A prosperous ocean to support Europe

(Source: European Investment Bank)

EIB Vice-President Ricardo Mourinho Félix’s speech at the conference “A Blue Agenda in The Green Deal,” hosted by the Portuguese Presidency of the Council of the European Union.

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Dear ladies and gentlemen,

It is a great pleasure for me to be here with you today.

I want to start by thanking the Portuguese Presidency for bringing us here together.

I also want to thank the Minister of the Sea of Portugal, Ricardo Serrão Santos for the kind invitation.

In these exceptional times, the impact of the COVID-19 crisis is still unfolding. But while we are focused on cushioning its fallout, we have to think and plan for the recovery and for the future. Ensuring a green and sustainable recovery is of strategic importance. This is especially true for oceans and the blue economy.

The European Green Deal is a game changer. I believe it has the potential to deliver the necessary paradigm shift for the benefit of future generations. It tackles the crisis head-on.

1)  It is ambitious,

2)  It is comprehensive, and

3)  It has strong focus on growth and jobs.

Oceans will play a major role to achieve the ambition set by the Green Deal.

I am surely preaching to the converted. But let me emphasise that healthy oceans are just as important for the global economy as for the climate.

Oceans absorb 20 to 30% of global greenhouse gas emissions.

Oceans are the lungs of the planet, strange as it may sound.

Half of the world’s oxygen we breathe is produced by phytoplankton in the ocean.

Oceans have an enormous potential to drive global sustainable growth and reduce poverty.

By 2030, the ocean economy could more than double its value compared to 2016: over USD3 trillion.

This is larger than the annual economic output of France, India or the UK.

It is a huge opportunity for investors and for our economic prosperity.

The survival of humankind depends on the health of the oceans.

In order to develop a leading and innovative blue economy, Europe needs to scale up local investments.

Significant support is available from the European Union, namely from the EU budget and from EIB funding.

Engagement is the name of the game: strong engagement of national and local authorities is critical.

The EU Recovery Funds are a unique opportunity to address market gaps to develop the Blue Economy.

The size and complexity of the blue economy requires very large amounts of private investment.

Public resources are a just a drop in the ocean. But a powerful drop to mobilising private investment.

Development of the blue economy will be about encouraging innovation, creating a clear and transparent framework and providing the right incentives.

But blue economy projects often face constraints when accessing private capital, because they deal with disruptive technologies and incomplete markets. Building investor confidence and mobilising the private sector requires private capital and skills and is key for driving growth in the blue sectors.

To address this problem, with the European Commission, we have developed financial instruments to bridge finance gaps and support the implementation of climate innovation. The objective is to reduce the risk in those projects and attract private investors.

One of them is the BlueInvest Fund of Funds that the EIB Group launched under the leadership of the European Investment Fund.

Backed by a guarantee from the European Fund for Strategic Investment, the BlueInvest Fund finances firms with innovative products and services that can help the blue economy deliver the EU’s Green Deal priorities. The fund provides finance to funds that are targeting the sustainable blue economy or firms backed by general funds.

Together with the Portuguese Government, the EIF also launched last year, via Instituição Financeira de Desenvolvimento (IFD), now Banco Português de Fomento (BPF), a new investment partnership targeting blue economy start-ups, SMEs and mid-caps at every stage of development. The new partnership, established as a fund of funds called Portugal Blue, aims to provide €50 million to foster the Portuguese blue economy ecosystem by providing early-stage equity and support fund managers investing in Portuguese companies.

Significant support is also available under InnovFin, a joint initiative by the European Investment Bank and the European Commission, which provides finance for innovators working in the blue economy and other sectors. This initiative facilitates and accelerates access to finance for innovative businesses and entities.

I am proud to say that the EIB has been supporting the blue economy since its establishment in 1958 and often acted as a pioneer investing in innovative ocean technology. Having been amongst the first lenders to provide project finance for offshore wind in Europe, the EIB has been at the heart of financing the growth in this industry.

Over the last fifteen years, offshore wind has matured significantly in the European Union. Starting from a limited number of demonstration plants, the sector progressed to an installed capacity of 25 gigawatts. The EIB co-financed close to one third of all offshore wind production in Europe.

EIB contribution to the growth in offshore wind stemmed from a deliberate choice in the early 2000s to engage with emerging renewable technologies on the basis of a “learning-by-doing’’ rationale.

This long-standing commitment has allowed the EIB to become a reliable and trusted partner of the offshore wind industry, and the Bank intends to continue to support this young industry. Since 2003, the EIB has financed 33 offshore wind and transmission projects in the EU for a total signed loan amount of more than €11 billion.

We are also committed to finance the next major innovation in offshore wind – floating offshore wind. The new technology enables the deployment of offshore wind turbines in regions of great depth where a fixed bottom is not feasible.

EIB financed the first of a kind Windfloat project in Portugal, off the coast of Viana de Castelo, with very successful results. We are now strongly supporting four demo projects of the French floating wind energy programme.

When supporting new projects, we always regard ourselves as a crowding-in bank. In other words, we use our firepower to promote private investment.

Over the last years, we have been stepping up our efforts in support of a sustainable blue economy. In 2019, we launched the Blue Sustainable Ocean Strategy (Blue SOS). We aim to invest €2.5 billion until 2023 in sustainable ocean projects. Through our financing, we aim to mobilise more than €5 billion in public and private investment for the ocean economy. The “Blue SOS” targets sustainable coastal development and protection projects, sustainable seafood production, green shipping and blue biotechnology.

And our activities go beyond the EU. Another example is the Clean Oceans InitiativeIt identifies projects that fight plastic waste in rivers, seas and on land. The goal is to finance €2 billion in public and private sector projects by 2023. The European Investment Bank, together with the Agence Française de Développement (AFD) and KfW, the German promotional bank, launched the Clean Oceans Initiative in October 2018. Last year Cassa Depositi e Prestiti (CDP) from Italy and the Spanish national promotional bank Instituto de Crédito Oficial (ICO) joined in. I am happy to tell you that we have already signed about 70% of the target amount.

For decades, oceans have cushioned the effects of climate change by absorbing excess heat and carbon dioxide.

The COVID-19 pandemic is further accelerating plastic pollution, and we may see increasing pressure on marine and coastal ecosystems.

Good governance of oceans will be essential.

The contribution of national governments and international financial institutions will be crucial to:

  • Increase the awareness and the participation of private sector and of policy makers regarding the economic case for investments in the sustainable blue economy.
  • Increase the financing available for the blue economy.

Governments, donors and financial institutions are pivotal in driving the ocean sustainability agenda.

Investors need to have clear guidance and legal certainty towards sustainable investment.

They need to know what “sustainable blue investment” will look like.

EIB works with WWF, UNEP FI, the European Commission, and the World Resources Institute set up the Sustainable Blue Economy Finance Principles and Initiative, with input from the World Bank and other financial institutions.

The aim is to provide clear and guiding framework for financing a sustainable ocean economy.

This platform is bringing together financial institutions, scientists, corporations and the civil society.

The aim is to also promote the implementation of SDG 14 Life Below Water and set standards, allowing the financial industry to mainstream sustainability of ocean-based sectors.

Portugal was one of the first countries to endorse these Principles.

The engagement of governments is a key step.

I am delighted that Portugal is leading the way in this respect.

An integrated approach is far more relevant in the context of COVID-19.

There is no doubt we must be able to address immediate health, social and economic needs, based on long-term strategy that accounts for economic, social and environmental sustainability.

The adoption and implementation of the Principles will substantially assist this process by:

  • providing a harmonised integrated framework, and
  • enabling MDBs and private sector finance community, to play a central role in “Building Forward Bluer.”

Today, it is hard to overstate how important it is to step up our actions to preserve the oceans and combat climate change. If we do not act, by the end of the century, rising sea levels could submerge the homeland of 280 million people. The cost of flood damage will increase by 100 to 1000 times.

As simple as that. As complex as that.

But let’s not forget that these are man-made problemsIf we work together, these problems can be solved.

That’s why the EIB, the EU Climate bank, stepped up its ambitions.

We aim to mobilise more than €1 trillion of climate action and environmental investment by 2030.

At least 50% of EIB finance will be for climate action and environmental sustainability by 2025 and beyond.

I take the opportunity to congratulate Portugal in approving a new National Ocean Strategy last month. It is enshrining the commitment to protect the ocean and ensure its sustainable development.

Last month, the EIB and the European Commission announced they are joining forces to protect oceans and boost investment in the blue economy by:

  • Identifying projects to avoid and reduce pollution of the oceans and seas.
  • Finding joint solutions for equity and guarantee funding for blue innovation and the bioeconomy.

And a lot is also happening elsewhere.

  • From July 2021, single-use plastics will be banned across the EU.
  • Countries around the world are expanding protected marine areas. Thanks to conservation efforts and tight fishing quotas, some threatened fish species such as sharks and North Sea cod are recovering.

These and other success stories inspire effort for further change.

To raise awareness about the importance of our oceans and the threat posed by plastics, we published The Ocean Plastic Reduction Guide this week. This guide is intended to inspire action and change among planners, policymakers and project promoters, with particular focus on promoting circular solutions to prevent ocean plastic pollution.

Ladies and gentlemen,

The ocean is still resilient and if we invest in its protection and sustainable development, it will start to recover.

We owe it to our children to try and lead the way towards a sustainable financing of the blue economy.

This is the challenge that we all need to address together.

The Blue Economy is a key part of the Green Transition.

I used to say that we should remember that without enough Blue, Green is just Yellow.

We cannot make our Green transition turn yellow.

Thank you

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