European Investment Bank pledges to cut spending on roads

The European Investment Bank has said it will cut its funding of road infrastructure in line with its climate goals, even as it seeks to ramp up the amount of finance it provides to transport projects overall.

Kris Peeters, vice-president of the EIB, told the Financial Times from the sidelines of the meeting of officials from Group of 20 countries in Bali on Friday he was “convinced” the lender would invest less in roads and more in “other elements” of transport infrastructure. The comments come ahead of the publication next week of its transport lending policy for the next five years until 2027, in which time Peeters said he expected the bank to up its infrastructure spending.

The EIB is the world’s largest multilateral lender and provides long-term finance for projects that support EU policies. It has come under fire from climate campaigners and NGOs who say its financing of roads and non-fossil fuel projects operated by energy majors who still profit from burning oil and gas undermines its environmental aims.

Road transport investment made up 38 per cent of the €11bn the EIB put behind transport projects last year, despite the bank announcing in 2019 that it would stop investing in fossil fuel projects by the end of 2021 and support €1tn for climate projects before 2030.

The bank has recently approved €30mn for a leg of motorway in France and is considering putting forward €400mn for highways in Poland to connect parts of the so-called TEN-T network.

“We cannot afford to have institutions like the European Investment Bank pouring billions into highway projects, despite their effect on emissions and pollution. Public money must prioritise climate-mitigation action, encourage walking, cycling, boost cycling infrastructures, intermodality and public transport and cut funds to motorways projects,” said Kuba Gogolewski, who leads Greenpeace Europe’s Money for Change campaign.

Frank Vanaerschot, director of the transparency organisation Counter Balance, said: “If the EIB wants to reduce investment in road infrastructure, they should actually adopt targets in their policy and show they will reduce emissions.”

Peeters defended the bank’s record on road building, saying: “We are trying to stimulate electric cars and use of electric cars and not have new roads for fossil fuel vehicles, but it is a combination and we cannot say we shall not invest any more in the road when we have this very important network in Europe.”

The bank has been particularly supportive of the EU’s Trans-European Transport Network, a web of rail, road and waterways designed to unite the bloc, the core elements of which are due to be completed by 2030.

Peeters added that the bank was putting more emphasis on urban transport, such as metros and trams.

As part of its new transport lending policy, the EIB will set a more stringent test for road infrastructure projects costing over €25mn that combines an estimated cost of carbon emissions and likely traffic congestion. The bank said it would “screen out projects dependent on high short-term traffic growth”.

The EIB’s management committee and board of directors, made up of representatives from the EU’s 27 member states, would decide whether each project met the test requirements, Peeters said.

Vanaerschot argued that the tests were not transparent and “fail to guarantee that the EIB will meet the EU’s climate goals”.

The EIB is due to review its energy lending policy after the summer to incorporate elements of the EU’s Green Deal climate law, which aims to push the bloc towards net zero greenhouse gas emissions by 2050.