The European Commission and the European
Investment Bank are launching two new financial instruments to drive investment
in energy efficiency, efforts to preserve natural capital, and adaptation to
climate change. The instruments will unlock public and private investments by
combining EIB funding with financing under the EU LIFE Programme for
Environment and Climate Action.
The first instrument – Private Finance for Energy
Efficiency (PF4EE) – aims to increase private financing for energy
efficiency projects designed to help Member States achieve the EU's agreed
targets on energy efficiency. The Commission has committed €80 million for
2014-17, anticipating an 8-fold leverage effect.
The PF4EE will combine lending from the EIB to intermediary
banks in Member States with protection against losses associated with making
loans for energy efficiency projects. It will be complemented by technical
assistance to financial intermediaries.
The instrument targets SMEs, private individuals, small
municipalities and other public sector bodies undertaking small energy
efficiency investments. It will be implemented through banks in Member States.
The size of the loans could range between €40 000 up to €5 million or more in
exceptional cases.
The second instrument – the Natural Capital
Financing Facility (NCFF) – will provide loans and investments in
funds to support projects that help preserve natural capital, including
adaptation to climate change. Eligible projects will include payments for
ecosystem services, green infrastructure, biodiversity offsetting and
investments for innovative pro-biodiversity and adaptation businesses.
A budget of €100-125 million is available for the
period up to 2017. The European Commission provides up to €50 million as a
guarantee for the investments with an additional grant support facility of €10
million for technical assistance.
Recipients for NCFF could include public and private
entities, including public authorities, land owners and businesses. Project
size will typically be between €5 and €15 million.
At any time, potential project developers can contact the
EIB to express an interest in the facility and discuss the suitability of their
ideas. Proposals will be considered for approval by the Bank, after
satisfactory due diligence and selection by the Bank, within the constraints of
the available budget.
EU Commissioner for Climate Action and Energy Miguel Arias
Cañete said: "With these new financial instruments, we are putting
the money where it matters. The new instruments will unlock significant public
and private investments in key strategy areas like energy efficiency and
climate protection. This is a contribution to protecting the climate, saving
energy for our citizens and making Europe less dependent on imported energy.
This is what building and Energy Union is all about."
EU Commissioner for Environment and Maritime Affairs Karmenu
Vella said: "The Natural Capital Financing Facility will help
potential investors to access finance to invest in projects that benefit nature
and help adapt to climate change. The new Facility projects will pilot
innovative ways of financing biodiversity and make it crystal clear that
protecting nature can also generate revenue and save costs."
PF4EE and NCFF complement the EU
Investment Plan, addressing the large potential at EU and national level to
further optimise the use of public and private funds.
The instruments will mobilise public money to generate new
private investment, without creating new debt. They will help remove market
barriers by investing in projects that would not be funded otherwise because
they are perceived as too high risk.
By doing so, they will demonstrate that investments in
low-carbon technology and resource efficiency sectors not only pay off in the
longer term, but also contribute to achieving EU's 2020 goals in resource
efficiency, biodiversity and climate action, putting Europe on the path of
sustainable growth.
