EIB Impact 2016: Increase in funding levels [free access]
February 1, 2017
In January 2017, the President of the European Investment Bank presented the results for 2016 and the outlook for 2017 at the EIB’s annual press conference. The presentation, delivered in Brussels, laid out the EIB Group’s contribution to creating jobs and growth in Europe by supporting projects and investment in SMEs, key infrastructure, innovation and the environment. The EIB Group consists of the EIB and the European Investment Fund (EIF).
- The EIB Group has signed funding of EUR83.8 billion to support total investments of EUR280 billion in 2016.
- EIB Group delivered a record EUR33 billion in financing for small and medium-size enterprises (SME) to benefit 300,000 smaller companies, which employ 4.4 million people.
- EIB operations under the Investment Plan for Europe are well on track: projects have been approved in all EU countries and 52 per cent of the target to mobilise EUR315 billion has been achieved.
- EIB will provide USD100 billion of climate action finance over the next five years, the largest contribution of any multilateral institution.
The sectors supported by the EIB Group are critical in terms of their long-term impact on competitiveness and growth. In 2016, close to EUR20 billion went to infrastructure, EUR17 billion to environmental projects, EUR13 billion for innovation and high-speed broadband connections.
On climate action, the EIB has for the seventh year running exceeded its target, providing over EUR19 billion to help mitigate climate change and adapt to its impact. This represents 26 per cent of total EIB lending in 2016.
Transport is by far the largest sector in which the EIB has been active since its foundation. The EIB finances urban mobility, rail, aviation, maritime and road projects that are climate-friendly, safe, sustainable and innovative. It supports research, development and innovation projects aimed at making transport efficient, economic and sustainable.
Urban mobility includes the construction and extension/rehabilitation of public transport networks such as metro and tramway lines, and rapid transit bus systems; acquisition of rolling stock and buses; promotion of cycling and pedestrian networks; development of intelligent traffic management and information systems to improve public transport, such as electronic ticketing, traffic management and communication systems.
Rail includes rehabilitation, upgrading or electrification of existing lines; construction of new lines, signalling systems and intermodal terminals; financing of rolling stock for freight and passenger services, both conventional and high-speed.
Trans-European Transport and Energy Networks (TEN-T) links regional and national infrastructure to create coherent European systems for interconnection and interoperability. It mainly includes transport and energy, and Information and Communications Technology (ICT).
Whilst the EU is the main focus, TEN-T policy extends to EU’s neighbours, including Enlargement countries, the European Free Trade Association, Western Balkans, Mediterranean Partner Countries and EU’s Eastern neighbours.
The EIB is self-financed: lending activities are mainly funded via bond issuance in the international capital markets. Despite periods of market uncertainty last year, the Bank successfully raised EUR66.4 billion from investors around the world. Ten years after pioneering the first Green Bonds, it remains the largest issuer, with over EUR15 billion raised for climate projects since 2007.
- Project loans to finance a transport project or programme with a total investment cost in excess of EUR25 million. The bank does not cover more than 50 per cent of the total project cost. Example - development of Dublin Port.
- Intermediated loans to local banks and other intermediaries which then lend-on to the final beneficiaries. Example - loan to Baden-Württemberg region to buy trains and lease them to service operators who otherwise would have been excluded from the project tender.
- Framework loans to finance transport schemes with a total investment cost of less than EUR25 million by combining several projects under one loan. Example - renewal and upgrade of the Madrid metro network.
- Infrastructure equity funds catalyse investment in transport by making capital-intensive investments
- The Project Bond Initiative is a joint initiative by the EIB and EC to facilitate access to finance by offering credit enhancement to help project promoters to attract additional private finance from institutional investors such as insurance companies and pension funds.
- Connecting Europe Facility (CEF) develops innovative financial instruments to finance a range of projects.
- Loan guarantee instruments (LGTT) cover revenue risks in the early stages of public-private partnership (PPP) transport projects to facilitate more private sector involvement in the financing of TEN-T.
- Joint Assistance to Support Projects in European Regions (JASPERS) prepares, evaluates and supports the implementation of transport projects. Example - Warsaw Metro
- European Public-Private Partnership Centre (EPEC) supports PPPs
- European Investment Advisory Hub (EIAH) offers a single access point to 360 degree offer of advisory and technical assistance services.
- Financing the bus fleet renovation carried out by the public company managing urban transport in the municipality of Palma de Mallorca, the capital of the island of Mallorca in Spain (EIB funding EUR60 million, total cost EUR60 million)
- Investment fund focusing on infrastructure projects in the Baltic countries for the energy, transport and health sectors (EIB funding EUR20 million, total cost EUR80 million)
- Upper Silesia urban framework programme (EUR14.6 million)
- Acquisition of electrically powered rolling stock for use on Merseytravel's network in Merseyside, Cheshire and West Lancashire in the northwest of England together with associated upgrades to the railway's infrastructure and maintenance depots (EUR223 million)
- Infracapital Greenfield Infrastructure Fund – Transport sector (EUR21.8 million)
- Construction of the 13.4-km long Atakoy-Ikitelli metro line with 12 new stations on the European side of Istanbul. The new metro line will intersect with six different urban rail systems and provide improved network connections (EUR250 million)
- Modernisation of railway systems in Ukraine (EUR150 million)
- Purchase of new and modernisation of existing rolling stock for Przewozy Regionalne, a regional rail passenger operator (EIB loan EUR46 million, total cost EUR107 million)
The EIB President observed that financial recovery was still slow and the year 2017 must see a real stepping up of reform to ensure that investment is not being held back by unnecessary regulatory bottlenecks. There was a significant shift in the kind of financing the EIB Group provided in the year 2016 with an increase in the share of smaller loans, which go mostly to innovative smaller businesses.