The decade ahead is a critical one for long-term global sustainability. It presents an indispensable opportunity for the world to stimulate a recovery from COVID-19 while addressing the climate crisis. For developing countries with limited fiscal space, which has been constrained further by the pandemic, addressing the climate catastrophe requires ample external financial support. Mandated by the European Commission, the European Investment Bank (EIB) provides finance to developing countries to help them address climate change, while fostering the EU’s external objectives. It has launched ambitious climate plans, establishing itself as the EU Climate Bank, to deliver on the climate objectives of the European Green Deal within and outside the European Union (EU).
Building on its 2015 Climate Strategy and its 2019 Energy Lending Policy, the EIB has now developed the Climate Bank Roadmap 2021-2025 as a blueprint of all its climate action operations within and outside the EU. This paper discusses the external dimensions of the four work streams of this Climate Bank Roadmap and explores the extent to which these work streams tackle the concerns that stakeholders raised during the consultation process that preceded the development of the roadmap.
Finally, the paper provides recommendations on how the EIB can ensure greater climate action impact. It suggests that the EIB should:
- Set new ambitious climate action targets for its operations in developing countries;
- Significantly increase its share of climate adaptation finance;
- Strengthen its partnerships with and in developing countries;
- Build up local country presence and expertise;
- Improve policy coordination of its climate action projects through blended finance;
- Support the development of bankable projects; and
- Enhance its inclusive financing by supporting micro- and small businesses through inter alia microcredit institutions.