EIB climate action
in China
Climate change and engaging China – Crossroads of 21st century foreign policy
Brussels, February
2, 2011
1
Introduction to the European Investment Bank
13/04/2015
European Investment Bank
2
Introduction to the European Investment Bank
European Union’s long-term lending bank set up in 1958 by
the Treaty of Rome.
Shareholders: 27 EU Member States
Key lending figures:
Total lending:
EUR 79.1bn (‘09)
Outside the EU: EUR 8.8bn (‘09)
Balance Sheet:
EUR 367bn (’09)
Largest supra-national lender in the world
13/04/2015
European Investment Bank
3
EIB: the world’s largest Multilateral
Outstanding Loans (2009)
USD billion
450
400
350
300
250
200
150
100
Signed Loans (2009)
50
0
EIB
World
Bank
IADB
ADB
IFC
EBRD
USD billion
120
110
100
90
80
70
60
50
40
30
20
10
0
EIB
13/04/2015
European Investment Bank
World
Bank
IADB
ADB
IFC
EBRD
4
Breakdown of the EIB’s capital
13/04/2015
European Investment Bank
5
EIB: the world’s largest supra-national Issuer
Total issuance in 2009 : EUR 79.4 bn
Rated AAA/Aaa
Not-for-profit public financial institution
13/04/2015
European Investment Bank
6
Climate Change impacts and the EU response
13/04/2015
European Investment Bank
7
Climate Change impacts and the EU response
The Climate Change Policy of the European Union:
A very ambitious climate reduction targets (20-20-20 Agenda).
By 2020, the EU committed to:
1. Unilateral 20% GHG emission reductions with respect to 1990 levels.
1. 20% of the overall EU energy consumption will be from renewable
energy sources.
1. 20% of energy savings through increased energy efficiency in the EU.
13/04/2015
European Investment Bank
8
EIB Framework for Climate Action
13/04/2015
European Investment Bank
9
EIB’s basis for action
Promote low carbon, climate resilient growth through finance at scale of climate
friendly projects
Help public and private sector promoters to prepare and finance low carbon
projects (potentially with TA)
Promote market based financing instruments
Provide capital relief for key climate counterparts (utilities, intermediaries)
Provide risk sharing credit and equity funds to finance and develop low carbon
technology growth
Develop carbon markets
13/04/2015
European Investment Bank
10
EIB’s medium term activities
1. Continue to align the Bank corporate objectives, targets, principles and
standards with the evolving EU and international climate policy:
The Kyoto Protocol and the Copenhagen Joint Statement to the UNFCCC
Parties (ADB, AfDB, EBRD, EIB, IMF, and WB/IFC)
2. Gradually mainstream climate change considerations into Bank operations,
building staff awareness, capacity, and expertise
3. Align sector lending policies on reducing greenhouse gas emissions
4. Finance the development of cost-effective early-stage low-carbon
technologies
5. Help sovereign and private clients deal with climate risks and market failures by
developing a full array of new financing instruments to lever private, public
and own resources.
13/04/2015
European Investment Bank
11
EIB’s early results
Climate change lending is a key EIB objective, focusing on Energy
Efficiency, Renewable Energy and sustainable transport.
EUR 16.9bn for climate change in 2009, 20% of total lending.
EUR 4.7bn for RE, EUR 1.5bn for EE, EUR 4.7bn for CC-related R&D and
EUR 5.5bn for sustainable transport.
Climate Change a Key Performance Indicator in EIB, with annual volume
targets: 20% of total lending in 2010 and 22% in subsequent years.
13/04/2015
European Investment Bank
12
Climate Change action embedded in all EIB lending
Assessing carbon footprint of financed projects
Accounting for the cost of carbon emissions of projects when calculating their
ERR
Screening projects for climate risks and requesting promoters to effect design
changes where appropriate
Screening early stage projects to identify potential for generating carbon
credits
13/04/2015
European Investment Bank
13
Financing Instruments outside the EU
EIB’s traditional loan products
Outside Europe EIB lending is determined by multi-annual mandates
by the EU Member States
New financial instruments for sustainable energy:
ESF, Facility for Energy Sustainability and Security of Supply
(EUR 4.5bn in 2007-2013 on top of existing external mandate),
promotes cleaner energy growth paths by promoting the transfer of
clean technologies between the EU and developing countries
Six carbon funds (Multilateral Carbon Credit Fund (MCCF) with the EBRD
– Carbon Fund for Europe (CFE) with the World Bank (IBRD) – The EIB/KfW
Carbon Programme - Post-2012 Carbon Credit Fund, with Caisse des
Dépôts, ICO, KfW and NIB – Fonds Capital Carbone Maroc with CDG Maroc
and CDG France)
13/04/2015
European Investment Bank
14
Global reach of EIB climate action
13/04/2015
European Investment Bank
15
EIB Climate Change action in China
13/04/2015
16
The China Climate Framework Loan 1 (CCFL 1)
EUR 500M loan to the PR China signed in 2007.
An envelope to finance projects contributing to China’s Climate Change
mitigation efforts in:
Renewable energy projects;
Energy efficiency enhancement projects;
GHG reduction projects;
Afforestation/ reforestation projects.
Almost entirely allocated to projects
13/04/2015
17
China Climate Change Framework Loan 1
1. Four windfarms in the Provinces of Henan, Hainan and Guangdong
totalling 254 MW (€ 125m)
2. Afforestation in Jiangxi and Inner Mongolia (€ 50m)
3. Pollution reduction of cooking plant in Shaogan City (€ 35m)
4. Eleven small scale hydroelectric power plants in Hubei (€ 44m)
5. Photovoltaic urban lighting in Chaoyang city (€ 29m)
6. High efficiency District Heating in Jinan City (€ 31m)
7. Chemical plant emission reduction in Qiakou city (€ 30m)
8. Combined cycle power plant in the Wuhan Iron & Steel plant (€ 50m)
9. ER and EE improvements in two chemical plants of the Haohua group
(€ 70m) – to be approved
10. Coking gas to LNG for mass transit in Guiyang city (€ 26m) – to be
approved
13/04/2015
18
China Climate Change Framework Loan 1
9
1- Windfarm Projects
2- Afforestation
Projects
3- Coking Plant
Pollution Reduction
2
5
4- Hubei small
Hydropower
6
5- Photovoltaic Urban
Lighting
1
4
9
6- District Heat Energy
Efficiency
8
7- Chemical Plant
7
10
Emission Reduction
2
8- Wuhan Combined
3
1
1
13/04/2015
European Investment Bank
Cycle
9- Haohua Chemicals
10- COG to LNG
19
CCCFL 1 output indicators
Up to 3.4m t/y CO2 eq. saved when all projects will be in full
operation – equivalent to the entire EIB portfolio of projects in 2009
Around EUR 1.1bn of total investment
Up to 6,500 jobs created for the operating the projects
One project has already obtained its CDM registration, four others
are in preparation.
For forestry projects, FSC certification is being considered.
13/04/2015
20
What are the main benefits of the CCCFL 1?
Under the ESF the EIB offers:
Direct or indirect loans at attractive interest rates (AAA
terms, not-for-profit status)
Fixed & floating rate loans in USD, EUR, JPY, GBP
Long maturities up to 25 years
Loans are project-linked, oriented to the financing of the
fixed asset component of an investment.
Benefits of EIB “stamp of approval” that the projects
complies with best standards (BAT)
Catalytic effect on other sources of financing
13/04/2015
European Investment Bank
21
What are the main benefits of the CCCFL 1?
Open access to tenders to EU businesses
EIB Procurement Guidelines applied to all projects
ICB procedure for bids over EUR 5m
Publication on the OJEU
No national preference clauses
No tied financing
EIB to review and approve all tender documents
13/04/2015
European Investment Bank
22
General operational considerations
Projects financed by the Bank must be:
economically justified
technically viable
financially self-supporting and
environmentally sound
All projects financed by the Bank are appraised by a
multi-disciplinary team; confidentiality is always
respected
13/04/2015
23
The way forward
Continued support to Climate Change projects in China
China Climate Change Framework Loan 2
EUR 500m
Focused on RE, EE and ER
Signed in December 2010 – Projects to be identified
Forestation Framework Loan
EUR 250m
To be concluded in 2011
Smart Grid project
To finance Ultra High Voltage lines connecting RE plants to the
coast
Green railways project
To finance EE and mass transit investments in China
13/04/2015
European Investment Bank
24
www.eib.org
Jean-Jacques SOULACROUP
j.soulacroup@eib.org
Thank you
13/04/2015
European Investment Bank
25