EU politicians urge more money for energy fund
Paris, 13 March: The European Parliament gave its backing today to plans to create a global fund to boost energy efficiency and renewable energy, but warned that its target budget of €100 million ($150 million) was “woefully inadequate”.

The Parliament adopted the European Commission’s proposals for a Global Energy Efficiency and Renewable Energy Fund (GEEREF) to encourage private investment in energy efficiency and renewable energy projects in developing countries.

However, it said the suggested minimum funding target of €100 million was too low and criticised the Commission’s intention of kick-starting the fund with only €15 million.

The Commission is to provide €80 million over four years, with other public finance institutions expected to take that total to more than €100 million. The Commission believes this could “under ideal conditions” mobilise additional capital of up to €1 billion.

The Parliament urged the Commission to increase its contribution and encouraged member states and multilateral finance institutions to join forces in order to significantly increase the size of the fund.

It also called for the fund to focus on supporting small-scale projects that find it most difficult to attract private sector investment arguing that at least one-third of the finances should be given to projects costing less than €1 million.

The fund should likewise prioritise the funding of energy efficiency and renewable energy projects over biomass projects, which should meet rigorous sustainability criteria, said the Parliament. 

Claude Turmes, vice-president of the European Green party, said Parliament's support for the fund was “an important signal to developing countries” and he welcomed the agreement “to be strict on biomass investment in order not to encourage dubious projects”.

The GEEREF was first discussed during the 2002 World Summit for Sustainable Development in Johannesburg, but it was not unveiled by the European Commission until October 2006.