European Investment Bank – a major player for wilderness?
Our response to the consultation on EIB’s road to becoming a “Climate Bank” stresses its great potential opportunity to underpin major natural ecosystem conservation.
True protection principles must be safeguarded, given greater need to rely on private sector participation as COVID undermines official funding sources. There will also be a need for a more ‘balanced portfolio approach’ to include softer loans and grants. And projects funded must genuinely support the Paris Agreement in addressing climate change, with no more scope for image-tarnishing subsidised wood burning bioenergy.
However, if these issues are addressed, EIB could have a highly important potential role to play in achieving ambitious targets old growth forest protection, and restoration of large no-extraction natural ecosystem areas (AKA wilderness).
EIB as a World Bank for climate-changing ecosystems
Wild Europe’s submission to the EIB calls for an internal restructure of the Bank to provide a more balanced range of funding instruments, capable of supporting such conservation initiatives where cash flow generation is relatively low – including a range of soft loans and grants.
Initial projects in this respect are promising, but this flexibility will be needed for wider replication. EIB support should also include capacity building, so NGOs and agencies can structure projects with sufficient income potential from non-extractive ecosystem service initiatives – carbon, flood mitigation, nature tourism – to fully service long term loans.
A rough appropriate analogy is with the World Bank, which restructured itself into two main components: the IBRD (International Bank for Reconstruction and Development), a quasi-commercial development finance facility, and the IDA (International Development Assistance), operating a range of softer loans and grants for addressing key long-term issues where loan servicing income potential is minimal, inappropriate or not available.
Just as IBRD subsidized the IDA element within the World Bank, so EIB could reorder its internal structure.
To this end, EIB should also operate openly in a broader strategic framework. It could be an influential advocate for reallocation of economic resources, away from subsidised agriculture in marginal areas with net GHG emissions and low or zero net productivity, towards conversion into natural ecosystems with higher yielding income and employment benefits for local communities – and social betterment for wider society.
Read our response here