EIB Board of Governors’ meeting - Focus on a reinforced EIB contribution for clean energy

The Board of Governors of the European Investment Bank – the Finance Ministers of the 27 EU Member States – today held its annual meeting in Luxembourg. President Maystadt reported on key developments in the Bank’s activity in 2006 and the main areas of strategic progress, also proposing to the Board a detailed programme to reinforce the EIB’s contribution to EU energy and climate change policy.

“Clean energy for Europe”: endorsement of measures for a reinforced EIB contribution

The EIB has made “sustainable, competitive and secure energy” one of its priority objectives in its Corporate Operational Plan for 2007-2009. In 2006, the EIB financed projects within the EU in the energy sector with EUR 3 billion in loans, of which EUR 456 million for investment in renewable energy. The targets set for 2007 within the EU have been raised to EUR 4 billion of loans for investment in the energy sector, of which some EUR 600-800 million should be for renewables.

Energy and Climate Change issues have received high attention from the Bank. Following the adoption by the European Council in March of the “Action Plan for EU energy policy 2007-2009” and the adoption of new targets in the areas of renewable energy (RE), energy efficiency (EE) and greenhouse gas emissions reduction, the EIB has defined specific measures – endorsed today by the Board of Governors – to further reinforce its contribution in these key areas.

These measures include:

further increase in lending for renewable energy; the targets for lending in this sector (EUR 600-800 million per year) are now considered as minimum figures;
increasing the share of EIB financing to 75% of total costs for renewable energy projects, in particular “emerging renewable energy technologies” and investments contributing significantly to energy efficiency;
updating the selection criteria for RE technologies;
developing financial instruments including framework facilities for smaller-scale investments and using structured finance and investment funds;
introducing a systematic review of energy efficiency issues when assessing projects to be supported by the Bank.

In addition, the Governors have endorsed a set of screening criteria for the financing of coal/lignite power stations, in order to ensure that any use of carbon-intensive fuels in EIB-supported projects is still compatible with the overall targets for greenhouse gas emissions.

In the framework of the same proposal and in order to further support energy projects in Neighbourhood Countries, ACP, South Africa and ALA, the Governors approved the establishment of a dedicated EUR 3 billion facility from EIB own resources. This will be available until the end of 2013.

For detailed information, see the annex “Press Briefing Note on the EIB’s reinforced contribution to EU Energy Policy” and the EIB sub-site: www.eib.org/energy.

RSFF: a new EUR 2 billion instrument to leverage financing for research and innovation

President Maystadt announced the launch of RSFF – a new “Risk Sharing Finance Facility”. He actually signed that day the RSFF “cooperation agreement” between the Bank and the European Commission with Commissioner Potocnik.

This new instrument is designed to finance the higher risk investment needs of innovative companies, which are key drivers of European competitiveness and which often face difficulties securing sufficient and attractive financial resources. President Maystadt declared: “RSFF represents the result of a joint vision and a common effort of the EC and the EIB to develop new financial instruments”. He stressed that “the 1 billion from the EIB’s own resources and the 1 billion from the EU’s 7^th Research Framework Programme, utilised to cover the financial risks of projects, will unlock some 10 billion of additional financing for RDI, including for research in the field of clean energy”. (See press release on RSFF launch on 5 June 2007.

Borowing/lending operations and key financial figures

2006 was marked by an increase in the profit for the financial year and stability in the balance sheet total. Due to a special item – the reversal of the Fund for general banking risks amounting to EUR 975 million – the profit for the financial year 2006 stands at EUR 2.566 billion.

However, deducting this special item, the profit for 2006 amounts to EUR 1 591 million, an increase of EUR 202 million or 15% as compared with the profit for the financial year 2005.

On the borrowing side – to fund its lending – in 2006 the EIB raised an aggregate amount of EUR 48 billion on the international capital markets through more than 300 bond issues in 24 currencies.

This same year, lending totalled EUR 45.8 billion for projects promoting the European Union’s policy objectives (405 investment projects). Finance for the then EU-25 Member States accounted for 87% of activity and amounted to EUR 39.8 billion.

EIB lending to support Enlargement amounted to EUR 3.2 billion in 2006, or 7% of total financing, while EIB backing for EU Development Aid and Cooperation policies ran to EUR 2.7 billion in 2006 (representing 6%). Half of this activity was mounted under the Facility for Euro-Mediterranean Investment and Partnership (FEMIP) and over one quarter was directed to ACP countries under the Cotonou Investment Facility.

With the new EIB External Lending Mandate for 2007-2013 and a new protocol for the ACP countries to be introduced in 2008, the EIB has been confirmed as the Bank of the European Union, driven by the policies of the EU and called on to implement those policies in collaboration with the European Commission and other IFIs.

For complete information, please refer to the 2006 EIB Annual Reports (Activity Report – Statistical Report – Financial Report), available on request from the EIB Infodesk or downloadable from www.eib.org/publications).

Contact

Sabine Parisse

s.parisse@eib.org
+352 4379 - 83340

Reference

2007-049-EN

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