European Investment Bank to end all loans to oil and gas firms

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The European Investment Bank (EIB), the lending arm of the EU, has vowed to close a loophole that allows it to lend money to oil and gas firms despite a ban on financing fossil fuel projects.

The EIB, the world’s largest multilateral bank, which is active in 160 countries, announced in 2019 it was phasing out lending to fossil fuel projects within two years, as it sought to become a “climate bank”.

Although the move was welcomed as a victory for the climate movement, campaign groups said the bank had failed to close several loopholes.

Now the lender has acted to close one inconsistency with the bloc’s climate goals.

From 2022 onwards, the EIB will stop lending to polluting companies that want to finance low-carbon projects. This would mean, for example, the EIB will no longer finance an oil company’s wind energy project. All recipients of EIB loans will be required to draw up decarbonisation plans.

“At the EIB group, we have heard the warnings,” said its president Werner Hoyer, as the decision was published days ahead of the start of Cop26.

“As one of the leading multilateral banks for climate action, we are further increasing our climate ambition,” the bank said in a statement.

“In general, EIB will no longer finance standard low-carbon projects of high-emitting corporations if the corporation continues to operate or invest in activities that are not aligned with the goals of the Paris agreement.”

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