Date: 19 September 2003
Speaker: Peter Sedgwick, Vice-President, European Investment Bank
In its function as a policy-driven public institution, the European Investment Bank (EIB) finances projects that promote European Union (EU) policy priorities. As environmental issues have gained more ground within the EU, environmental considerations play an increasing role in the EIB’s investment policy.
Environmental considerations have a two-fold impact on the EIB’s investment strategy: on the one hand through direct investments in the environmental sector, e.g. the funding of renewable energies, such as windmill parks, and, on the other hand through the mandatory environmental auditing of all projects. In the EU and the accession countries, which account for an increasing share of investments, all projects should comply with both national and EU environmental law, including among others the EIA (Environmental Impact Assessment), the IPPC (integrated pollution prevention and control) and the EMAS (environmental management and audit system). The reconciliation of the various economic, environmental and social objectives is guaranteed by the EIB’s multi-disciplinary due-diligence approach, which requires the joint-expertise of specialists in all relevant fields in the project’s assessment process.
In the period of 1999-2002, €32.3 billion were allocated for direct investments in the environmental sector (€11 billion in 2002 alone), equaling 29% of total lending. Thus the EIB missed its goal of 33% by a slim margin. In compliance with the EU’s key environmental policy objectives, including climate change, urban renewal and the Water and Renewable Energy Initiative, projects supporting these objectives have accounted for the largest share of endorsed funding. In 2001-02, projects in urban transport have been top priority.
As mentioned above, the EIB not only finances projects within the EU, but also in the accession countries, the partnership countries in the Mediterranean, the ACP countries and in Latin America and Asia. The emphasis, however, rests to a large extent on the accession countries. In recent years investments in the accession countries have been stepped up significantly, reaching €6.3 billion in 2001-02, of which €1.8 have been allocated for environmental loans. It was the intention of the EIB to facilitate the accession countries’ pursuit to fulfil the acquis communautaire as scheduled in general and to bring these countries’ waste management practices up to EU standards in particular.
For the coming years the EIB aspires to strengthen its environmental orientation further, by meeting the above-mentioned threshold of 33% and by increasing the share of the renewable energy investments to 15%, i.e. €500 million of the energy portfolio within five years. These goals seem achievable as both institutions and investors are increasingly interested in such investments.
Click here to see the slides of Mr. Sedgwick’s presentation