Over the past four years, the European Investment Bank (EIB) - the EU's house bank - has lent €48 billion (Dh230.38bn) to energy projects around the world.
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The EIB lends more to the energy sector than to any other, except transport - and its €72bn total loan portfolio last year made it a bigger lender than the World Bank.
Investment on this scale can help countries worldwide to make vital progress on reducing greenhouse-gas emissions at a time when political solutions based on international agreement remain elusive.
Unfortunately, the EIB's lending priorities and energy-investment portfolio are making the problem worse.
In 2007, the EIB adopted its first energy policy - "Clean Energy for Europe: A Reinforced EIB Contribution". Since then, the bank has significantly increased its lending for renewable energy, which totalled €13bn from 2007 to last year.
Yet, over the same period, the bank compromised this performance by lending €16bn for fossil-fuel projects, one third of the institution's total energy lending. The EIB's fossil-fuel lending grew from €2.8bn in 2007 to €5bn last year, including new coal units in Germany and Slovenia.
In new EU member states, the EIB has supported mostly high-carbon energy, which traps these countries in unsustainable energy systems.
The EIB also lent North African countries and Syria €1.6bn for fossil fuels between 2007 and last year, an amount constituting 30 per cent of its total lending to the region.
Make no mistake: these are long-term investments. The energy infrastructure built today will be used for at least 40 years, thereby tying countries to carbon-dependent paths.
In Slovenia, if the government implements EU-wide climate targets, the new EIB-financed Sostanj lignite unit will consume most of that country's carbon dioxide emissions quota by 2050. Meanwhile, the EIB invests only 5 per cent of its energy portfolio in energy-efficiency programmes.
The EIB argues that fossil-fuel lending supports strategic projects that safeguard European energy security. That is partly true: EU members' political interests do drive some of this lending, particularly investments in oil and gas import infrastructure.
The EU's goals therefore embody an inherent contradiction - energy security versus climate-change prevention - which makes it difficult for the EIB to clean up its energy portfolio.
Yet a closer look shows that €6.7bn of the €16bn that the EIB lent for fossil fuels went to coal, gas, and oil-fired plants, both inside and outside the EU - not to EU energy-security projects. These figures suggest that the EIB may simply find dirty energy projects more familiar, easier to access and more profitable.
But the EIB, which is both an investment bank and the EU's public bank, is uniquely placed to lead markets, and should not merely be following them. As a public bank, its financial operations are guaranteed by European taxpayers' money, and its capital is immense. Moreover, it benefits from the information and know-how of EU institutions.
If the EIB were to put its clout behind renewable energy and energy efficiency, it could help to reconcile energy security and the fight against climate change. And Europe could lead that fight if it fully exploited its renewable and energy-efficiency potential.
The EU would then have little need to rely on dirty-energy imports from politically unstable parts of the world.
The EIB must act more courageously to clean up its energy-lending portfolio. Coal investments must be stopped immediately, and a plan to phase out all fossil-fuel lending should be prepared and implemented as soon as possible. The capital from fossil-fuel investments could be redirected towards green projects.
For regions such as central and eastern Europe, where the EIB argues that it is more difficult to find investment opportunities, the bank must develop targeted instruments and technical assistance that supports small-scale renewable-energy projects. It must also encourage governments to build flexible power grids.
Weaning Europe from its addiction to fossil fuels will not be easy. But if the EU's house bank will not accept the challenge, it is difficult to imagine who will.
Manana Kochladze is a campaigner at CEE Bankwatch Network, a non-governmental organisation that monitors international financial institutions active in central and eastern Europe. She is the winner of the 2004 Goldman Environmental Prize.
* Project Syndicate
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