Financial Leverage in Renewable Energy

European Investment Bank in Luxembourg

One of the energy sector’s biggest lenders, the European Investment Bank, recently decided to cease all dealing with the fossil fuel industry and focus entirely on renewable energy.

Well, that’s only about €15 billion ($16.6 billion) annually; how important can that be?  Well, remember that private investors kick in seven euros for every one the EIB puts into a project or business.  Now we’re talking about serious cash: around €120 billion ($133 billion) of total public and private investment in the energy sector that is directed by this momentous decision the EIB made.

Adding to the impact of the Divestment Movement, all this puts pressure on fossil fuels by reducing the supply of and thus driving up the cost of capital.

In addition, it’s an expression of public enmity towards those who don’t care about the damage this civilization is doing to the environment.

That’s something to celebrate.