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Europe, Forex

European Investment Bank proposes end to fossil fuel lending

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By Marc Jones

LONDON, July 26 (Reuters) – The European Investment Bank has proposed an end to lending for fossil fuel-reliant energy projects by the end of 2020, a draft of the EU lending arm’s new energy strategy showed.

The bank said it would phase out support to energy projects that were “reliant on fossil fuels: oil and gas production, infrastructure primarily dedicated to natural gas, power generation or heat-based on fossil fuels.”

“These types of projects will not be presented for approval to the EIB Board beyond the end of 2020,” a copy of the proposals seen by Reuters said.

The EIB board, which is made up mostly of EU finance ministers, is expected to discuss the proposals at a meeting in September, though a final decision could take longer.

Resistance could potentially come from coal-reliant eastern European Union members or Italy where the EIB is helping fund the Transadriatic Pipeline for gas.

“This long-term transition (to greener energy sources) is profound. Solidarity is required to ensure that potentially vulnerable groups or regions are supported,” the EIB proposal document said.

The bank said it would provide extra support to those member states or regions with “a more challenging transition path”.

Incoming President the European Commission, Ursula Gertrud von der Leyen, has called for the bank to spend half of its roughly 70-80 billion euros-a-year of investments on green projects, suggesting turning parts of it into a “climate bank”. (Reporting by Marc Jones; editing by Thyagaraju Adinarayan and David Evans)

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