Quantifying the effect of European Investment Bank financing on the low-carbon energy transition through 2050

Transforming energy systems towards net-zero emissions requires substantial investments. Public loans from state investment banks and multilateral banks like the European Investment Bank (EIB) are seen as key for lowering investment barriers. Yet the impact of the EIB's energy lending on future technology deployment is unclear. Here, we employ a sector-coupled energy transition pathway model to quantify EIB lending effects, considering two channels: derisking investments in higher-risk countries and accelerating the deployment of emerging technologies. Starting from heterogeneous country risks and the current EIB energy lending budget, we find that a trade-off exists in allocating the lending capacity: prioritizing emerging technologies, such as direct air capture and electrolysis, enables smoother emission reductions, but concentrates investment in Northern Europe, whereas derisking mature technologies primarily benefits Southern Europe. Our findings highlight the EIB's role in accelerating technology deployment and suggest that increasing its energy lending budget can support the net-zero transition.