Every year, the EIB dedicates 20-30% of its lending to build resilient cities for future generations, construct social and affordable housing and provide sustainable urban services.
While providing critical services to citizens, cities have also been on the front line of the COVID-19 crisis. They now need to focus on combining a sustainable economic recovery with a green recovery.
Key areas
The EIB contributes to the UN Sustainable Development Goal 11 and the Urban Agenda for the EU. Our approach aims to build more sustainable communities by focusing on five key dimensions:
Urban regeneration
Renew worn-out infrastructure and connect infrastructure with services.
Social inclusion
Encourage cities to act and invest in ways that enable everybody to participate in urban society, regardless of income, age, gender, or ethnicity.
Green and climate-smart cities
Support the set-up and implementation of climate adaptation or low-carbon strategies.
Innovation and productive cities
Help cities to take advantage of innovation and new technologies.
Cities and the circular economy
Identify and implement innovative ways to make, use, reuse and recover materials, products and energy while reducing our impact on the environment.
Main priorities
We finance projects in the following priority areas:
Urban regeneration revitalises cities by transforming their social, economic, cultural and environmental functions.
Our integrated approach looks at the interactions between investments. This allows us to cover multi-sector citywide investment programmes that focus on:
- implementing suitable urban development strategies and land-use plans
- specific area-based urban regeneration schemes
- public buildings with cultural or administrative functions
- certain types of property development that contribute to integrated urban regeneration
Sustainable urban mobility is a major focus of EIB urban lending. Our support focuses on:
- upgrading and expanding urban public transport
- replacing vehicle fleets with electric or other green fuel vehicles
- investments in charging infrastructure
The EIB is active in promoting social and affordable housing. Our support covers the retrofitting of existing housing and the construction of new social and affordable accommodation. Our offer ranges from housing schemes in small towns and rural areas with demographic challenges to development projects in large cities with very severe housing shortages.
We concentrate on:
- increasing the supply of social and affordable housing to tackle market supply constraints and affordability issues
- improving energy efficiency, accessibility and the overall quality of social and affordable housing
- enhancing social inclusion and promoting diverse neighbourhoods
Investment in education and training is essential to promote growth, competitiveness and inclusion. Our support includes the upgrade of education-related infrastructure to meet climate resilient and pedagogical needs, but also investments to equip and enhance teachers’ skills, such as digital and pedagogical competences.
The most common city-supported investments are:
- primary and secondary schools
- higher education and vocational training
- adult teaching centres
Our support for the health sector is aligned with the EU’s strategic priorities and aims to improve health outcomes, welfare and economic gains.
The EIB can support projects in the below sectors:
- health infrastructure
- innovation in health
- medical research
- medical education and training
- integrated and community care
- health informatics/eHealth
Solid waste management
The EIB lending policy in the solid waste sector contributes to the implementation of EU policy. Our investment concerns solid waste projects for the:
- separate collection of recyclable materials and bio-waste and facilities for treatment of such waste streams, including composting, anaerobic digestion and material recovery facilities
- treatment of the residual waste that remains after upstream recycling, such as mechanical biological treatment plants and incineration plants with energy recovery
- closure and rehabilitation of old landfills and, outside the European Union, the construction of new engineered landfills
Water and wastewater management
The EIB water sector lending orientation sets out how the EIB supports EU policy objectives in the water sector. The EIB supports investment to:
- increase secure access to water resources
- protect against destructive water-related events
- ensure reliable provision of sustainable and affordable water and wastewater-related services both in quantity and quality to all stakeholders
- promote the increase in energy efficiency measures and recovery mechanisms.
The EIB recognises the critical importance of public buildings to support sound public administration, enable provision of municipal services and contribute to education, culture and local economy.
Such investments include the:
- renovation or construction of public administrative buildings, such as law courts, community centres, municipal administration buildings
- renovation or construction of cultural buildings and infrastructure, such as theatres, concert halls, museums, monuments, heritage trails and their associated public realm
Digitalisation is a key priority area for the European Commission and the EIB recognises the importance of digital transformation. The digital economy sector is key for smart and productive cities and regions.
Such investments include:
- Better access to ultrafast broadband connectivity, mobile networks and relevant infrastructure to support digitalisation of city processes and digital services
- Projects that help the introduction and deployment of digital solutions, technologies, platforms and services in the functioning of the urban economy (for example, through innovation districts) and digital public services (including education, healthcare, culture and public administration/services).
- Projects that improve the integration of digital technology, adopt emerging technologies, improve cybersecurity or contribute to climate, environmental sustainability and the green transition.
Financing approach and advisory support
The EIB has had an important role in urban investment over the past twenty years. As the EU climate bank, we welcome the European Green Deal and will contribute significantly to its implementation. Urban and regional investment will play a key role in this.
Within the EU, the EIB uses its full range of instruments in the urban sector. The Bank has established direct relationships with many cities through several instruments, such as:
- urban, sector-specific and regional framework loans
- public sector multi-beneficiary intermediated loans (MBIL)
- structural programme loans
We finance urban investment with a wide range of risk profiles, through:
- national urban facilities
- direct municipal lending with loans to municipal utilities and companies
- private companies providing municipal services
- special purpose enterprises with different capital structures
The EIB also contributes to urban project preparation, knowledge creation and innovation. Our project teams provide advisory services during project preparation, due diligence and implementation.
The specific instruments available are:
The City Climate Finance Gap Fund
The Gap Fund paves the way for cities to deliver ambitious infrastructure development for low-carbon, resilient and livable cities. It provides technical assistance for early-stage planning and project preparation. It unlocks a pipeline of financially viable urban investments that contribute to local transformation, global climate goals and green recovery.
The Gap Fund was announced at the United Nations Climate Action Summit 2019 and was launched in September 2020. It has already approved technical assistance for 33 cities, transforming climate ambitions into finance-ready projects. It is funded by Germany and Luxembourg and implemented by the European Investment Bank and the World Bank.
Recovering frontlines
Cities and towns are important pillars of EU plans to address climate change and digitalisation with COVID-19 funds. Our European municipality study looks at where investment is needed most.
Browse our projects
Case studies
Real stories speak louder than general policies. Discover the impact of our projects.