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1 EIB climate action in China Brussels, February 2, 2011 Climate change and engaging China – Crossroads of 21 st century foreign policy.

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Presentation on theme: "1 EIB climate action in China Brussels, February 2, 2011 Climate change and engaging China – Crossroads of 21 st century foreign policy."— Presentation transcript:

1 1 EIB climate action in China Brussels, February 2, 2011 Climate change and engaging China – Crossroads of 21 st century foreign policy

2 2 Introduction to the European Investment Bank 16/02/20142 European Investment Bank

3 3 Introduction to the European Investment Bank European Unions 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 16/02/20143 European Investment Bank

4 4 EIB: the worlds largest Multilateral Outstanding Loans (2009) Signed Loans (2009) USD billion 16/02/2014 European Investment Bank

5 5 Breakdown of the EIBs capital European Investment Bank 16/02/2014

6 6 EIB: the worlds largest supra-national Issuer Total issuance in 2009 : EUR 79.4 bn Rated AAA/Aaa Not-for-profit public financial institution 16/02/2014 European Investment Bank

7 716/02/20147 European Investment Bank Climate Change impacts and the EU response

8 8 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. 16/02/20148 European Investment Bank Climate Change impacts and the EU response

9 9 EIB Framework for Climate Action 16/02/2014 European Investment Bank

10 10 EIBs 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 16/02/2014 European Investment Bank

11 1116/02/201411 European Investment Bank EIBs 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.

12 12 EIBs 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. 16/02/2014 European Investment Bank

13 1316/02/201413 European Investment Bank 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

14 14 Financing Instruments outside the EU EIBs 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) 16/02/2014 European Investment Bank

15 15 Global reach of EIB climate action 16/02/2014 European Investment Bank

16 16 EIB Climate Change action in China 16/02/2014

17 17 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 Chinas Climate Change mitigation efforts in: Renewable energy projects; Energy efficiency enhancement projects; GHG reduction projects; Afforestation/ reforestation projects. Almost entirely allocated to projects 16/02/2014

18 18 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 16/02/2014

19 19 China Climate Change Framework Loan 1 16/02/201419 European Investment Bank 1 - Windfarm Projects 2 - Afforestation Projects 3 - Coking Plant Pollution Reduction 4 - Hubei small Hydropower 5 - Photovoltaic Urban Lighting 6 - District Heat Energy Efficiency 7 - Chemical Plant Emission Reduction 8 - Wuhan Combined Cycle 9 - Haohua Chemicals 10- COG to LNG 1 1 1 2 2 3 4 5 6 7 9 9 8 10

20 20 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. 16/02/2014

21 21 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 16/02/201421 European Investment Bank

22 22 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 16/02/201422 European Investment Bank

23 23 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 16/02/2014

24 24 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 16/02/201424 European Investment Bank

25 25 Jean-Jacques SOULACROUP Thank you 16/02/201425 European Investment Bank

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