Physical project
monitoring
The EIB monitors the implementation, completion and early operation of all the projects and programmes it finances. The only exception is lending via MBILs. The monitoring of the small projects these loans support is delegated to the financial intermediary, which is expected to have a close relationship with its final beneficiaries.
Physical project monitoring is an integral part of the EIB project cycle, and offers the Bank the possibility of identifying emerging or potential problems, and mitigating project-related risks, as early as possible. The objective is to ensure that each project financed is successfully implemented and operated in accordance with the Bank’s high standards, as agreed with the client during the appraisal of the project, and as defined in the finance contract.
The monitoring also contributes to a broader project management process: maintaining and developing the Bank’s expertise, and so adding value to its financial services. Every project monitored gives the Bank an opportunity to develop its processes, and the knowledge accumulated gives the EIB a better understanding not only of project risks, but also of project merits. This has helped ensure the long-term success of the Bank’s financial operations and, by extension, its clients.
The actual level of monitoring is adapted to the needs of the individual project and is influenced by such factors as promoter[1] experience, project complexity, specific loan conditions and location. However, these aspects can vary throughout the life of the project due, for example, to positive or negative external factors, servicing of the loan, the questionable use of funds and other project- or promoter-specific developments. Every project completed in 2017 has been monitored from the start of implementation through to completion and early operation by an expert in the appropriate economic sector. The expert checks regularly that the project is developing as planned, and carries out a final assessment to ensure that it has been completed in accordance with the finance contract, with a further check on its operation three years later. This means that the Bank can take prompt action if significant deviations emerge as compared to the description and conditions laid out in the finance contract.
[1] The EIB uses the term “promoter” to identify the organisation responsible for the development, implementation and operation of the project. The promoter may or may not be the borrower.
