Following a recent meeting in Malta, the Board of Directors of the European Investment Bank (EIB) approved more than EUR 7.3 billion of new loans. These span not only investment in strategic infrastructure, the environmental and knowledge economy but also loans for private sector schemes across Europe and around the world. The EIB Board also endorsed in principle plans to extend the European Fund for Strategic Investment (EFSI) until 2020.
The EIB is the world’s largest multilateral public bank and it has played a major role in providing affordable finance to large-scale infrastructure, energy, social housing and education projects. From 2011 to 2015 the EIB loaned the UK EUR 29.1 billion of which EUR 8.1 billion went to the energy sector; EUR 7.1 billion to the transport and telecommunications sector, and EUR 7.2 billion to water, sewerage, solid waste and urban development sector.
The latest EUR 7.3 billion has been earmarked to support 47 new projects with 18 loans, worth EUR 2.8 billion, being supported by the EFSI. EFSI is one of the three pillars of the EIB’s investment plan for Europe which aims to revive investment in strategic European projects; it represents a EUR 16 billion guarantee from the EU budget which is complemented by a EUR 5 billion allocation of the EIB’s own capital. Projects supported by EFSI are subject to the usual EIB processes but EFSI also has its own governance structure, designed to address the market failure in risk-taking which adversely affects investment in Europe and thus bring higher-risk projects within the scope of EIB funding (see www.eib.org/efsi/what-is-efsi/index).
Of the EUR 7.3 billion funding, EUR 2.2 billion will provide support for strategic infrastructure including backing for new passenger trains for use in the UK and also new schools across Ireland. Investment in UK research and development of solutions to expand the reuse of treated wastewater has also been approved.
Inevitably final figures will vary, however, it is expected that the loans and guarantees will be approved and finalised by the EIB Board over the next few months. At a time when the UK waits anxiously to see if its membership of the EIB continues post-Brexit, the fact that the EIB has included projects in the UK in its latest list of approved projects set to receive finance must surely be regarded as a positive for the future.