Euro Parliament debate sets out the challenges for the European Investment Bank as it turns 50

Has the EIB changed over the last 50 years? What are the global challenges for the EIB and are its lending practices coherent with EU policy objectives? These were the questions tackled by the first panel of speakers at the European Parliament debate on July 1.

The EIB is a very important institution and its billions could have an enormous leverage factor in making drastic changes in investments in the EU's energy sector, one of the main priorities of the EIB. This was the message from Claude Turmes, MEP from the European Greens. Turmes emphasised the importance of the EIB’s role in tackling global environmental and biodiversity problems that are intertwined with climate change: “We have 10-15 years to make things right and we can't afford NOT to make choices, and we need policy which has a clear hierarchy – starting from resource efficiency, renewables, efficient use of gas and remaining coal.”

While the EIB has indeed drastically increased its lending for renewable energy sources, as pointed out by Guido Prud’Homme, lending almost EUR 2 billion to the burgeoning renewables sector in 2007, at the same fossil fuels still make up over half  (51 percent) of the EIB’s energy investments into specific sources of energy.

 The EIB's responsibility to reduce poverty

The different role that the EIB could play was further emphasised by Joseph Hanlon, a professor at the

MEPs Monica Frassoni and Claude Turmes at the debate

Open University in England with many years of research experience in Mozambique. The EIB lends in Africa under the Cotonou Agreement and thus has responsibility to reduce poverty. Instead, in Mozambique, the EIB has been funding “enclave projects” which generate little tax revenue and have almost no local economic linkages. Mr Hanlon insisted that with rapidly rising food prices the EIB could support commercial farmers, associations and co-operatives in Mozambique. The EIB’s role is in fact to promote private sector development, security of energy supply and environmental sustainability in Mozambique.

A similar message was heard from Anne-Sophie Simpere, a campaigner at Friends of the Earth France, one of the groups involved in Counter Balance. Simpere presented information on  the EIB's investments in the mining sector in the Democratic Republic of Congo, and in particular focused on the case of the Tenke Fungurume mining project, a project that has triggered conflicts and violations of human rights for local communities. She challenged the EIB, asking who is accountable and couldn't EIB loans be used differently?

More accountability and willingness to engage needed

Questions related to accountability and the EIB's governance structure were covered by the second panel of speakers. David Cook, from the UK's Department for International Development, called for the setting up of clear objectives and encouraged the EIB to be open to work together.

Caterina Amicucci of Counter Balance fields questions with MEPs and EIB staff during this recent debate in the European Parliament in Brussels.

Underscoring the debate was the broad consensus that the challenges facing the EIB  are still many. In the closing speech, Green MEP Alain Lipietz remarked  that the first time he contacted the EIB with a request for information over ten years ago, the EIB claimed to be accountable only to the market. A number of things have changed since 2001, when the European Parliament first started to prepare annual reports on the EIB's activities, often with critical recommendations asking for proper information disclosure on projects in the EIB's pipeline and for EIB policy documents and public consultation on them, for the implementation of the Aarhus Convention and the acceptance of the EU Ombudsman as the complaint mechanism for EIB operations outside the EU.

The EIB should change in tandem in tandem with changes in the EU policies in view of the global challenges of 21st century such as climate change, limited natural (energy) resources, poverty alleviation and biodiversity loss.

Though some of these policies now contain a number of loopholes, with time  and with the need for quick reactions from the EU as a key global player, EU policy should also become more coherent and clear. The EIB can not say it has not been warned.

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