EBRD achieves record green finance in 2021

Sustainable energy

United KingdomAn all-time high of €5.4 billion (or 51% of total business volume) was reached in 2021 by EBRD green financing.

The EBRD’s Green Economy Transition (GET) approach is responsible for the EBRD’s 2021 green results, a significant increase from the 29 percent share of total financing in 2020.

Since its recent twin commitment to align its investments with the goals of the Paris Agreement on limiting climate change by this year and to make more than 80% of its investments green by 2025, the Bank has followed through on both promises. To help its regions transition to low-carbon economies, the European Bank for Reconstruction and Development (EBRD) announced plans to double the mobilization of private-sector climate financing by 2025.

Supporting low-carbon transformation

Working in some of the world’s most reliant on fossil fuels, EBRD, a leading climate finance investor, helps countries plan and implement their low-carbon economic transformation. A €5 billion environmental program, EBRD Green Cities, has helped 53 cities identify, prioritize, and link their environmental challenges to sustainable infrastructure investments and policy measures over the past five years. An additional €2 billion will be invested in green urban infrastructure over the next two years, the EBRD announced in November.

Green finance record

One of the most important factors in the EBRD’s second-highest annual business volume was the 2021 green finance record. When the Covid-19 pandemic broke out in 2020, emergency lending boosted its investments to a record high of €11 billion. In 2021, the company had 413 projects, compared to 411 in 2020. Private sector investment increased by four percentage points to reach 76% of total investment in the economy. From €1.2 billion in 2020 to €1.8 billion in 2021, the amount of money that can be accessed by clients outside of the EBRD’s direct involvement has risen significantly. An annual expenditure of €7.3 billion was made.

Multi-donor facility

The European Union, the EBRD’s largest multilateral donor, helped the bank raise €1.2 billion in donor funds for its operations in 2021. The EBRD is an important partner for the European Union. An additional €500 million in concessional EU funding was provided by Greece through the EU’s pandemic-related Recovery Resilience Facility as part of the EU’s 2021 budget and NextGenerationEU funding programs.

High-Impact Partnership on Climate Action (HIPCA), EBRD’s first multi-donor facility, received €123 million from bilateral donors. The EBRD’s other two strategic priorities, inclusion and digital, played a significant role in its success in 2021. Nearly three-quarters of the projects signed in the year had a strong gender component, nearly double the target of 18% of projects.

Overcoming pandemic challenges

A quarter of EBRD’s annual investments will be dedicated to gender equality projects by the end of 2025, following the release of two interlinked EBRD strategies for the promotion of gender equality and equality of opportunity in November. Also in November, the International Monetary Fund (IMF) released its first Digital Approach, which focused on the urgent need for economies to embrace rapid technological change in order to overcome the challenges posed by the Covid-19 pandemic.

According to the EBRD’s performance indicators, its investments and impacts improved in quality and impact in 2021, according to the ABI results. Excellent operational results in 2021 were followed by excellent profitability for the EBRD. In the coming weeks, we’ll have more information to share about the latter.