Stringent EU rules on sustainable finance are preventing investment in emerging markets, the head of one of the EU’s largest development banks has said, warning that Chinese and Middle Eastern groups are filling the gap. “The requirements are so strict for the moment that the chances of potential clients in emerging markets moving to other financiers, for instance from east Asia, is really serious,” said Michael Jongeneel, chief executive of FMO, the Dutch development finance institution.
EDFI last month echoed Jongeneel’s criticism that the rules on sustainable finance, laid out by the European Commission in 2018 ahead of its landmark Green Deal, are harming development banks’ ability to advance the Global Gateway goals. EDFI chair Luuk Zonneveld warned against “setting the bar too high”, adding: “We run the risk that impact investing slows down to such an extent that Europe’s influence on standards . . .