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EBRD defends energy policy
EBRD's energy chief unveils key strands of its imminent new strategy and defends the bank against accusations of an obsession with fossil fuels
The EBRD’s keenly-awaited energy strategy will focus on a three-pronged agenda of climate change, energy security and affordability for consumers, a senior bank official told Emerging Markets.
Riccardo Puliti, managing director of energy and natural resources, said the first draft– which was finalized on Thursday – would include a focus on renewable energy resources, which he described as the “fuel of the future”.
He was responding to accusations by a leading campaign group that the EBRD allocated almost half of its loans towards fossil fuels. CEE Bankwatch aims to raise concerns with EBRD directors at this weekend’s meetings.
Puliti said: “There will be a very big degree of attention on climate change, energy efficiency and affordability. Energy poverty these days is a big issue even in rich countries: having a system where citizens cannot afford [to pay] is not the point.”
The bank will publish the draft strategy next month ahead of final approval at the end of the year. It replaces the current strategy in place since 2006.
CEE Bankwatch is lobbying EBRD country directors ahead of the board meeting this weekend to ask them to put pressure on the EBRD to rule out financing coal.
It is asking them to shift the focus away from investment in fossil fuels such as coal and towards renewable energy and energy efficiency.
Ionut Apostol, the organization’s EBRD coordinator and energy campaigner, told Emerging Markets: “We are hoping to get to the board and at the minimum get them to have an actual debate – not just about whether we should fund coal or not but about climate action in general,” he said.
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“However, this good news is spoiled by the bank’s continued financing of fossil fuels, which made up almost half of its overall energy lending in the [2006 to 2011] period.
“In particular, its increasing financing of coal and oil projects is problematic, as each of these received investments equal to the amount of new renewables financed in 2011.”
Bankwatch says that between 2006 and 2011, the EBRD lent E6.7 billion for energy projects, 48% of which went to fossil fuels; over that period, it increased coal lending from E60 million to E262 million.
The EBRD said the figures were correct but included loans for extracting natural resources such as oil and gas fields as well as energy generation.
Puliti said coal financing was a small share of the total E5 billion of energy funding and was dominated by two projects, in Serbia and Slovenia. “We only finance coal if it is an improvement on the existing situation and if there are no alternatives.”
He said the EBRD funded E250-E300 million of renewable energy projects in each year from 2008 to 2012, describing it as a “main axis” in the development of power investments.
“Renewables are a difficult sector to develop because many countries that were successful pioneers are now in deep trouble,” Puliti said. “But we do believe that renewables will be the fuel of the future.”
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