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Regional Knowledge Center

The European Investment Bank (EIB)

The European Investment Bank (EIB) is the European Union's bank and the world’s largest multilateral borrower and lender providing finance and expertise for sustainable investment projects that contribute to EU policy objectives. 

Background

The European Investment Bank (EIB) is non-profit long-term lending banking institution established in 1958 under the Treaty of Rome. The EIB is a publicly owned international financial institution and its shareholders are the 28 EU member states. Thus, the member states set the bank's broad policy goals and oversee the two independent decision-making bodies – the board of governors and the board of directors.

It is the world’s largest international public lending institution.

Geographical scope

Although about 90 percent of projects financed by the EIB are based in EU member countries, the bank does fund projects in about 150 other countries – non-EU South-Eastern European countries, Mediterranean partner countries, ACP countries, Asian and Latin American countries, the members of the Eastern Partnership and Russia. According to the EIB, it works in these countries to implement the financial pillar of the Union’s external cooperation and development policies by encouraging private sector development, infrastructure development, security of energy supply and environmental sustainability.

In Central Asia, EIB is currently active in Tajikistan, Kazakhstan and most recently, Kyrgyzstan. The loans provided by the EIB come from the lending window for Asia provided under the mandate from the Council and European Parliament for the period 2014-2020, out of which 182 M€ has been made available for use in Central Asia.

In addition, Central Asian countries are eligible under the Bank’s own risk Climate Action & Environment Facility (CAEF) for investment grade projects in renewable energy, energy efficiency, carbon capture, transportation or storage projects aiming specifically to reduce greenhouse gas emissions and projects contributing substantially to security of EU energy supply.

Implementation and priority fields

Overall the lending strategy outside the EU follows the EIB’s priority objectives for lending activity:

  • Private sector development
  • Financial sector development
  • Infrastructure development
  • Security of energy supply
  • Environmental sustainability
  • EU presence.

In addition, to be eligible for Bank financing, projects are required to have good potential to contribute to the economic development of the beneficiary country.

More specifically for countries of Asia and Latin America (ALA) the EIB gives priority to the following types of projects:

Projects with a total investment above 25 M€ can be financed either directly to a project promoter or indirectly through a government or financial intermediary. Project promoters are required simply to provide the Bank's Operations Directorate with a detailed description of their capital investment together with the prospective financing arrangements. The total investment of a typical project under the ALA 2014-2020 mandate is above EUR 40m.

For smaller projects the EIB can provide credit lines to selected financial institutions, which then on-lend the funds mainly to small and medium-sized enterprises (SMEs). The financial institutions assess each project, assume the credit risk and set the loan conditions for the final beneficiary according to criteria agreed with the EIB.

  1. climate change mitigation and adaptation (e.g. renewable energy, energy efficiency, urban transport and other projects that reduce CO2 emissions);
  2. development of social and economic infrastructure, including water and sanitation;
  3. local private sector development, in particular support to SMEs.

Projects with a total investment above 25 M€ can be financed either directly to a project promoter or indirectly through a government or financial intermediary. Project promoters are required simply to provide the Bank's Operations Directorate with a detailed description of their capital investment together with the prospective financing arrangements. The total investment of a typical project under the ALA 2014-2020 mandate is above EUR 40m.

For smaller projects the EIB can provide credit lines to selected financial institutions, which then on-lend the funds mainly to small and medium-sized enterprises (SMEs). The financial institutions assess each project, assume the credit risk and set the loan conditions for the final beneficiary according to criteria agreed with the EIB.

Funding type

EIB provides 3 main funding types:

  • Lending: The vast majority of EIB financing is through loans, but EIB also offers guarantees, microfinance, equity investment, etc.
  • Blending: EIB support unlocks financing from other sources, particularly from the EU budget. This is blended with loans to form a full financing package.
  • Advising: Lack of finance is often only one barrier to investment. EIB helps with administrative and project management capacity to facilitate investment.
Project cycle

The EIB Project cycle includes 4 main stages:

  1. Applying for a loan
  2. Appraisal
  3. Procurement
  4. Monitoring.

EIB_project cycle

Contact details

European Investment Bank, 98-100, boulevard Konrad Adenauer, L-2950 Luxembourg.
EIB Switchboard: Tel: +352 43 79 1; fax +352 43 77 04
Information desk: Tel: +352 4379-22000; fax +352 4379-62000
http://www.eib.org/infocentre/contact/index.htm

This project is funded by the European Union

And implemented by a consortium led by