European bank to prioritise loans to electrification projects over gas
LONDON (ICIS)–The European Investment Bank (EIB) will prioritise giving loans to projects that increase the electrification of energy supply by moving away from reliance on other fuels, a source close to the matter has told ICIS. Gas projects will be funded where alternatives are not possible.
The EIB loans funds to projects of common interest (PCIs), which are work which will improve energy interconnections between member states, and build security of supply and diversity in Europe.
Between 2015-2019 the EIB lent more than €5bn to 30 PCIs, including to the Trans-Adriatic Pipeline which will bring 10 billion cubic metres of Azeri gas per year to the EU.
The bank is currently considering its next round of lending to several PCIs, the source said.
The EIB plans to provide more loans to green infrastructure and electrification projects. In regions where green electricity is not possible, the bank will consider the next least polluting fuel, like gas.
Beyond 2021, the EIB will stop funding LNG-based energy projects, including for LNG terminals. The only projects that might still be financed will be ones that enable the switch from a heavy polluting transport fuel to LNG, or where electrification can not be done.
Four LNG terminal projects – Ireland’s Shannon, Croatia’s KrK, Poland’s Gdansk, and Greece’s floating storage regasification unit (FSRU) Alexandropoulos – could be affected by the EIB’s new energy lending policy , if they apply for EIB funds. These projects are also PCIs and so eligible for EU funding through the Connecting Europe Facility programme.
The four LNG project promoters did not respond to requests for comment by publication time.
The EIB will increase its funding for climate action projects to 50% of its loans by 2025, from 31% in 2019.
After reviewing its energy lending policy at the end of 2019, the EIB is now reviewing its transport policy to align it with the Paris Agreement.
A public consultation should be launched in the second half of 2020 or at the start of 2021, the source expects. The review of the bank’s industry research and development policy will follow.