The European Investment Bank will support and finance the development of energy efficiency and sustainable energy investment programmes by Europe's cities and regions, EIB President Philippe Maystadt announced on Tuesday.

Speaking at the signature ceremony in Brussels of the European Union's "Covenant of Mayors" initiative, Mr Maystadt said urban areas represent a big potential source for energy saving, thereby helping to combat climate change.

"Urban areas account for as much as 70% of EU energy consumption. Most of this is related to buildings, urban transport and small firms.  We believe that cities have a substantial potential to both reduce this consumption and to make significant progress in the adoption of renewable energies solutions such as solar photovoltaic technologies," he said.

The EIB is working with the European Commission to set up a EUR 15 million grant fund, managed by the Bank, to support project development for this type of activity during the course of this year. In addition, it is stepping up its ordinary lending activities to the sector.

The EIB's Board of Directors last week approved a EUR 200 million loan to France's Poitou-Charentes region to support its plans to install photovoltaic panels on public, industrial and commercial buildings.  The Bank is also in talks about projects in Barcelona, Milan and a number of other cities, Mr Maystadt said.

Last year the EIB lent more than EUR 10 billion to the energy sector, with more than 20% lent in the field of renewable energies. To complement this, and in-line with its policy of emphasising sustainable forms of transport, the Bank also lent in 2008 EUR 2.6 billion for urban public transport systems.

The financing of urban investments of this kind will be the main theme of this year's EIB Forum, due to take place in Barcelona on March 12-13, 2009.

Background

The European Investment Bank was created by the Treaty of Rome in 1958 as the long-term lending arm of the European Union. The task of the Bank is to contribute towards the integration, balanced development and economic and social cohesion of the EU Member States. The EIB raises substantial volumes of funds on the capital markets which it lends on favourable terms to projects furthering EU policy objectives. The EIB continuously adapts its activity to developments in EU policies.

For background on the Covenant of Mayors initiative see: www.eumayors.eu