The European Bank for Reconstruction and Development (EBRD) will no longer finance thermal coal mining or coal-fired electricity generation and will focus instead on renewable energy as part of its new five-year decarbonisation energy strategy.
The bank will also no longer fund any upstream oil exploration or upstream oil development projects, however, it added the caveat that it would fund such ventures in rare and exceptional circumstances, “where such investments reduce greenhouse gas emissions”, according to a release. It will also continue to support the gas sector where it is consistent with a low-carbon transition that is both secure and affordable.
The bank has emphasised the scaling-up of investment in renewables, supporting the integration of energy systems, promoting the switch to cleaner and more resilient energy sources and facilitating electrification as a means to clean the economies where the Bank invests. EBRD said it currently invests in some of the least energy-efficient and most polluting economies and cities in the world so it wants to be part of a cleanup process.
Nandita Parshad, EBRD managing director, Energy and Natural Resources, said: “Urgent and decisive steps are needed to address the challenges posed by climate change and poor air quality. This requires a fundamental shift away from hydrocarbons to cleaner energy sources. That means the electrification of economies, including industry, transport and heating, with that electricity generated overwhelmingly from renewable sources. This is the goal that we have placed at the centre of our new energy sector strategy: to decarbonise the power sector with a decisive shift away from the most polluting fuels. Achieving this goal requires smart, integrated and resilient networks and reliance on competitive, regionally integrated and resilient markets to deliver this change. Our dual role as investors and facilitators of policy reform, coupled with our commitment to promoting environmentally sound and sustainable development, means we are ideally placed to deliver this transition.”