BAKU, Azerbaijan, November 18. As
part of COP29 in Baku, Trend News Agency proudly presents COP for
Hope, a special project offering an unparalleled platform to hear
from world leaders and trailblazers in politics, economics,
science, and ecology, all united by a shared commitment to
addressing today’s pressing climate challenges.
Today, we are honored to speak with Vice-President
of the European Investment Bank (EIB) Ambroise
Fayolle.
In an exclusive interview with Trend on the sidelines of COP29, Fayolle noted
that EIB is well represented at COP29.
“The European Investment Bank (EIB) is the European Union’s
financial arm. For a third year in a row, more than 50% of our
investments contribute to climate action and environmental
sustainability, which amounted to nearly €50 billion in 2023. As
always, the EIB is working closely with the COP Presidency, sharing
the EIB’s experience in key energy sectors, specifically how we are
working to scale up emerging technologies such as green hydrogen
and energy storage, both of which will be key to the green
transition in the future. The EIB is well represented at COP29, and
we are sharing our experience in mobilising private climate finance
and showcasing concrete and transformative solutions to help
countries and the private sector to accelerate climate action,
while ensuring a just transition leaving no people or places
behind,” he said.
Climate Finance Action Fund initiated by
Azerbaijan
Fayolle noted that the Climate Action Fund presents a novel
approach.
“The agreement at COP28 to transition away from fossil fuels was
a welcome step forward but long overdue. Action must now follow
words. In this regard, the Climate Action Fund presents a novel
approach where fossil-fuel producing countries and companies are
invited to finance climate action mitigation and adaptation
projects in developing economies. We welcome initiatives to explore
new approaches to help bridge the climate finance gap,” he
said.
Tasks of multilateral financial institutions to achieve
tangible results at COP29
“The EIB has observer status at the United Nations Climate
Change Conference, so we are not directly involved in the
negotiations. However, the important role of multilateral
development banks is understood by the negotiation community and
that’s why there is a call for these banks to do more. As
multilateral development banks, we are making progress. In
September, development banks announced two records. First, climate
financing of $125 billion for 2023. This is $25 billion more than
in 2022. Second, the global private finance that will be mobilised
by our investments nearly doubled to a record $101 billion.
Nevertheless, we recognise that more needs to be done to meet the
massive investment needs and achieve transformational change,
particularly in developing countries.
Here at COP29, multilateral development banks announced that as
we move forward into the second half of the critical decade, we
estimate that by 2030, our annual collective climate financing for
low- and middle-income countries will reach $120 billion, including
$42 billion for adaptation, and we aim to mobilize $65 billion from
the private sector. For high-income countries, this annual
collective climate financing is projected to reach $50 billion,
including $7 billion for adaptation, and we aim to mobilize $65
billion from the private sector,” he said.
In addition, Fayolle noted that multilateral development banks
are working jointly to strengthen country-level collaboration and
co-financing.
“At COP29, multilateral development banks have published our
common understanding and the way forward on country platforms for
climate action to deliver programmatic approaches and scale up
impact. And finally, in order to maximise climate impact on the
ground, and shift away from measuring climate finance volume only,
multilateral development banks have presented a common approach to
reporting climate impacts,” said EIB’s vice-president.
EIB support for Azerbaijan’s green
transition
Fayolle pointed out that in line with the European Union’s
Economic and Investment Plan for Azerbaijan, the EIB stands ready
to support Azerbaijan’s green transition.
“We are prioritising clean energy and sustainable transport
investments, as well as digitalisation and access to finance for
small and medium-sized enterprises. EIB Vice-President Teresa
Czerwińska overseas financing operations in Azerbaijan, and at
COP29 she met with Minister of Finance Samir Sharifov, Minister of
Energy Parviz Shahbazov and Minister of Digital Development and
Transportation Rashad Nabiyev to discuss cooperation
arrangements.
Here at COP29, EIB Global, the EIB Group’s specialised arm
dedicated to operations outside the European Union and a key
partner of the EU Global Gateway strategy, signed a memorandum of
understanding with the Republic of Azerbaijan to provide technical
assistance and set up a cooperation framework for the preparation
and appraisal of the upgrade, expansion and modernisation of Baku’s
metro network,” said EIB’s vice-president.
In addition, as he noted, the EIB completed a ten-month
assignment to help Azerbaijan improve railway safety and
reliability.
“The EIB’s advisory support, the first completed under the
Facility for Eastern Partnership Investment in Connectivity,
resulted in recommendations that will guide Azerbaijan Railways in
a project to improve operational safety while reducing travel
times, costs and greenhouse gas emissions. Beyond supporting
Azerbaijan’s green transition, earlier this year the EIB signed a
€10 million loan agreement with Bank Respublika to support micro,
small and medium-sized enterprises in Azerbaijan. The agreement
will promote financial inclusion by providing loans to small
businesses on preferential terms, with the option of disbursal in
local currency, boosting investment, growth and employment,”
Fayolle explained.
EIB focus on green energy agenda of Central
Asia
Fayolle noted that in Central Asia, EIB Global’s focus is in
supporting a sustainable growth model.
“This includes promoting green infrastructure projects, such as
energy efficiency, renewable energy, energy transmission, water
supply and sanitation, and sustainable transport, as well as
improving access to finance for small and medium-sized
enterprises.
In Uzbekistan, EIB Global is supporting the construction and
operation of three solar photovoltaic plants. The project will help
to reach Uzbekistan’s target of using 25% renewable sources for
electricity generation by 2030. At the same time, it will improve
the quality of life for people in Uzbekistan by reducing carbon
emissions and air pollution. Earlier this year, EIB Global agreed
memorandums of understanding for co-financing sustainable transport
projects of almost €1.5 billion with the Republic of Kazakhstan,
the Kyrgyz Republic, the Republic of Uzbekistan and the Development
Bank of Kazakhstan,” he added.
EIB’s plans to triple its funding for energy transition
adaptation
EIB’s vice-president noted that the Bank is working closely with
the European Commission, as well as countries, cities and the
private sector to finance adaptation measures.
“Last year, we devoted a record €2.7 billion to adaptation
projects globally. We aim to do even more this year and in the
years to come. A special focus of our activities are the most
vulnerable places. For people living on small islands and in
coastal regions, grappling with rising sea levels, extreme weather,
and ocean warming, climate change is already an existential threat.
The EIB is working with the Caribbean Development Bank to support
climate-resilient water infrastructure across 14 countries. In
Europe, the EIB is supporting countries affected by recent extreme
weather events – in Central and Eastern Europe and Spain. These
devastating floods show the urgency of investing in adaptation and
resilience and that the effects of climate change are being felt in
every corner of the world,” he explained.
EIB’s transformation into climate bank
Fayolle recalled that the EIB has been transforming itself into
the climate bank over more than a decade of progress and
substantial investment, tied to several milestones: the world’s
first green bonds in 2007, the Bank’s first Climate Strategy in
2015 in the wake of COP21 in Paris, its energy lending policy in
2019 that excludes financing of unabated fossil-fuel energy
projects, and in 2020 the Climate Bank Roadmap, which led to the
EIB became the first multilateral development bank to apply Paris
alignment criteria to all its new financing operations since
January 2021.
“Consolidating our role as the climate bank is priority number
one of the EIB Group’s 2024-2027 Strategic Roadmap. Concretely,
this means investment in physical infrastructure, such as
interconnectors, grids, energy storage and renewables, will be
reinforced, as will support for biodiversity, a circular economy,
and nature-based solutions. Likewise, the EIB will step up its
investments in research and development and its support for the
whole value chain of key and emerging technologies for a net-zero
economy under the EIB’s climate and energy lending strategy.
The mid-term review of our Climate Bank Roadmap has confirmed
that the EIB Group is on track or has achieved its headline
targets, including to achieve the goal of supporting €1 trillion of
green financing this decade. But we won’t stop there. We are now
working on our new strategic approach, which will guide our
activities from 2025-2030. We will present it at the United Nations
climate summit COP30 next year,” he said.
Innovative financing models to make climate projects
more accessible
“We must advance in innovative solutions to share risks that the
private sector is not able to shoulder. This is our key role: to
de-risk investments that make our lives and economies more
sustainable. For example, the EIB is working closely with the
European Commission and the private sector to de-risk investments
and unlock finance for major breakthrough technologies that will
make the green transition a success and strengthen economic
competitiveness. We invest in green steel, circular battery
gigafactories, green hydrogen, wind and solar panel technologies,
and cutting-edge research and development.
To help countries free up fiscal space for climate action, we
have announced that we will offer climate-resilient debt clauses
enabling developing countries to suspend their loan repayments if
they are struck by a natural disaster. To free up fiscal space for
climate action, in Barbados, the Inter-American Development Bank
and the EIB have approved guarantees totalling $300 million to
support an innovative debt-for-climate operation that will help
Barbados unlock much-needed resources to invest in critical climate
adaptation projects, while safeguarding other priorities such as
social spending on health and education,” said EIB’s
vice-president.
In addition, Fayolle noted that international capital markets
play a key role in mobilising green finance at scale.
“In October 2024, the EIB celebrated the unlocking of €100
billion of investor support for climate action and sustainability
through its green and sustainability bonds since 2007. The EIB will
continue to support the green transition by leading the emergence
of a standardised green bond market. We are working with the
European Commission on the Global Green Bond Initiative, a
coalition of development finance institutions and multilateral
organisations coordinated by the EIB. A dedicated de-risked fund
will act as anchor investor in green bonds issued by developing
economies. The preparation of this issuance will be supported by
technical assistance benefiting from the EIB’s experience in the
field. This will help countries crowd in international investment
for their green projects. The fund’s anticipated impact could spur
sustainable investments up to €15-20 billion globally,” he
concluded.
Follow the author on X: @Lyaman_Zeyn
