With the call to increase investments in energy efficiency to be able to meet net-zero goals, the European Investment Bank (EIB) has embarked on a new initiative that is expected to help Spain and Portugal save big.
The EIB and Union de Creditos Inmobiliarios (UCI) have agreed on a financing package aimed at improving energy efficiency in existing buildings in the two European Countries. The €50 million ($60.6 million) investment will be used to provide green and sustainable loans to individuals and condominiums for buildings’ renovations or for the purchase of new buildings that meet the requirements set under the European Mortgage Federation in the Energy efficient Mortgages Action Plan.
Renovation projects should result in at least a 30% improvement in energy efficiency while for the purchase of new homes the buildings must have near-zero energy use. Once issued, the loan package is expected to save up to 57.3GWh per annum in Spain and Portugal, enough electricity to power 14,000 households per year, or the equivalent of reducing carbon emissions by 10,269 tonnes a year. Moreover, 940 jobs are expected to be created from the loans, a development that will help accelerate the recovery of the two economies from the COVID-19 pandemic.
EIB Vice-President Ricardo Mourinho Félix, who is responsible for the EU bank’s operations in Spain, said: “Around 75% of buildings currently have low energy efficiency and, more critically, almost 85-95% of them will still be in use by 2050. The ongoing pandemic must not make us forget that the recovery of the European economy must continue to focus on climate action.”
Only 1% of buildings in Europe are upgraded with efficient equipment and technologies per year, according to the European Union, yet the climate emergency requires a significant percentage of the the bloc’s existing buildings be renovated. The lack of funding and unwillingness by building owners are some of the reasons the majority of buildings in the EU are not in line with the energy efficiency standards required to mitigate climate change, one could argue.
This has pushed the European Committee of the Regions (CoR) and the European Commission to prioritise energy efficiency and develop an integrated energy system capable of driving the bloc to carbon neutrality by 2050. CoR urged the EU Commission to revise state aid schemes and ensure flexible budget rules to maximise investments and renovations, the implementation of subnational targets for the renovation of buildings and the integration of renewable energy sources for the bloc to take full advantage of energy efficiency in meeting its 2050 decarbonisation goals.
Commenting on the importance of energy efficiency, Apostolos Tzitzikostas, CoR’s president, said: “Making our buildings energy efficient will save money, reduce emissions and tackle energy poverty which affects 34 million people in Europe.”
However, the European Union has, since the launch of the Green Deal and increasing calls to prioritise climate mitigation, launched a number of programmes and enacted various laws to ensure more buildings are renovated using new standards. These include A Renovation Wave for Europe – Greening our buildings, creating jobs, improving lives, a strategy to double annual energy renovation rates in the next ten years. Some 16,000 green jobs are expected to be created from the plan.
Roberto Colomer, the CEO of UCI, reiterated: “We are proud to expand our partnership with the European Investment Bank (EIB) to further develop our sustainable financing strategy on the Iberian peninsula and contribute to the decarbonisation of the real estate stock both in Spain and Portugal.”