2021 was a very green year for Europe’s multilateral development bank, which invested a record amount in green finance projects.
Last year, the European Bank for Reconstruction and Development (EBRD) issued €10.4 billion in total annual bank investment (ABI) – its second highest figure ever.
And of that €10.4 billion, a record 51% (or €5.4 billion) went to green finance projects.
This represents a significant increase on EBRD’s green finance performance in 2020, when 29% of its total ABI went towards Green Economy Transition (GET) projects.
EBRD set the record for its largest total ABI in 2020, when it issued €11 billion in funding, largely due to emergency lending at the start of the COVID-19 pandemic.
Its total number of its projects funded in 2021 was 413, compared to 411 in 2020, and the share of private sector investment rose four percentage points to 76%.
Annual mobilised investment (AMI) – the amount made available to clients from entities other than the EBRD due to the bank’s direct involvement – climbed to €1.8 billion from €1.2 billion in 2020.
The EBRD raised approximately €1.2 billion in donor funds to support its operations in 2021, cementing its role as an important implementing partner for the European Union (EU), its largest multilateral donor.
EBRD climate engagement
The news of EBRD’s record investment in green finance projects comes after a series of climate-related commitments from EBRD over the past year.
In July 2021, following an annual meeting of the board of governors, EBRD committed to aligning all its investments with the goals of the Paris Agreement on limiting climate change by the end of 2022.
In addition, the board committed to making a majority of its investments green by 2025 – a goal which the bank seems to have hit four years early in 2021.
In November 2021, at the COP26 in climate summit Glasgow, EBRD also set out how it plans to support the transition to a low-carbon economy in its regions by doubling the mobilisation of private-sector climate financing by 2025.
Unlocking funding for green finance
As one of the world’s largest climate investors, the EBRD said it works in some of the world’s most fossil-fuel dependent countries, and aims to support them in planning and executing their transition to a low-carbon economy.
Among its green finance initiatives is the EBRD Green Cities fund worth €5 billion.
As an urban environmental fund, EBRD Green Cities has grown to include 53 cities in its five years of operation, and helps them to identify, prioritise, and connect their environmental challenges with sustainable infrastructure investments and policy measures.
In November last year, the EBRD announced that Green Cities was to double in size, and it allocated a further €2 billion to it to invest in green urban infrastructure over the next two years.