Two new financial instruments aim to encourage greater private sector involvement in schemes that contribute to the twin climate priorities of reducing energy use and conserving natural capital, especially biodiversity, in Europe. The EIB and European Commission have joined forces to back investment through these two initiatives that support Europe’s contribution to achieving global energy, climate and environmental goals.
The initiative will encourage local banks in a number of European countries to increase lending for energy efficiency projects by both providing long-term low-cost loans and credit risk protection to financial intermediaries, as well as improving lending expertise in the sector. The new initiative will be managed by the European Investment Bank and the European Commission will provide EUR 80 million for credit risk protection of energy efficiency loan portfolios and support of technical experts funded from the Life programme.
The scheme is designed to help local financial institutions to support the roll-out of national energy efficiency plans. Priority will be given to proposals where energy efficiency investment needs are the greatest and where there is a lack of available finance for energy efficiency.
Green infrastructure and nature-based projects that preserve ecosystem services or contribute to climate adaptation are amongst schemes that will benefit from the new Natural Capital Financing Facility. This initiative seeks to improve financing investments that includes flood protection, rainwater recycling, programs to protect forests and reduce water and soil pollution, biodiversity offsets, and eco-tourism. The scheme will demonstrate the potential for long-term private and sector investment in projects currently seen as too challenging to be viable and will be backed by EUR 125 million being made available by the European Investment Bank and the European Commission.