On Monday 13 May, the European Investment Bank Group met at the Economic and Social Council in Paris in the presence of political figures such as Pierre Moscovici, European Commissioner for Economic and Financial Affairs and Nicolas Dufourcq, Director General of BPI France, to launch its partners’ club.
The conference, entitled “Investing in Tomorrow’s Europe”, was an opportunity to take stock of investment in Europe, but also to assess the state of play on two projects: energy transition and innovative financing. Investment is fundamental to R&D and is at the heart of science policy, particularly in Europe.
A problem was also raised ahead of the meeting: “The European Union does not generate enough new companies who are global R&D leaders, especiallly in the most dynamic sectors because it is lagging behind in the adoption of digital technologies, especially in the service sector.”
Having summed up the current situation, the experts and members of the EIB gave statements and exchanged views on the strategies and methods to be put in place. To this end, a Club bringing together more than 32 public and private companies was launched in the presence of Sylvie Goulard, Deputy Governor of the Banque de France and Ambroise Fayolle, Vice-President of the EIB. These members are all determined to defend Europe’s values.
If we take the concrete case of energy transition, for example, how is the EIB likely to intervene? In his introduction, Eric Scotto, Chairman and CEO of Akuo Energy, highlighted the various themes in progress in this area: he particularly mentioned Africa, for which the EIB can provide guarantees; on agriculture where there is a possibility of creating hybrid funds to finance both agricultural projects and renewable energies; green mobility – “an opportunity for Europe” – with the possibility of creating fixed and sustainable jobs around renewable energy projects (hydrogen and electricity). The debate that followed allowed decision-makers from local authorities to make statements on urban transport projects with the financing of a hydrogen bus capital equipment project, support for private housing to support investors who want to prioritise energy investments, and a rail network. Pilar Solano, Head of New Products and Special Transactions at the EIB, outlined her work: she is seeking to finance projects with technological risks of up to 200 million to date, projects such as floating wind turbines, development of solar energy, an example solar cell plant and a project with wave energy. This fund also looks to accelerate projects that may not be very innovative but that are seeking a larger infrastructure. According to this Spanish expert, the effort required to finance the ecological transition is considerable, since 400 billion would have to be found to finance, for example, the generation of renewable energy. Today, the EIB has only financed 12 to 14 billion, or 3% of the target.
We can see from this all the challenges facing the European Bank, and the point of its new 32-partner Club which brings together public and private players, such as Bpi France, Carmat, Eiffel Investment group, the Île-de-France Region and Iliad. As Ambroise Fayole states: “Our partners can be proud to be funded by Europe because it means that they are also working towards the common good, locally, as close as possible to the French people, and for their future.”
It should be noted that on its website, the EIB defines itself as “the largest multilateral provider of climate and environment financing worldwide” And as its President Werner Hoyer says: “The EIB is a very good deal for the EU. It makes money work. Not the taxpayer’s money, but the money it raises from investors in the capital markets.” This is how, in its latest project, it intends to raise €2 billion for agriculture in Europe, and in particular to help young farmers.
We know that Europe faces fierce competition in science and technology from China and the United States, which have considerable resources and no qualms about investing billions in strategic sectors. Europeans would therefore be wrong to deprive themselves of this valuable tool.
One may also hope that a bank will be in a better position to judge the return on investment of innovations, and to make a careful selection of the projects it wants to support, unlike a state that would simply provide subsidies. An issue like energy transition needs to be approached with great caution and any decision based solely on scaremongering arguments must be avoided. As Bjorn Lomborg points out in a video for the Prager Institute, while alarm bells have been ringing for over twenty years now, CO2 emissions have continued to rise and this policy has only encouraged the pursuit of one type of climate policy, that has tried to reduce carbon emissions by subsidizing wind farms and solar panels. However, according to the International Energy Agency, only 0.4% of the energy consumed worldwide comes from solar and wind energy; and the agency’s most optimistic forecasts are that this figure will not exceed 2.2%. Also, as the President of the Environmental Assessment Institute points out, for the next two decades these two feel-good solutions will be expensive and will have an imperceptible impact on the climate. So, instead of subsidizing these energies, we should invest massively in green energy R&D to reduce their costs. A message that should be made loud and clear to the EIB’s stakeholders and its new Club.