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Wednesday, August 10, 2022

EIB ready to cut road support in favor of green transport options

The European Investment Bank (EIB), a key funder of Irish transport infrastructure, will cut its support for road construction in favor of the alternative as it focuses on meeting climate change goals.

The EIB has been a significant funder of Irish road infrastructure, accounting for the bulk of the €3.8bn transport lending here over several decades, including supporting the national motorway roll out. The bank has also helped fund rail, ports and airport infrastructure, including the runways of Luas and the new Dublin airport.

Transport accounts for just under €5 in every €5 invested in Ireland by the EIB, an EU institution that can use the influence of the joint support of member states to raise money cheaply on the markets and transfer it to schools. and may lend to public authorities, including universities. The private sector as long as the targets help to meet the policy goals of the European Union.

The change in focus was disclosed in an interview by Chris Peters, Vice President of the EIB. financial Times On the sidelines of the G20 summit in Bali. Mr Peters said he was “convinced” that the EIB would invest less in roads and more in other elements of transport infrastructure.

The EIB is due to publish a new five-year transport credit policy this month.

A change in the focus of the EIB will potentially create a funding gap if national governments and local authorities continue to pursue new road infrastructure plans. However, it may be easier to secure supports for rails, bicycles, and other options.

The EIB is likely to be an early mover in a broader trend for all lenders as environmental, social and governance parameters assume greater importance in lending decisions.

Banks and corporations already can secure cheaper financing on the bond markets if they commit to using the funds raised only on projects that meet ESG criteria, including mortgage loans for only high building energy rated homes. Many in the financial markets expect this to be timely supplemented by a regulatory push against lower ESG-friendly lending.

Earlier this month the ECB said in its first climate stress test of the euro area banking sector, a sign that many lenders underestimated the potential damage from climate change.
Lending less environmentally safe would be discouraged by regulators.

World Nation News Desk
World Nation News Deskhttps://worldnationnews.com/
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