and proposed in July to stop its fossil fuel lending by the end of 2020.

But Germany, Europe’s biggest economy and the EIB’s biggest shareholder, wants the bank to continue to finance projects linked to natural gas.

“On the basis of what we discussed this morning I am increasingly confident that we will achieve final approval in November,” said Andrew McDowell, an EIB vice-president, told Reuters in an interview during the meeting.

The EIB’s board, made up mostly of European Union finance ministers, has been discussing ways to make the bank greener by ending financing for fossil fuel-powered energy projects, but some countries heavily dependent on coal or gas have opposed the total ban of fossil fuel lending.

Germany, Italy, Poland, Latvia and Spain want the bank to keep funding certain gas projects to help the transition from coal or nuclear power, or for energy security reasons.

McDowell said the delay would “allow some more national reflection” after some countries asked for clarification on the proposal from EIB to completely stop funding fossil fuel-linked projects from the end of next year.

EIB figures show it funded almost 2 billion euros ($2.10 billion) of fossil fuel projects last year and Green 13 lawmakers and environmental groups.

(Reporting by Jonas Ekblom, editing by Louise Heavens)

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