13 brian field

European Investment Bank

Leadership and Management in Sustainable DevelopmentEuropean Summer School

Suor Orsola Benincasa University of Naples, 10th July, 2013

Promoting Sustainable Development&

Supporting the Recovery

The European Investment Bank

Brian G. FieldUrban Planning and Development Adviser

The European Investment Bank

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Problems in financing infrastructure projects

Even where underlying investments are sound, in the post crisis environment, projects can face difficulties in accessing finance:

Heightened degree of risk aversion by commercial banks

Deteriorating credit rating/debt ceilings

Difficulties for smaller private-sector providers to access finance

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EIB – Supporting projects promoting EU objectives

EU’s financing arm, established by the Treaty of Rome in 1958

EIB’s shareholders are the 27 EU Member States

Promoting EU objectives

Providing long term loans to the private and public sector, in a broad range of currencies

Total lending in 2011: EUR 60.9bn

Total lending in 2012: EUR 52.2bn

(EUR 79.1bn in 2009)

Large increase a consequence of the financial crisis (after a specific mandate from ECOFIN)

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Objectives and Instruments(a response to the financial crisis)

Objectives

Broadening the financing base for infrastructure investments

Increasing awareness and deepening the financial sector servicing such development needs

Harmonising and coordinating resources

Instruments

Medium to long-term senior loans

Subordinated loans

Letters of credit

Guarantees

Mezzanine debt instruments

Local debt securities

Equity

Technical Assistance support

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Funding strengths and value for customers

European Investment Bank

Funded mainly through bond issues on international capital markets, exploiting strong market positioning

Passing on funding advantage to loan customers

Not for profit (but also not for loss)

Large and frequent international bond issuer…EUR 71.3bn issues in 2012

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Typical Funding Instruments

Investment Loans.

Framework Loans.

Global Loans.

Funds.

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EIB Signatures 2012 (in EUR)

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The Leipzig Charter

SUSTAINABLE

COMMUNITIES

Innovation and education policiesHigh quality

public spaces

Infrastructure networks and energy efficiency

Regenerate deprived neighbourhoods

Improve physical environment

Training for children and the young

Local economy and labour

market policiesEfficient affordable

transport

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Overcoming FragmentationIntegrated Planning

An integrated approach to territorial development for effective improvement in the socio-economic conditions of settlements, whatever spatial scale, requires identification of the co-operating elements of infrastructure investment with the evolution of the social capital that should be developed simultaneously in the areas where applied.

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Integrated Planning and EIB’s Three Pillars

A project assessment with many facets, but three key elements in the appraisal process.

Eligibility, i.e. consistency with EU priorities.

Technical quality and economic soundness.

Financial viability and adequate security.

Projects must also comply with EU procurement, environmental and social protocols.

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The EIB Project Cycle

13/04/2023 11

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Benefits of an EIB loan

Large amounts

Broad range of currencies

Long maturities

Attractive interest rates

Catalyst for participation of other banks or financial partners

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Value Added of the Bank’s Activities

European Investment Bank

Support for EU priority objectives

Project quality and soundness

Financial benefits of EIB funds

Technical assistance

Project assessment

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Facilitating the Recovery

An enhanced role for EIB is not the solution to the crisis, but should certainly be part of the solution.

European Investment Bank

A capital injection of €10 billion

Leverage for significant additional borrowing and associated lending opportunities

Focus on the EU for the creative and sustainable deployment of additional funds

Promoting growth, sustainable development and employment generation

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Promoting European Objectives

European Investment Bank

Evolution of EIB lending activity

The EUR 10bn paid-in capital increase will enable a 40% lending growth over the base signature level foreseen in the Operational Plan 2012-2014

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Priority objectives for additional funding

European Investment Bank

Convergence

Small and medium-sized enterprises (SMEs) and mid-cap enterprises

Environmental sustainability

Knowledge economy

Trans European Networks (TENs)

Sustainable, competitive and secure energy

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Some Ingredients for Successful Projects

European Investment Bank

Informed by a clear plan and/or development strategy.

Commitment of, and clear benefits for, all relevant stakeholders both public and private.

Exploits the comparative advantage of its locality.

Promotes accepted best practice in sustainable development.

Exploits innovative financial instruments and, where/when appropriate, takes advantage of technical assistance.

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EIB CONTACT INFORMATION

Brian G. FieldRegional and Urban Division

European Investment Bank100 boulevard Konrad Adenauer

L-2950 LuxembourgTel: +352 4379 83063Email: [email protected]