Two new financial instruments that 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 have been launched this week.
The European Invertment Bank (EIB) and European Commission have joined forces to back investment through the two initiatives that support Europe’s contribution to achieving global energy, climate and environmental goals.
The Private Finance for Energy Efficiency and Natural Capital Financing Facility schemes was formally launched in Brussels yesterday by Jonathan Taylor, European Investment Bank Vice President responsible for climate action and energy, Miguel Arias Cañete, European Commissioner for Climate Action and Energy and Karmenu Vella, European Commissioner for Environment, Maritime Affairs and Fisheries, and representatives of a range of environmental groups.
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. The initiative is seeking 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.
The NCFF will start with a 3 to 4 years pilot phase and is expected to finance 9 to 12 operations. It will also be supported by a dedicated EUR 10 million technical assistance programme intended to technical understanding.
"With these new financial instruments, we are putting the money where it matters. The new instruments will unlock significant public and private investment in key strategic areas like energy efficiency and climate protection. This is a contribution to protecting the climate, saving energy for our citizens and making Europe less dependent on imported energy. This is what building an Energy Union is all about," said Miguel Arias Cañete, European Commissioner for Climate Action and Energy.
It is expected that at least EUR 500 million of dedicated financing to reduce energy bills will be unlocked by the Private Finance for Energy Efficiency (PF4EE) scheme intended to increase specialist investment. 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.
The European Investment Bank is one of the world’s largest lenders for investment in climate action projects. In 2014 the EIB provided more than EUR 19 billion for climate related investment that represented around 25 % of the EU Bank’s overall lending activity.
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