The European Investment Bank (EIB) is set to unveil its ‘EIB Global’ initiative, which aims to streamline and strengthen its action outside the European Union, in response to a request made in May 2021 by the Council of the EU in the context of the reflection on the European financial architecture for development (see EUROPE 12741/23).
“In line with the overall reform of the EU’s global activities and following the request by the EU Council (...), we have embarked on a process to reform EIB’s activities outside the EU and establish a specialised development finance arm”, said EIB President Werner Hoyer, presenting the EU Bank’s 2021 results on Thursday 27 January.
The ‘EIB Global’ initiative will bring together resources and expertise dedicated to development finance under a “clear governance structure” and will make a “stronger and more focused contribution” to Team Europe, Mr Hoyer added, referring to the approach of mobilising funds from the EU, its Member States and financial institutions (EIB and EBRD) in vulnerable third countries.
These resources include the EU’s NDICI financial instrument for neighbourhood, development and international cooperation, which EIB Global will manage on behalf of the EIB Group (see EUROPE 12737/4).
On the governance of the initiative, a dedicated expert group will be set up in February to advise the EIB Board of Directors. Already present in 30 third countries, the EU Bank will extend its reach, notably through the network of EU delegations.
“We will bring bankers and engineers to the ground (...) to be involved in the origination and preparation of projects, in accelerating disbursements, monitoring and trouble-shooting... and, crucially, to learn from each other”, said the EIB president.
The initiative will be a key partner of the European Commission in the realisation of the ‘Global Gateway’ strategy to counter the Chinese ‘New Silk Road’ initiative (see EUROPE 12844/7).
When asked about some of the shortcomings identified by NGOs regarding the negative impact of EIB-financed projects on human rights, Mr Hoyer acknowledged the importance of reviewing and constantly improving the monitoring processes in place. More than 20 organisations, including WWF and Counter Balance, are calling on the EIB to develop a real human rights strategy to complement its climate and gender equality strategies.
See the NGO letter: https://bit.ly/33QY6wP
More than 50% of loans granted for climate transition
Mr Hoyer also highlighted the fact that, in addition to its support for the fight against the Covid-19 pandemic, the EIB had allocated more than 50% of its total lending to the climate transition by 2021, “four years ahead of schedule”.
The EIB has also adopted a framework that will help align its counterparts with the Paris Agreement with the aim of working with borrowers and beneficiaries to adapt their climate change strategies.
“This means, for example, that we will not finance a windfarm by a highly polluting company if the company does not credibly commit to phasing out its polluting business at the same time”, Mr Hoyer said.
Of the €95 billion in funding in 2021 (€77 billion in 2020), almost a quarter of the total was dedicated to the economic response to the pandemic. Notably, supplied with €24.4 billion, the pan-European guarantee fund set up in 2020 (see EUROPE 12640/4) has been spread over 400 operations in 22 Member States and should be able to mobilise around €175 billion of investment.
See the EIB’s Annual Activity Report: https://bit.ly/3s2BMsa (Original version in French by Mathieu Bion)