EIB urges members to boost green finance to compete with US
THE European Investment Bank (EIB) urged EU member states to support an expansion of its green financing as the continent considers how to respond to US President Joe Biden’s green subsidy program.
EIB president Werner Hoyer called for an increase in financing for the RePowerEU initiative by 50 per cent to 45 billion euros (S$64.2 billion), which he said would mobilize 150 billion euros over five years on top of existing lending.
“This is of course subject to discussion with our governing bodies,” Hoyer told a conference in Luxembourg on Monday (Feb 27). “We can do even more, if the right measures are put in place.” The EIB, which guards its AAA rating closely, “will not put the financial health of this institution at risk”, he said.
Europe is boosting support for clean energy to compete with the US Inflation Reduction Act. Biden’s climate law includes about US$500 billion in spending and tax credits over the next decade, with a large chunk of that devoted to transitioning towards cleaner energy.
Hoyer said on Tuesday that he was “horrified” to see new figures showing inflation returning in France and Spain, which he said is a reminder of the need for targeted intervention and “not the big water hose splashing water everywhere”.
“We need to see where are the areas of innovative activity where we can support in a targeted way in order to strengthen Europe’s competitiveness and strive for climate change action,” he said in an interview on Bloomberg TV.
The EIB’s calls for more green energy money come after the development bank said it already financed a record 19.4 billion euros in the sector last year.
The new financing in the RepowerEU program, aimed at ending Europe’s dependence on Russian fossil fuels, would be on top of regular financing.
“While the recent US push to invest in and to develop new clean technologies is most welcome,” Hoyer said, “we must not be naive.”
“If there is one area where the EU has managed to preserve a competitive edge, it is at the intersection of green and digital technologies,” he said. “But it is a razor thin edge.” BLOOMBERG
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