LONDON (Reuters) - The European Bank for Reconstruction and Development will stop financing coal projects and nearly all oil projects, it said on Wednesday, as part of a global effort by government-owned development banks to reduce climate change.
The bank was already prioritising renewable energy and other "green economy" work but the move will now eliminate exceptions like Mongolia and Poland and Kazakhstan which get over 70 percent of their domestic energy from coal.
Decarbonising the EBRD region's energy sectors requires a shift away from the most polluting fuels, said Nandita Parshad, EBRD Managing Director of Energy and Natural Resources.
The new strategy sets the strategic direction of the bank's investments for the next five years.
From January, the EBRD is also adopting a "Shadow Carbon Pricing Methodology" for use in EBRD projects with significant greenhouse gas emission footprints.
When considering such projects, the bank will carry out analysis that will account for the cost of greenhouse gas emissions. The EBRD’s approach, including the range of 'shadow prices' it intends to use based on the high-level commission on carbon pricing, will be made available in early 2019.
(Reporting by Clara Busso and Marc Jones; Editing by Adrian Croft)