The European Bank for Reconstruction and Development (EBRD) will include climate resilient debt clauses (CRDC) in new loan agreements with sovereign, sovereign-guaranteed and municipal clients from lower-middle-income countries where it works, EBRD President Odile Renaud-Basso announced today at COP28, the global climate summit in Dubai. 

The EBRD’s CRDC will enable the deferral of repayment of loan principal for two years in the event of occurrence of an extreme climate-related or natural disaster, covering floods, droughts and earthquakes, the scale of which necessitates declaration of a state of emergency by the affected country. Eligible clients are expected to be able to start opting for the clause in their loan agreements by around mid-2024.   

CRDCs are primarily a short-term liquidity support tool which could provide borrowers with a fiscal “breathing space” at the time of a severe climate-induced or natural disaster, allowing them to repurpose financial resources from debt servicing to immediate response and recovery needs, and addressing the loss and damage from the impacts of climate change and natural hazards.    

The EBRD made its announcement along with other multilateral development banks – the African Development Bank (AfDB), the European Investment Bank (EIB) and the World Bank – at a COP28 event on climate resilient debt clauses.  

The increasing frequency and severity of extreme weather events worldwide in recent years has given added prominence to work on both climate adaptation and emergency responses to such events.  

The EBRD, a leader in climate finance in central and eastern Europe, Central Asia and the southern and eastern Mediterranean, has aligned all its activities with the goals of the Paris Agreement and has committed to make at least half its investment volumes green by 2025, a goal it has met for the past two years. 

Source: EBRD News

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The European Bank for Reconstruction and Development (EBRD) is conducting a study of Sustainable Transport Connections between Asia and Europe funded by the European Commission, Zsuzsanna Hargitai, EBRD Managing Director for Central Asia, told Trend.

According to the managing director, the study, which should be finalized by summer 2023, is aiming to identify the most sustainable transport connections between the Central Asian states and the extended Trans-European Transport Network (TEN-T).

“It has two objectives: to identify the most sustainable transport corridors connecting the five Central Asian states with the EU’s TEN-T, including the Caucasus, and to propose actions for their development, including the actual infrastructure investments and necessary enabling environment,” she explained.

As Hargitai pointed out, until recently, the main route linking North-East Asia with Europe was the Eurasian Northern Corridor.

“It was using Trans-Siberian railway from Russia’s Far East with its branches going through Kazakhstan and Mongolia. The Middle or Transcaspian Corridor running through the territory of Kazakhstan is generally considered to be the second-best land-based option, despite not being a complete alternative to the Northern one. Should this corridor become a more preferred new route for freight companies, a diversion of transit cargo exceeding 10 percent of the Northern Corridor’s tonnage will require large investment across the entire corridor and its economic efficiency is yet to be assessed,” she said.

According to Hargitai, the EBRD is already working with transport and logistical companies along the Middle Corridor such as Kazakhstan’s Temirservice Astana.

“This is an operator of the first private railway station in Kazakhstan. Last year the Bank also signed a memorandum of understanding with a sea port of Aktau. The EBRD is considering a loan, which will support the modernization of cargo handling equipment and related port infrastructure,” the managing director added.

Source : Trend

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