As part of the Fair Transformation Fund, the European Investment Bank will finance projects whose largest beneficiary should be coal regions in our country. As much as 1/5 of the budget to amount to EUR 40 billion is to go to Poland.

Last week, the European Commission unveiled a draft crisis plan called Next Generation EU to help the EU recover from the crisis following the coronavirus pandemic. Its budget is to be EUR 750 billion, of which EUR 500 billion will be made available in the form of grants and EUR 250 million in the form of loans. The Just Transformation Fund is to be part of the Next Generation EU project, which will finance projects that support economic change in regions that until now have been dependent on fossil fuel activities. Earlier, Brussels proposed that the Fund’s budget should amount to EUR 7.3 billion, but last week it proposed raising it to EUR 40 billion.

The EC’s initial proposal, which will still be subject to negotiations between individual EU states, assumes that the largest beneficiary of the Just Transformation Fund will be Poland, which will receive EUR 8 billion for the transformation of its coal regions. After the announcement of the Next Generation EU plan by Brussels, the European Investment Bank announced the introduction of a new financial mechanism dedicated to investments implemented under the Fair Transformation Fund.

Under the new instrument, the EIB is to make available a total of EUR 1.5 billion in the form of grants and up to EUR 10 billion in the form of loans. The bank assumes that this will contribute to the mobilization of private sector investments worth a total of 25-30 billion euros, which are part of the European Union’s neutranean climate goal by 2050 and which will support regions whose economies may suffer from extinguishing activities related to, for example, closing mines.

The condition for granting funding from this mechanism is to be the implementation of specific investments in areas covered by national plans for fair transformation, but also not to generate sufficient profits by the planned investments to obtain fully commercial financing for them. The proposal for a new EIB financial mechanism is now to be negotiated in the European Parliament and the Council. The first projects are to receive funding after it has been approved by the EU institutions and after individual countries have adopted their national equitable transformation plans.

The European Investment Bank has identified five key areas in which it wants to commit its funds:

  • Improving energy efficiency is to enable the achievement of the goals set in the new EU directive on energy efficiency.
  • Investments in renewable energy sources and support for achieving the goal of at least 32% share of renewable energy sources in the EU energy mix in 2030.
  • Construction of distributed energy supported by energy storage technologies and electromobility.
  • Modernization of power networks, crucial in the context of the growing importance of wind and solar energy, as well as increasing the possibility of cross-border energy exchange.
  • EIB involvement in projects supporting energy transformation outside the European Union.

Over the past five years, the EU bank has allocated funding worth over EUR 65 billion to investments in energy efficiency, renewable energy sources and network development. In total, in the years 2021-2030, the EU bank is to spend EUR 1 trillion on projects related to climate protection

EC – Next Generation