EIB approves EUR 7 billion of new loans and launches discussion on extending Investment Plan for Europe

23/09/2016
EIB approves EUR 7 billion of new loans and launches discussion on extending Investment Plan for Europe

Meeting in the Maltese capital of Valetta, the Board of Directors of the European Investment Bank approved more than EUR 7.3 billion of new loans for investment in strategic infrastructure, the environmental and knowledge economy as well as private sector schemes across Europe and around the world, including ground breaking new projects in Malta. 18 of these loans, worth EUR 2.8 billion will be backed by the European Fund for Strategic Investments.

Plans to extend the European Fund for Strategic Investments at the heart of the Investment Plan for Europe until 2020, proposed by the European Commission, were discussed for the first time and endorsed in principle by the Board of the European Investment Bank.

In the margin of the EIB Board meeting the European Investment Fund (EIF) also signed the first investment in Malta backed by the EU budget guarantee under the European Fund for Strategic Investments.

New investment for social housing and private sector - and Malta’s first EFSI project under Investment Plan for Europe

During the two day meeting, the EIB also approved EUR 40 million of new support for social housing and private sector investment in Malta. Following the EIB Board meeting, President Hoyer and Professor Edward Scicluna, Malta’s Minister for Finance, signed the first EIB loan to the Maltese Authorities for the co-financing of Malta’s Operational Programmes for the European Regional Development Fund, the European Social Fund and the Cohesion Fund for the 2014 – 2020 programming period.

The signature will pave the way for support by the European Investment Fund, the European Investment Bank Group’s SME focused subsidiary, for small business lending by local banks acting as intermediaries. One of these two SME lending programmes is backed by the EU Budget guarantee under the Investment Plan for Europe. This means EFSI now supports projects in 27 EU member states.

“The EIB and EIF have supported crucial investment in Malta for nearly forty years. This includes strengthening air and maritime connections, upgrading telecom and energy infrastructure, ensuring clean water supply and effective water treatment and helping Maltese companies to expand. This visit provides an opportunity to build on the strong relationship between Malta and the European Investment Bank Group. I welcome EIB’s first support for social housing investment in our country and welcome the first lending with a local bank to support investment by local companies, said Minister Scicluna.

Malta also sees its first investment backed by the European Fund for Strategic Investments launched this week.

The European Investment Bank is the world’s largest multilateral public bank and the board meeting included representatives of the bank’s 28 EU member state shareholders, as well as the European Commission. The board of the Luxembourg-headquartered European Investment Bank is convened once a year in the country that will next take the European Union’s rotating presidency. Malta will hold the presidency from January to June 2017.

“The diverse new projects discussed, approved and signed here in Valetta this week reflect the EU Bank’s engagement supporting key investment across Europe and around the world. I want to warmly thank the Maltese people and government for the kind welcome they extended to the European Investment Bank and European Investment Fund board members this week and on many previous memorable occasions.” added EIB President Werner Hoyer.

Extending EFSI, Building on success

The EIB Board approved the principle of extending the duration of EFSI beyond the previous three-year horizon, as proposed by the European Commission on 13 September; This could entail an increase in the bank’s guarantee that will accompany an increase in the EU Budget guarantee and enable an extension of EFSI-backed financing by both the European Investment Bank and European Investment Fund. The amount of the EIB Group’s support and the precise form of the extended Investment Plan will be discussed in the coming months as the European Commission’s proposal undergoes the normal legislative process involving the Council of Ministers and the European Parliament.

The European Fund for Strategic Investments, one of the three pillars of the EU’s Investment Plan for Europe that currently aims to unlock EUR 315 billion of new investment, is part of the EIB Group. Other pillars are the European Investment Advisory Hub, also run by the EIB Group, and the EU’s drive to modernise and adapt EU regulation to facilitate investment.

Earlier this month, the European Commission presented its proposal to extend the European Fund for Strategic Investments beyond 2018. This will now be examined by the EU Council of Ministers and European Parliament before final details are agreed.

Speaking from Malta, Werner Hoyer, President of the European Investment Bank said,“The Investment Plan for Europe is working well. But the job is far from completed.  We will work with the Commission, Parliament and Council over the coming months to ensure that extended EFSI backed financing can continue as long as it takes to get investment going again in Europe.”

Beyond Europe’s borders, supporting EU external action through Resilience Initiative 

The Board discussed the EIB’s new Economic Resilience Initiative for North Africa, the Middle East and Western Balkans. The initiative, endorsed by EU leaders in June, is now seeking more concessional financing from member states. Increasing engagement outside Europe under the EU’s proposed External Investment Plan and the important role to be played by the EIB was a key focus of this week’s meeting. Following President Hoyer’s speech at the United Nations’ Summit for Refugees and Migrants lending in countries most impacted by the refugee crisis was high on the agenda.

President Hoyer said, “The EIB, as the EU Bank is committed to helping those affected by forced migration and to help build more resilient economies that tackle its root causes. Our Economic Resilience Initiative for the Southern Neighbourhood and Western Balkans, will have a particular focus on young people and women, with increased investment in socially important sectors like water, health and education – and crucially a significant stepping-up of support for entrepreneurship and the private sector, to create opportunities for refugees and local communities alike. This is a very concrete measure fully complementary with the External Investment Plan proposed by the European Commission.”

Under this initiative, the EIB will increase its support to the Southern Neighbourhood, which includes countries in the Middle East and North Africa as well as the Western Balkans. The initiative will mean additional investments of EUR 6 billion, on top of the EUR 7.5 billion of EIB financing already planned for these two regions, the largest of any international financial institution. 

The EIB estimates the initiative will trigger EUR 15 billion euros of additional investment in these regions up to 2020, taking the total EIB mobilisation of investment in the regions to some EUR 35 billion.

EUR 7.3 billion approved for 47 new projects: EUR 2.8 billion under EFSI

New financing totalling EUR 7.3 was approved by the board of directors - including EUR 1.3 billion to support new investment outside the European Union. EUR 2.8 billion of the new EIB financing will be backed by the European Fund for Strategic Investments initiative.

New support for strategic infrastructure totalling EUR 2.2billion included backing for upgrading road links in Lithuania and Poland, new passenger trains for use in the UK, Belgium, Germany and the Ukraine and new schools across Ireland.

Following approval of the EIB Board more than EUR 1.3 billion of new EIB lending for resource efficiency and climate related investment is expected to support new windfarms in Belgium and Greece, small hydropower plants in Italy, and construction of new zero energy buildings across Finland.

Reflecting the EIB Group’s strong engagement to support private sector investment new lending programmes with local banks and financial institutions in Austria, Denmark, Finland, Sweden, Germany, France, Spain, Portugal, Slovenia and Croatia, as well as Malta, were approved.

Green light for 18 projects under the Investment Plan for Europe:

This week’s EIB board meeting follows a meeting of the EFSI Investment Committee, held on 20th September. It approved 18 projects which the Investment Committee had cleared for financing under the Investment Plan for Europe guarantee from the EU Budget.

Negotiations for the approved loans are expected to be finalised in the coming months. All projects, including those earmarked for support under the EU budget guarantee, need to receive approval of the EIB Board prior to loan contracts being finalised. Loans and guarantees approved by the Board of Directors will be finalised in cooperation with promoters and beneficiaries, and figures may vary.

Overview of projects approved by the EIB Board

Overview of projects approved by the EIB Board of Directors following positive assessment by the EFSI Investment Committee

 

More information: www.eib.org