Friday, March 29, 2024
 
 

EIB finances sustainable transport, renewable energy

The EIB said passengers across Europe will benefit from better transport following the EIB backed acquisition of new trains for the Hauts de France and Tours regions of France and new tram-trains in Chemnitz, Germany alongside upgrading key road bottlenecks in Poland.

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The European Investment Bank (EIB) – the financial arm of the EU – approved on February 2 plans to further strengthen the EIB Group’s environmental and social policy.

“The EIB Group ambition is second to none when it comes to setting high social and environmental standards for all its projects,” EIB President Werner Hoyer said. “This week’s constructive discussions with leading civil society experts will help to further strengthen our commitment. Today the EIB Board confirmed our first group-wide environmental and social policy, underlining the EU Bank’s leadership in environmental and social sustainability, as well as in climate action,” he added.

The Board also approved €3.2 billion of new financing for 16 projects to support climate action, help businesses deal with the impact of the COVID pandemic and finance sustainable transport and education across Europe and around the world.

At the first board meeting of the year the EIB hosted a day of in-depth discussions with nearly 200 NGOs and civil society organisations including dedicated environmental, sustainable transport, energy, conservation, development, sustainable finance and human rights groups.

The EIB on February 2 approved the new Environmental and Social Sustainability Framework (ESSF). As part of the framework, for the first time a Group-wide Environmental and Social Policy outlines the Group’s vision on how to address the environmental and social challenges we are facing and uphold human rights in all of its activities.

In addition, the framework includes a set of revised EIB Environmental and Social Standards, including a new standard on intermediated finance.

Through the Environmental and Social Sustainability Framework, the EIB Group will focus on sustainable and inclusive development, committing to support the transition to economies and communities that are climate and disaster resilient, low carbon, environmentally sustainable and more resource-efficient, the EIB said.

The new Environmental and Social Sustainability Framework follows an extensive public consultation and will apply to all new projects as of 1 March 2022.

The EIB said passengers across Europe will benefit from better transport following the EIB backed acquisition of new trains for the Hauts de France and Tours regions of France and new tram-trains in Chemnitz, Germany alongside upgrading key road bottlenecks in Poland.

The EIB also approved financing for construction of 15 large scale solar power plants in Aragon, Castilla La Mancha and Castilla y Leon in Spain.

New water investment across Caribbean islands impacted by climate change will be backed by a new EIB streamlined financing initiative that will both improve climate resilience and enable healthier oceans. The EIB also backed support for investment by smaller and medium-sized water utilities in the Italian region of Veneto.

Moreover, the EIB agreed to support the renovation and construction of 30 schools across Ireland and a new training centre in Brussels and health investment in France. People living in Warsaw will benefit from new investment to improve social housing and urban investment in German will be accelerate through a new regional municipal financing programme.

Building on the EIB’s strong support for companies impacted by COVID-19 related challenges the EIB also agreed new business financing in Spain and industrial investment in France.

However, CEE Bankwatch Network said the EIB’s set of new environmental and social standards, despite some last-minute changes, leave the door open to human rights abuses and biodiversity destruction.

However, civil society groups criticized the EIB plans noting that despite some improvements, the new standards fail to address many of the concerns raised by civil society organisations during the revision process. In a letter to the EIB Board sent last week, 22 civil society groups urged the Directors representing EU Member States and the European Commission to include explicit procedures in the policy to prevent human rights violations in its projects, to end the Bank’s hands-off approach to projects financed via secretive financial intermediaries and to avoid double standards for biodiversity rules depending on whether a project is in the EU or not, CEE Bankwatch said.

The new policy includes no significant improvement in human rights promotion and protection. Without a clear system of human rights due diligence and explicit requirements for the bank’s clients to conduct human rights impact assessments, the EIB is in danger of continuing to inadvertently fund human rights abuse, CEE Bankwatch said.

In Kenya, a road connecting Mombasa and Mariakani, which is co-financed by the EIB, resulted in more than 500 complaints related to rights violations against the individuals and communities living along the road. Many people have been left without proper and timely compensation or the possibility to work, families were forcibly evicted overnight, and others faced intimidation.

In Nepal, the construction of an electricity transmission grid funded by the EIB threatens to intrude on ancestral lands of indigenous communities, damaging their forests, community resources, livelihoods, health, and spiritual practices. In April 2021, the EIB Complaint Mechanism concluded that the bank overlooked the project’s impact on Indigenous Peoples, despite the concerns raised by impacted communities.

A third of the EIB’s investments in 2020 – a total of €22.6 billion – was carried out through financial intermediaries. Due to the secrecy of commercial banks, the public has little idea of what happens to this money, whether it is effectively used and whether it causes environmental and social damage.

The EIB has introduced a long-awaited new standard on financial intermediaries. Yet the standard still perpetuates the bank’s hands-off approach to risky projects funded via unaccountable banks or funds. Even environmentally and socially risky projects will not be subject to public disclosure. The rules require financial intermediaries to comply with social and environmental standards, but the EIB fails to commit to systematically checking and ensuring compliance, leaving intermediaries to police themselves, CEE Bankwatch said.

The new policy offers better protection for biodiversity in many ways, but applies double standards regarding protected areas and internationally recognised areas of biodiversity such as Emerald, Ramsar and UNESCO sites. In the EU and accession countries, an appropriate assessment in line with the EU Habitat Directive is required in order to decide whether a project can be implemented without damaging the area, while in the rest of the world no equivalent is prescribed.

“The EIB’s self-proclaimed leadership in EU development finance has disappeared in a haze of understatements with the new policy,” CEE Bankwatch Network Policy Officer Anna Roggenbuck said. “With no clear EIB role in safeguarding human rights and requirements for promoters to conduct human rights impact assessments, a complete lack of responsibility for its financial intermediary investments and double standards in assessing projects impacting biodiversity inside and outside of the EU, the EIB is not ready to become ‘EIB Global,” she added.

 

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Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

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