When the EBRD was created in 1991 to help the shattered economies of the former Soviet bloc, it was well known that these economies were massively inefficient in their use of energy, with significant negative impacts both on their economic competitiveness and on the environment.
As we expanded to countries like Turkey and the southern and eastern Mediterranean region, we saw the same expansion of our work to promote resource efficiency and assist our clients to deal with the rising impacts of climate change. Today, we work under the umbrella of our very successful Green Economy Transition approach which accounted for 43 per cent of our 2017 financing with cumulative investments so far reaching over 26 billion euros. We are using an EBRD model of blended finance including funds from the Bank, international donors such as the European Union and the Green Climate Fund, and from the private sector, without which the fight against climate change would be lost.
Today, climate change is perhaps the number one global challenge. In December 2017, I led a senior EBRD team to the One Planet Summit in Paris. Global leaders used that conference to make clear that climate finance would determine whether we were up to this task. At this summit, the EBRD was called upon to scale up its climate action. While we are the top sustainable energy financier in our regions, we are expected to do more.
So, how hard is it to finance sustainable energy?
We used to say that it is difficult to change old attitudes. Old habits die hard. But these old answers are no longer valid. The renewables revolution and the availability of a broad range of energy efficiency technologies ready to be deployed make countries see their energy sectors from a new vantage point. Despite much noise about the US’ position on the Paris Agreement, it doesn’t determine whether or not a private investor will apply for an EBRD loan to build a solar plant in Kazakhstan. If it makes financial sense – and it does, thanks to policy dialogue and project finance structuring by our banking teams – it will happen. The EBRD is now supporting a massive increase in renewables capacity in Egypt and Jordan. With the help of our programmes, Ukraine is reducing its energy dependency and slashing CO2 emissions at the same time. Our Green Energy Financing Facilities now operate in 25 countries. Governments work with us as well: progressive regulation on renewables, energy and water efficiency is crucial for investments. For example, with the support of EBRD and the European Commission, Turkey has developed its first National Energy Efficiency Action Plan.
Things may not move as quickly as we would like, but our climate finance and policy engagement are needed and wanted in the region. We must do more, together, now.
The views expressed in this opinion editorial are the author’s own and do not necessarily reflect Emerging Europe’s editorial policy.