The European Commission (EC) and the European Investment Bank (EIB) have signed an agreement to provide up to €11.5bn in funding to aid public investment in transitioning to a climate-neutral economy.
A joint statement said that the pair had agreed to provide public sector entities across the continent with €1.5bn in grants from the EC, along with €10bn in EIB loans. The two said that the agreement forms the third pillar of its Just Transition Mechanism (JTM), part of the European Green Deal to achieve climate neutrality by 2050.
Elisa Ferreira, the European commissioner for cohesion and reforms, said: “The European Green Deal is our strategy to achieve a climate-neutral economy and Cohesion Policy will help delivering our green objectives in a fair way. Thanks to this agreement with the EIB, the Public Sector Loan Facility will offer public authorities in the regions and territories that most need support preferential lending conditions for projects that do not generate sufficient revenue to be financially viable.”
She added: “The European Commission and the EIB will keep working together to support a fair transition that will leave no one behind.”
The European Green Deal has been in the works for the last three years, and has been well covered on this site.
The EIB outlined some of the details on its website. It wrote: “The Public Sector Loan Facility offers public sector entities planning investment projects in affected regions a combination of EIB loans and EU grants, effectively reducing the financial burden for public coffers. To be eligible, projects must be located in or benefit territories that Member States have identified in their Commission-approved territorial just transition plans as facing the biggest challenges related to moving away from fossil fuels and carbon-intensive industries. In less developed regions (those with a GDP per capita of less than 75% of the EU average), the EU grant component can be up to 25% of the EIB loan amount for each project.”
Arguably, €11.5bn is a lot of money and it is nice that there are people with big wallets and a deep imagination working to tackle the issue of climate change.
But temperatures this summer reached 40C in London, while huge parts of Europe suffered drought. At the time of writing this for Expert Investor, 80% of Pakistan is under water. All of this is due to climate change.
With that in mind, could we not be a bit more ambitious about reaching net zero sooner than 2050?