EIB Group activities in EU cohesion regions 2023

In 2023, the EIB Group provided €36.2 billion to finance projects in cohesion regions. Of this, EIB lending amounted to €29.8 billion (45.1% of total EU lending), well above its target for 2023. Importantly, lending to less developed regions, at €13.2 billion, was 24% of total EIB lending in the European Union, above the key performance indicator set for 2023 (21%). Across the European Union, EIB lending supported projects with a total investment cost of €235 billion in 2023.

EIF commitments to credit guarantees, venture capital and private equity investments for cohesion regions in 2023 stood at €6.8 billion, representing 48% of total EIF commitments in the EU-27, well in excess of the key performance indicator established the year before.

Lending in cohesion regions covers a wide spectrum of economic activities, which are reflected in the EIB’s public policy goal framework. The framework embodies the Bank’s lending priorities and ensures that these are aligned with the political priorities set by the European Union.

The current framework relies on four vertical public policy goals: sustainable cities and regions; sustainable energy and natural resources; innovation, digital and human capital; and SME and mid-cap finance. These broad goals are further broken down into economic sectors and activities eligible for EIB financing. In addition, two horizontal objectives are embedded in the framework: economic and social cohesion; and climate action and environmental sustainability. Trending up since 2021, the EIB’s cohesion lending reached its highest level in the Bank’s 65-year history in 2023, with demand for SME and mid-cap finance increasing particularly vigorously.

The chart below shows the contribution of lending under each public policy goal to the EIB’s overall lending in cohesion regions and contrasts this with the goals’ respective shares in total lending to non-cohesion regions.*

*The contribution towards each of the Bank’s public policy goals (including cohesion and climate action and environmental sustainability) is established at the level of the overall project to be financed. For the purpose of this analysis, in the case of projects falling only partially under the Bank’s cohesion objective, it is assumed that the project’s cohesion component makes the same relative contribution to each of the vertical public policy goals as the overall project.

The relative concentrations of the EIB’s cohesion lending in its individual public policy goals are related to the sectors of activity that are financed in cohesion regions. This chart shows the breakdown of the EIB’s EU lending in 2023 by sector, distinguishing between cohesion and non-cohesion regions.

Of the European Union’s 145 cohesion regions, 67 are classified as transition regions and 78 as less developed regions. The latter are mostly located in Central and Eastern Europe, as well as in Portugal, Greece and the southern parts of Italy and Spain. Many of the transition regions, by contrast, are former wealthy industrial regions struggling to cope with globalisation and technological change. They can be found across the European Union, including in wealthier Member States such as France, the Netherlands and Finland. On the positive side, the group of transition regions also includes a number of formerly less developed regions such as in Estonia and in Czechia and in Poland, whose economies have grown significantly faster than the EU average over the past two decades.

Addressing economic and social convergence across the European Union lies at the very heart of the European Investment Bank Group’s mission.

Cohesion policy is unique as it provides a European framework together with support for specific projects that have a direct impact on economic, social and territorial development and bring tangible benefits to individuals, businesses and local communities. To Europeans it is the most visible face of EU solidarity.

For all these reasons, cohesion remains one of our strategic priorities for the future. People will only come or stay in their city or region if they have affordable housing, and good access to education, healthcare and employment. Without these, regions risk losing skills, talents and people. Without people, regions cannot thrive. Without thriving regions, EU cohesion is at risk and Europe’s competitiveness is undermined.

Targeted social investments are key to unlocking regional labour potential. The creation and retainment of quality jobs requires an efficient allocation of labour and skills, increasing labour force participation, and more generally, growth of talent in both cohesion and non-cohesion regions. However, existing structural weaknesses, such as a lack of affordable and social housing, energy inefficiencies, insufficient digital connectivity and limited accessibility to essential services, hamper people’s mobility and affect their equality of opportunities.

Recognising this, in the three years from 2021 to 2023, the territorial distribution of EIB investments in social infrastructure was in line with overall EIB lending in the European Union, with 44% in EIB cohesion regions and 56% in more developed regions. These data confirm evidence of a stronger demand for social infrastructure from regions with more favourable demographic trends.