Financial institutions around the world are leading by bending investments in old-fashioned coal power in order to address climate change. Will the EBRD be next?
The last few months have seen an unprecedented wave of positive commitments from big public financial institutions to virtually end financing coal power. This includes the World Bank, the European Investment Bank, the French Development Agency (AFD) and the Export-Import Bank (Ex-Im Bank) of the United States – as well as the United States, Norway, Sweden, Denmark, Finland and Iceland ending overseas funding to coal power. Who’s next?
On 30 September, the European Bank for Reconstruction and Development (EBRD), one of the world’s biggest public financial institutions, closed its consultation process on its new policy on lending to energy projects. Next step: The 64 countries which have a seat on the Bank’s Board of Directors will vote on 26 November on what kind of energy projects the EBRD’s money will be used for.
WB, EIB, EBRD… You might wonder what this alphabet soup has to do with you. It concerns all of us because public financing is essentially the money of the people – my money, your money – and if we want leadership on climate change, that money should be put to good use.
Take a quick look at the EBRD’s current energy portfolio. Almost half of the EBRD energy investments in the last six years have gone to fossil fuels – energy that is fuelling climate change through the emissions it creates. Meanwhile, five times less money went into renewable energy – an energy source which has the promise addressing climate change by greatly lowering emissions – quickly.
The EBRD is financing energy projects in 34 countries – from Eastern countries of the European Union to Central Asia, including former Yugoslavia and transition economies of the former Soviet Union.
Most of these countries import coal to fuel their energy system, and end up losing scarce financial resources that could otherwise be invested at home in renewable energy or energy savings, and could help them improve their energy security. Almost half of these countries also suffer from a high dependence on coal in their energy mix.
Burning coal for energy also has a huge impact on health. In three EBRD countries alone – Croatia, Serbia and Turkey – emissions from coal power plants lead to 5042 premature deaths, costing almost 12 billion € a year in health costs alone due to respiratory and cardiovascular conditions.
Even more worrying, data shows that three quarter of these countries are already facing high to extreme risk of climate change impacts such as extreme weather events, sea level rise or agricultural loss.
In the meantime, the EBRD is pouring millions of euros every year into fossil fuel projects, locking-in emissions from these projects for the coming decades. The EBRD, and the public money it is spending, should be part of the solution, not of the problem.
In the forward path on tackling climate change, the newly released IPCC report clearly shows that human caused emissions are the main driver of this change, and that the risks posed by climate change are massive. The world, and the EBRD today, must join the World Bank and the European Investment Bank to stop funding coal power and start funding a fair energy transition to renewable energy.
In September, the EBRD announced that it would not finance the 750 MW Kolubara B lignite power plant project near Belgrade in Serbia. The bank said the project would “have to be assessed against the new energy strategy” if it were to become active again.
This is a step in the right direction, but many more damaging projects are still on the bank’s to-do list. The EBRD has been asked to finance the construction of the 600 MW lignite power plant in Kosovo. If built, emissions from the plant in its entire lifetime would equal up to four times the annual emissions of the entire country.
It is time for the EBRD to say goodbye to old-fashioned king coal. The bank must rise to the challenge of international development finance and join the World Bank and the European Investment Bank in ending funding coal projects.
WWF and our partners are calling for an end to investments in fossil fuels – starting with coal, following up progressively with oil and gas – and increasing investment in renewable energy. Over 17,000 people have signed a petition urging the EBRD to end its financial support for coal. The approach has been defined. Now the action must start.
You can help by showing your support for action: Join 59,000 others and sign the Seize Your Power pledge, now!