DUSHANBE, December 12, 2013, Asia-Plus — The European Bank for Reconstruction and Development (EBRD) has adopted a new strategy that will guide its investments in the energy and natural resources sector for the next five years, according to the EBRD press release.
In this strategy the Bank – already the largest investor in renewable energy and energy efficiency projects in its region of operations – sets out a commitment to helping its countries of operations move toward a sustainable energy future.
The EBRD region, which stretches from Morocco to Mongolia, is faced with a challenge of providing sustainable, secure and affordable energy. The energy strategy identifies energy efficiency as the first and best response to this challenge.
The new strategy also sets out the EBRD”s revised policy in two key areas. In the document, the Bank builds on its well-established support for the Extractive Industries Transparency Initiative by requiring clients operating in the extractive industries sector to disclose subsoil contracts and licenses as well as all payments they make to local and national authorities.
In the case of coal-fired generation the strategy supports the move to lower-carbon fuel sources in response to the challenge of climate change. In alignment with other IFIs, the EBRD will not finance any coal-fired power generation projects except in rare and exceptional circumstances in which there is no feasible alternative energy source.
The strategy also reinforces the EBRD”s growing support for renewable energy, which will include financing both energy-generating capacity and key infrastructure such as transmission lines and backup generation.
The EBRD strategy is the first to be adopted for the energy sector since the Bank began working in the southern and eastern Mediterranean (SEMED) countries of Egypt, Jordan, Morocco and Tunisia. It focuses on the challenges and opportunities these countries face, in particular, how to meet rising demand, reduce energy subsidies, minimize water consumption and exploit the superb wind and solar resources in the region.
Since 2006 the EBRD has invested €8.8 billion in the energy and natural resources sector. Over that period the Bank has made direct investments worth more than €2 billion in the renewables sector, with an additional €760 million channeled via local banks. The EBRD has also invested over €675 million in energy security projects in Europe.
Coal-related projects – mostly dedicated to improving the efficiency of existing plants –accounted for 6 per cent of the Bank’s work in the sector.
The EBRD is also actively engaged in helping countries to switch from coal to gas. In the latest deal to address this issue the Bank arranged a loan in rubles equivalent of €280 million to Russia”s InterRAO to move away from using old coal-fired plants in the Urals by decommissioning them and switching to a much more efficient and environmentally friendly combined-cycle gas turbine.
Under the EBRD”s Sustainable Energy Initiative, which includes the energy and natural resources sector as well as other sectors such as infrastructure, the Bank has invested over €12 billion since 2006 in energy efficiency and renewable energy projects.
