Two new schemes that aim to encourage greater private sector investment will be launched today.
The European Investment Bank (EIB) and European Commission (EU) together are backing investment for both schemes.
The Private Finance for Energy Efficiency (PF4EE) scheme and the Natural Capital Financing Facility (NCFF) scheme are being launched as part of an effort to encourage more private sector involvement in saving energy and maintaining the natural environment.
They will be managed by the EIB and the EU will provide €80 million (£59m) for credit risk protection of energy efficiency loan portfolios and support of technical expertise. It is estimated €500 million (£371m) of funding could be unlocked by the initiative.
The NCFF will support projects that are focused on biodiversity and eco-system services, which are things like clean flood protection and rainwater recycling.
Jonathan Taylor, European Investment Bank Vice President responsible for climate action and energy said: “Enabling broader private sector involvement in climate finance and investment in natural capital projects is essential to tackle challenges of this scale.
“These will help financial institutions and other investors to increase their role and contribute to improving specialist understanding essential for the financing of viable projects in these areas.”
The PF4EE scheme hopes to improve access for financing energy efficient projects by encouraging banks in EU member states to increase lending.
It will do this by providing long-term low cost loans and credit risk protection to financial intermediaries like banks and building societies.
Miguel Arias Cañete, European Commissioner for Climate Action and Energy added: “The new instruments will unlock significant public and private investment in key strategic areas like energy efficiency and climate protection. This is a contribution to protecting the climate, saving energy for our citizens and making Europe less dependent on imported energy. This is what building an Energy Union is all about.”