The European Bank for Reconstruction and Development has approved a new five-year energy strategy targeting clean, secure and affordable supplies for all.
Renewables will be central to the new strategy with EBRD aiming to scale-up investment in clean power.
The bank will also support the integration of energy systems, promote the switch to cleaner and more resilient energy sources and facilitate electrification as a means to clean economies.
EBRD confirmed that it will no longer finance coal mining or coal-fired electricity generation.
The bank will also stop funding any upstream oil exploration, and will not finance upstream oil development projects except in “rare and exceptional circumstances, where such investments reduce greenhouse gas emissions”.
It will continue to support the gas sector where it is consistent with a low-carbon transition that is both secure and affordable.
EBRD managing director, energy and natural resources Nandita Parshad said: “Urgent and decisive steps are needed to address the challenges posed by climate change and poor air quality.
“This requires a fundamental shift away from hydrocarbons to cleaner energy sources. That means the electrification of economies, including industry, transport and heating, with that electricity generated overwhelmingly from renewable sources.
“This is the goal that we have placed at the centre of our new energy sector strategy: to decarbonise the power sector with a decisive shift away from the most polluting fuels.
“Achieving this goal requires smart, integrated and resilient networks and reliance on competitive, regionally integrated and resilient markets to deliver this change.
“Our dual role as investors and facilitators of policy reform, coupled with our commitment to promoting environmentally sound and sustainable development, means we are ideally placed to deliver this transition.”