The world’s largest development bank will stop funding unabated oil and gas projects by the end of 2021, representing a major shift of public finance towards clean energy projects.
The European Investment Bank (EIB) agreed to overhaul its fossil fuel lending policy on Thursday evening following months of negotiations and a decision being delayed twice. A compromise was reached by the bank’s board of directors, mostly comprising EU finance ministers, at the end of an 11-hour meeting.
The bank had already agreed to phase out lending to coal projects in 2013 but is the first multilateral bank to extend the ban to unabated natural gas projects.
Analysis by NGO Bankwatch found that between 2013 and 2017, the EIB handed out nearly $13bn to fossil fuel projects.
EIB president Werner Hoyer said the bank’s decision was “a quantum leap in its ambition”. “We will stop financing fossil fuels and we will launch the most ambitious climate investment strategy of any public financial institution anywhere,” he said.
In a statement last week, EU finance ministers called on all multilateral development banks, such as the World Bank and the Asian Development Bank, to phase out financing of fossil fuel projects.