EPRS Admin By / February 17, 2021

Annual evolution of EIB lending volumes

Annual evolution of EIB lending volumes in the ELM regions

Annual evolution of EIB lending volumes in the ELM regions

For over 60 years, the EIB has been the EU’s finance arm and the world’s largest multilateral borrower and lender. Its financial capacity and technical know-how allow it to complement the EU’s development efforts (under Article 209 TFEU), and to support the achievement of the SDGs worldwide by mobilising financing for projects in a number of priority areas (such as climate change mitigation, infrastructure, SMEs job creation). It mainly operates within the EU, but about 10 % of its operations are external, for a large part of which it operates under a mandate from the EU, relying on an EU guarantee. The Board of Governors, the decision-making body, is made up of EU Member States’ representatives and decides on EIB’s external actions. EIB loans can be combined both with loans from other banks and EU grants. The EIB works with public and private sector entities and contributes up to 50 % of a project’s cost. Its 2019 financial report notes that over a period of 50 years, the EIB has granted €64.8 billion worth of loans in 106 different countries as of end-2019. The bulk of non-EU activities are covered by guarantees from the EU ELM or the EU’s Member States (through the ACP Investment Facility under the Cotonou Agreement). The volume of own-risk investments pursued outside the EU is limited. The EIB is also one of the implementing partners for the new EU guarantee offered through the EFSD.
Since 1977, the EU has provided large-scale budgetary guarantees to the EIB through the external lending mandate (ELM). Its legal basis is Decision No 466/2014/EU, amended in 2018 in the context of the mid-term review and following the migration/refugee crisis. The ELM covers 68 countries and territories in four regions (pre-accession countries; the Southern and the Eastern Neighbourhood; Asia, Central Asia and Latin America; and South Africa), with guarantee ceilings for the various (sub) regions. In its (latest) 2020 report, the Commission explains that the ELM is based on a guarantee from the EU budget that enables the EIB to increase its lending outside the EU in support of EU policies targeting riskier environments, while at the same time maintaining its AAA credit rating. The EU guarantee covers defined instances when borrowers fail to repay financing owed to the EIB. In case the EIB calls on the EU guarantee, payments are made from the Guarantee Fund for External Actions.
In response to the refugee crisis, in 2016, the EIB launched the Economic Resilience Initiative (ERI) to contribute by addressing the root causes of migration. For the additional objective of long-term economic resilience in the ELM Decision, €1.4 billion was earmarked for public-sector investments addressing the needs of refugees and host communities, and a specific ‘ERI Private Mandate’ of €2.3 billion was created to guarantee private-sector investments supporting long-term economic resilience. Since the amendment of the ELM Decision, the EU budget guaranteed up to €32.3 billion (previously up to 27 billion) of EIB operations for 2014-2020, with a commitment to cover the first 65 % of losses that may arise in the guaranteed portfolio.

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