* Board approves energy strategy from 2014 to end-2018
* EBRD to widen renewables portfolio
* Finance for new coal plants only in special circumstances
By Nina Chestney
LONDON, Dec 10 The European Bank for
Reconstruction and Development (EBRD) will focus on energy
efficiency and renewable energy investments over the next five
years and slash its funding for coal projects, a managing
director at the bank told Reuters.
On Tuesday, the board of directors at the EBRD - a
multilateral development bank set up in 1991 to help former
Soviet countries develop market economies - approved its energy
strategy from 2014 to the end of 2018.
The EBRD has been investing in energy projects since 2006
across 34 countries in Central and Eastern Europe and Central
"The bank will continue operating in all sub-sectors of
energy, but everything will come from an energy efficiency
viewpoint," Riccardo Puliti, the EBRD's head of energy and
natural resources, said in an interview.
The EBRD has invested 6.3 billion euros ($8.6 billion) in
power and energy utilities since 2006. Around a third of that,
or 2 billion euros, has been directed at renewables, mostly
hydroelectric power and wind energy.
Building dams and reservoirs for large-scale hydro plants,
however, has been criticised for disrupting river flows, harming
local ecosystems and displacing populations.
The bank said it would focus on improving the efficiency and
capacity of existing hydro plants and support new plants only
when they meet strict environmental rules.
The EBRD will also try to widen its renewables portfolio to
include solar photovoltaic, geothermal, concentrated solar
thermal electricity generation where it is affordable, and
biomass and biogas projects subject to strict guidelines that
ensure feedstocks are sustainable.
The EBRD, whose shareholders are 64 countries plus the
European Union and the European Investment Bank, has invested
521 million euros in coal projects since 2006, equivalent to 6
percent of its investments in energy and natural resources.
Puliti expects the bank's coal financing to fall as
investments in new plants will occur only in "rare and
exceptional circumstances" when there are no economically viable
alternative energy sources.
The move comes only months after other institutions such as
the World Bank decided to curb lending to coal projects to help
tackle the impact of climate change.
Some governments, including the United States, Britain,
Norway, Sweden and Finland, have also said they will stop
financing coal projects abroad.
"It looks like a concerted effort but the issue of climate
change and the role of coal has always been a concern for
international finance institutions," Puliti said.
The bank will consider financing efficiency improvements to
existing coal-fired plants when there is significant potential
to reduce greenhouse gas emissions.
New coal plants would also have to be able to fit carbon
capture and storage technology, which traps and buries carbon
dioxide emissions underground, when it becomes available on a
The bank will also support the installation of efficient
gas-fired plants and back fuel-switching from coal to gas, which
produces fewer emissions.
But its strategy was non-committal about financing
unconventional gas sources, such as shale gas.
"We may consider funding unconventional hydrocarbons in the
future but we will take a final decision only when we see the
first commercially viable projects on the horizon," Puliti said.
($1 = 0.7289 euros)
(Editing by Dale Hudson)