Energy Headlines

The Energy Union will be partly built through lines of private finance guaranteed by public money, Climate Action and Energy Commissioner Miguel Cañete said yesterday (16 February).

Such “blended” mechanisms are central to the EU’s flagship Investment Plan. It aims to raise €315 billion by staking €21 billion of public money from the European Commission and European Investment Bank (EIB) in risk guarantees.

Cañete confirmed a similar approach would be used to encourage private investment across the five pillars of the planned Energy Union - energy security, renewables, energy efficiency, internal energy market, and research and innovation.

He was speaking yesterday (16 February) at the launch of two financial instruments based on the same idea of leveraging private backing. The support brings in about €200 million in long-term low-cost loans, technical support, and credit risk protection for banks.Those banks will act as intermediaries, providing credit to entrepreneurs, companies, and local municipalities to invest in energy efficiency and conserving biodiversity.

The instruments would act as a “pilot” for both the Investment Plan and Energy Union, and their success would bolster confidence in the tactic, Cañete said.

“This is a contribution to protecting the climate, saving energy for our citizens and making Europe less dependent on imported energy. This is what building an Energy Union is all about," he told reporters.

Both the new instruments and the Investment Plan give the EIB a pivotal role in offsetting risk. Observers have noted this will require a cultural shift in an institution which has been criticised for being too risk-averse in the past.