The European Investment Bank (EIB) recently published a new draft energy lending policy. If approved, this will align EIB’s lending with the EU’s long-term climate targets by investing in green energy, and ceasing support of new fossil fuel-based projects by the end of 2020.

In order to meet climate targets, the EIB has proposed increasing financial support for the energy transition, decarbonisation of the economy, as well as projects that promote energy saving, energy efficiency, renewable energy, and innovation in new energy technologies.

In conjunction with these measures, the EIB has proposed to stop funding new energy infrastructure projects that rely on oil, gas or coal.

Although an energy transition is critically important, such a transition will surely not be equally difficult and beneficial to all. As such, the draft policy also proposes establishing an “Energy Transition Package” to provide extra support to EU Member States and regions that are expected to face particular and disproportionate challenges as Europe transitions to cleaner energy sources.

In September, the EIB’s Board of Directors, made up of representatives of each of the 28 EU Member States, will begin discussing the draft energy lending policy, and will then have the opportunity to approve it.

This move contributes to a larger global movement to encourage governments, organisations, academic institutions, and others to cease investing in fossil fuels. This movement is known as “fossil fuel divestment.” Some governments have embraced the divestment movement, such as ICLEI Members Örebro (Sweden) and Münster (Germany) that have divested from oil, gas and coal funds.

To read the EIB’s new draft energy lending policy, click here.