More than €250 million in grants for climate activity in 2016
The two biggest contributors were the Climate Investment Funds (CIF) and the European Union (EU), followed by bilateral donors such as Austria, Finland, France, Germany, Japan, the Netherlands, Norway, Spain, Sweden, Switzerland, the United Kingdom, the United States, and Taipei China.
In total, since 2006, donors have provided over €1.4 billion for climate finance, in support of the EBRD’s sustainable development model which now recognises green as a key quality of successful market economies.
Donor partnerships are crucial for driving growth for the green economy. The EBRD combines green investments with donor-funded technical assistance, for instance, for energy audits and investment preparation, and concessional finance.
Additionally, donors support the Bank’s work with governments on improving the policy environment.
Many EBRD countries, especially those from the former Soviet bloc, have suffered years of wasteful energy use and environmental neglect. Some also face vulnerability to climate change.
In the southern and eastern Mediterranean (SEMED), water stress and misuse of natural resources are also a problem.
Despite noticeable improvements, some countries are still lagging behind. The EBRD regions’ average carbon intensity is almost 5 times higher than the EU average, and the level of energy intensity 4 times higher.
The 2015 Paris Agreement commits the international community to intensifying the fight against global warming and scaling up green investments. The EBRD is playing its part too and in 2016 the share of its environmental financing rose to 33 per cent of total annual investment, on track to meet the 40 per cent goal the Bank set for 2020.
Technology has a significant impact on greenhouse gas emissions, especially in the EBRD’s early transition countries and SEMED, and their reduction requires adaptation of current technologies to make them cleaner and climate-resilient.
In response, the EBRD’s Finance and Technology Transfer Centre for Climate Change (FINTECC) helps companies implement cutting edge technologies that reduce harmful pollutants, optimise water, energy and material consumption or assist clients in becoming more resilient to the effects of climate change, with support from the Global Environment Facility and the EU.
For example, in 2016 the Ukrainian pharmaceutical producer, Pharma Start, thanks to a FINTECC loan and technical cooperation, invested in the implementation of an energy management system, a heat recovery system, heat pumps and the thermal renovation of its facilities.
“The financing will allow us to expand our production capacities, acquire new machines, and improve the efficiency of production and energy efficiency standards. Our investment programme will also create new jobs,” said Ievgen Zaika, Pharma Start Director General.
Many Central Asian countries where the EBRD operates are particularly vulnerable to the effects of climate change. Average temperatures are rising, precipitation patterns are shifting, glaciers are retreating and the economic impact of the changes is growing, most notably in the agricultural sector.
To tackle this problem in Tajikistan, the EBRD has teamed up with the CIF and launched Tajikistan Climate Resilience Financing Facility (CLIMADAPT). This US$ 10 million facility supports climate resilience investments in the residential, small business and agribusiness sectors, as well as resilience assessments funded by the UK’s Department for International Development and the EBRD’s Early Transition Countries Fund*.
The EBRD’s work on promoting greener economies also includes projects aiming at supporting the development of strong regulatory frameworks. For example, a 2016 study in Kazakhstan, funded by the Czech Republic, looks at ways of addressing environmental challenges and assesses demand for green investment, including financial products such as loans and bonds.
Donor support will remain vital to continue advancing green transition in the EBRD regions and meeting GET’s ambitious targets.
*Donors to the Eastern Europe Energy Efficiency and Environment Partnership (E5P) include: the European Union (the largest contributor), Armenia, Czech Republic, Denmark, Estonia, Finland, Georgia, Germany, Iceland, Ireland, Latvia, Lithuania, Moldova, Norway, Poland, Romania, Slovak Republic, Sweden, Ukraine and the United States
**Donors to the Early Transition Countries Fund include: Canada, Finland, Germany, Ireland Japan, Korea, Luxembourg, the Netherlands, Norway, Spain, Swedenn, Switzerland, Taipei China and the United Kingdom