Econostrum | Economic News in the Mediterranean

Green finance accounted for 51% of total EBRD investments in 2021

Written by Eric Apim on Thursday, January 13th 2022 à 15:05 | Read 545 times

The EBRD favours green investments (photo: EBRD)
The EBRD favours green investments (photo: EBRD)
EU. The European Bank for Reconstruction and Development (EBRD) has invested €10.4bn in 2021, the second highest amount (after €11bn in 2020) since its creation in May 1990. "These excellent results underline the Bank's strong commitment to continue supporting its clients in the aftermath of the pandemic, as well as its commitment to decarbonising economies and enabling the transition to a more sustainable future, with a focus on private sector involvement and support for reforms to tackle climate change," said Odile Renaud-Basso of France, EBRD President since November 2020

In 2021, the institution handled 413 projects (411 in 2020) and its share of the private sector rose by four points to 76%. Its intervention has mobilised around €1.2bn of donor funds to support its operations. This amount came mainly from the European Union, the Bank's largest multilateral donor.

51% of the EBRD's total commitments in 2021, i.e. €5.4bn, concerned the green economy, a record ratio. In 2020, these investments only reached a share of 29% compared to 46% in 2019 and 25% in 2015. The previous year, the bank had to focus on the response to the Covid-19 crisis by reserving a large part of its investments to directly help its customers and economies fight the impact of the global economic crisis. This included providing short-term liquidity and working capital through emergency loans, which by their nature did not support new investment spending in the green economy.

The EBRD had therefore taken a break from its new approach to the EBRD Green Economy Transition (GET), launched in 2016 and updated in July 2020 (GET 2.1), aimed at promoting the use of sustainable energy and resources.

Green Cities programme gets additional €2bn

In July 2021, the bank decided to "make the majority of its investments green by 2025". By the end of 2021, this figure had already been reached. In November of that year, at the Climate Summit (Cop26) in Glasgow, the EBRD stated that it wanted to "double the mobilisation of private sector climate finance by 2025" and "achieve net annual greenhouse gas (GHG) emission reductions of at least 25 million tonnes over the five-year period". It intends to achieve this by focusing on "greening the financial sector, energy systems, industrial decarbonisation, environmental cities and infrastructure, sustainable food systems, green buildings and sustainable connectivity".

For example, its Green Cities programme has expanded to fifty-three cities in its five-year history. With €5 billion, it helps cities identify, prioritise and respond to their environmental challenges through infrastructure investments and sustainable policy measures. In November 2021, the EBRD announced that the programme would double in size with an additional €2bn over the next two years dedicated to green urban infrastructure.

"Bilateral donors have contributed some €123m to the High Impact Partnership for Climate Action (HIPCA), the EBRD's first green-focused multi-donor facility, launched at Cop26," a statement said.

Inclusion and digital were, along with green finance, the two strategic priorities of the bank in 2021. 35% of the projects carried out had a gender equality component (double the minimum forecast of 18%). This percentage is expected to increase to at least 40% by 2025 when a quarter of the EBRD's annual investments will be in inclusion issues.


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