Board of Governors Endorsement of the Bank's Amsterdam special action programme (ASAP) Decision of 20 August 1997
Date: 1997-08-20
Institutions: European Investment Bank
Subjects: EU growth strategy, European Investment Bank, European Investment Fund, financial management

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EUROPEAN  INVESTMENT  BANK

BOARD  OF  GOVERNORS

Endorsement  of  the  Bank’s  Amsterdam  special  action  programme  (ASAP)

Decision  of  20  August  1997

(98/C  10/12)

THE  BOARD  OF  GOVERNORS  OF  THE  EUROPEAN
INVESTMENT  BANK,

categories  of  SME,  can  be  appropriate  ways  of
complemeting  the  Bank’s  customary  activity  and  of
contributing  to  the  objectives  of  the  resolution;

for 

impulse 

"a  new 

(i)(cid:217)Taking  note  of  the  European  Council’s  resolution
of  16  June  1997  on  growth  and  employment,
which  calls 
for  keeping
employment  firmly  at  the  top  of  the  political
agenda  of  the  Union 
improving
European  competitiveness  as  a  prerequisite  for
growth  and  employment’  and  urges  the  Bank  "to
step  up 
in  this  respect,  promoting
investment  projects  consistent  with  sound  banking
principles  and  practices’;

.(cid:216).(cid:216).  [and(cid:129)  for 

its  activities 

(v)(cid:217)In  view  of  the  fact  that  the  Bank  has  accumulated
additional  reserves  as  well  as  a  surplus  remaining
unallocated;

(vi)(cid:217)Estimating 

that 

these 

exceed 

resources 

the
minimum  statutory  requirements  as  well  as  what
can  be  deemed  necessary  to  support  the  Bank’s
regular 
including  capital  needs
associated  with  projected  growth  in  the  short  and
medium  term;

lending  activity, 

(ii)(cid:217)Noting  in  particular  that  the  resolution  urges  the

EIB:

-(cid:217)to  examine  its  scope  of  intervention  in  the  areas
of  education,  health,  urban  environment  and
environmental  protection,

(vii)(cid:217)Deeming  it  appropriate  for  a  portion  of  such  excess
resources  to  be  used  to  extend  the  forms  of  the
Bank’s  financing,  provided  this  is  compatible  with
the  Bank’s  mission;

-(cid:217)to  step  up  its  interventions  in  the  area  of  large
infrastructure  networks  by  examining  the  possi(cid:220)
bility 
loans
primarily  for  the  large  priority  projects  adopted
in  Essen,

very(cid:220)long(cid:220)term 

granting 

of 

-(cid:217)to  examine  the  establishment  of  a  facility  for
the  financing  of  high  technology  projects  of
small  and  medium(cid:220)sized  enterprises  in  coop(cid:220)
eration  with  the  EIF,  possibly  making  use  of
venture  capital  operations  with  involvement  of
the  private  banking  sector,

(viii)(cid:217)Considering 

that 

the  above(cid:220)mentioned  use  of
excess  resources  should  not  prejudice  the  possi(cid:220)
bility  to  finance  a  forthcoming  capital  increase,  the
details  of  which  remain  to  be  decided,  from  the
Bank’s  own  funds,  nor  should  it  prejudice  any
other  decisions  or  initiatives  concerning  a  transfer
of  such  resources  for  other  purposes,  including  to
shareholders,  provided  that  this  is  in  compatibility
with  the  Bank’s  statutory  framework;

(ix) Appreciation  that  the  EIF  could  pay  an  important
role  with  Bank  in  the  financing  of  such  projects,

HEREBY  DECIDES:

(iii)(cid:217)Mindful  that  these  requests  imply  consideration  by
the  Bank  of  new  kinds  of  financing  modalities,  to
be  implemented  in  compatibility  with  its  statutory
framework;

1.(cid:217)to  endorse  the  European  Council’s  resolution  on
growth  and  employment  in  so  far  as  it  applies  to  the
Bank  and  to  respond  with  appropriate  measures;

(iv)(cid:217)Taking 

that  while 

into  account 

risk  capital
involving
investments,  or 
particular  risks,  are  not  among  the  Bank’s  statutory
activities, 
including  operations
aiming  at  the  provision  of  risk  capital  for  certain

instruments 

facilities, 

lending 

such 

2.(cid:217)to  request  the  Board  of  Directors  to  formulate,  with
its  statutory  competence,  the  type  and  scope  of
measures  to  be  taken  by  the  Bank,  over  the  period
1997  to  2000,  for  the  purpose  of  implementing  the
resolution,  in  accordance  with  the  guiding  principles
set  out  in  the  Annex;

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3.(cid:217)that  these  measures  may  include  the  extension  of  the
Bank’s  intervention  in  the  areas  of  education,  health,
urban  environment  and  environmental  protection;  the
stepping  up  of  its  interventions  in  the  area  of  large
infrastructure  networks  as  well  as  SME  financing;

4.(cid:217)that  these  measures  may  further  include  a  possible
increase  in  the  ceiling  of  EIB  loan  financing  up  to
75(cid:216)%  of  project  cost,  on  an  exceptional,  case(cid:220)by(cid:220)case
basis,  where  this  is  deemed  appropriate  by  the  Board
of  Directors,  in  order  to  pursue  the  objectives  set  out
in  the  resolution,  as  well  as  an  extension,  in  line  with
the  said  objectives,  of  the  eligibility  criteria  to  be
applied  by  the  Bank;

5.(cid:217)that, 

in 

the 

that 

implementing 

framework  of 

the
resolution,  part  of  the  Bank’s  annual  surplus,  to  the
extent 
the  statutory
these  resources  exceed 
requirements  for  reserves,  may  be  used  to  facilitate
the  financing  of  sound  projects,  in  the  interests  of  the
Community,  through  instruments  extending  the  scope
of  the  Bank’s  financing,  including  but  not  limited  to
facilities  for  the  provision  of  risk  capital  to  certain

suitable 

through 

inter(cid:220)
categories  of  enterprises 
mediaries  with 
the  necessary  qualifications  and
expertise,  excluding  any  subsidies.  The  first  allocation
for  these  purposes  from  the  1996  surplus  shall  be
ECU  200  million.  The  amount  of  subsequent  allo(cid:220)
cations,  from  any  surplus  arising  in  1997  to  1999  shall
be  determined  annually  by  the  Board  of  Governors,
on  a  proposal  from  the  Board  of  Directors,  in  the
context  of  the  approval  of  the  Bank’s  balance  sheet
and  profit(cid:220)and(cid:220)loss  account.  An  overall  amount  of  up
to  ECU  1(cid:216)000  million  is  set  for  the  period  ending  in
the  year  2000;

6.(cid:217)that  the  Board  of  Directors  shall,  on  the  basis  of
proposals  from  the  Management  Committee,  approve
the  modalities  for  the  measures  referred  to  in  point  5
as  well  as  individual  operations  in  accordance  with
the  Bank’s  normal  procedures.

7.(cid:217)that  the  Board  of  Directors  shall  provide  it  with
the
the 

implementation  of 

reports  on 

annual 
foregoing  measures.

ANNEX (˛)

Outline  of  Amsterdam  special  action  programme  (ASAP)  approved  by  the  Board  of  Directors  at  its  meeting
on  21  July  1997

1.

In  answer  to  the  resolution  on  growth  and  employment  decided  by  the  European  Council  of
Amsterdam  (16  and  17  June  1997),  the  Management  Committee  has  proposed  to  the  Board  of
Directors,  in  its  meeting  of  21  July  1997,  to  launch  a  special  initiative,  called  the  Amsterdam  special
action  programme  (ASAP).

The  corresponding  guidelines  are  intended  to  provide  an  appropriate  framework  to  rapidly  initiate
operations  consistent  with  the  objectives  of  the  resolution  and  develop  them  over  time.

2. The  main  guiding  principles  retained  for  the  definition  of  ASAP  are  as  follows:

-(cid:217)the  respect  for  sound  banking  principles  and  practices,

-(cid:217)the  necessity  to  devise  simple,  realistic  and  practical  measures,

-(cid:217)the  need  for  a  rapid  definition  of  first  operations  while  recognizing  the  need  for  sustained  devel(cid:220)

opment  efforts  spanning  over  time,  in  particular  when  innovative  features  are  concerned,

-(cid:217)the  need  to  add  value  to  activities  and  measures  undertaken  in  the  Member  States  and  by  financial

institutions  operating  in  the  relevant  capital  markets,

-(cid:217)the  usefulness  of  cooperating  with  the  financial  community,  and  its  widening  and  reinforcement,  as

a  critical  factor  for  the  success  of  ASAP,

(˛)(cid:217)Integral  part  of  the  Decision.

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-(cid:217)the  importance  of  encouraging  public  private  partnerships  and  the  need  to  avoid  crowding  out  of

private  sector  or  other  sources  of  finance,

-(cid:217)the  desirability  of  establishing  clear  objectives  for  each  element  of  the  programme,  with  provision

for  evaluation  of  results,

-(cid:217)the  crucial  importance  of  partnership  with  and  support  from  the  Member  States  for  a  smooth

implementation  of  the  initiative.

3. ASAP  prolongs  previous  initiatives  launched  by  the  Council  and  based  on  the  inter(cid:220)relationship
between  investment,  growth  and  employment,  with  specific  implementation  tasks  attributed  to  the
Bank.  The  Amsterdam  resolution  confirms  and  widens  this  approach.  New  features  are:  the  focus  on  a
wider  notion  of  capital,  the  importance  of  small  and  medium(cid:220)sized  projects  (whether  SMEs  or  infra(cid:220)
structure),  the  invitation  to  introduce  some  financial  innovation,  and  the  necessity  to  combine
short(cid:220)term  effects  with  medium  and  long(cid:220)term  sustainable  impacts.

In  view  of  these,  the  following  general  mesures  look  appropriate:

-(cid:217)to  set  the  horizon  of  ASAP  at  end  2000,  with  appropriate  reviews  by  the  Boards  of  the  Bank  and
the  Council.  This  would  allow  actions  to  be  engaged  immediately  and  be  developed  over  a
significant  period,

-(cid:217)during  this  period,  to  allow  for  a  possible  increase  in  the  financing  of  the  Bank  to  up  to  75(cid:216)%  of
the  investment  cost,  for  lending  to  TENs  and  related  infrastructure  projects,  as  well  as  environ(cid:220)
mental  projects.  This  possibility  will  be  used  on  an  exceptional,  case(cid:220)by(cid:220)case  basis,  when  it  can  be
demonstrated  that  it  has  a  beneficial  impact  on  project  implementation,

-(cid:217)to  make  a  number  of  adaptations  to  the  Bank’s  existing  products  for  example  in  terms  of  flexibility
for  small  and  medium(cid:220)sized  projects,  or  of  maturities  and  grace  periods  for  large  infrastructure
projects,

-(cid:217)to  introduce  new  EIB  products  for  innovative  SMEs,  with  the  creation  of  a  special  window,  using
resources  derived  from  the  annual  surplus  of  the  Bank,  to  provide  support  for  different  types  of
new  instruments,  including  venture  capital  through  suitable  intermediaries.

In  the  implementation  of  new  products  under  the  Amsterdam  special  action  programme,  the  Bank
will  seek  an  appropriate  balance  between  risk  and  remuneration.

4. Education,  health,  urban  environment  and  environmental  protection

4.1.(cid:217)The  Bank  proposes  to  develop  its  activity  by  financing  investment  projects  in  the  education  sector,
throughout  the  Community,  as  they  contribute  to  the  supply  of  a  skilled  and  adaptable  workforce.

4.2.(cid:217)Health  projects  could  likely  benefit  from  EIB  loans,  throught  the  Union,  when  they  are  consistent
with  one  of  the  existing  Bank  lending  objectives  (e.g.  regional  development,  or  urban  renewal),  or
contain  important  R&D,  training  or  other  innovative  characteristics.

4.3.(cid:217)Urban  environment  financing  could  include  housing  investment  components  on  a  prudent  basis  when
they  are  integrated  in  well(cid:220)defined  urban  renewal  and  development  schemes.  An  open  approach  to  the
service  sector  (including  retail  trade)  is  also  appropriate.

4.4.(cid:217)For  all  these  eligibility  extensions  the  usual  quality  approach  of  the  Bank  in  terms  of  soundness  of

projects  or  credit  risk  will  be  maintained.

4.5.(cid:217)The  Bank  will  deepen  its  involvement  in  environmental  protection  investment.  Project  preparation  will

also  be  further  supported  by  the  Bank  through  the  financing  of  studies.

5.

Large  infrastructure  projects  and  networks

5.1.(cid:217)The  following  specific  measures  correspond  to  a  deepening  of  ongoing  practice  and  procedures  in  the

finance  of  large  infrastructure  projects  and  related  networks:

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-(cid:217)the  Bank  is  ready  to  grant  long  maturities  and  grace  periods  adapted  to  the  project  characteristics.
Project  preparation  will  also  be  further  supported  by  the  Bank  through  the  financing  of  studies,

-(cid:217)in  particular  for  TEN(cid:220)type  projects  and  notably  those  on  the  priority  list,  the  Bank  will  aim  at

developing,  on  a  case(cid:220)by(cid:220)case  approach,  tailor(cid:220)made  packages.

5.2.(cid:217)In  parallel,  the  Bank  will  review  the  recommendations  of  the  Kinnock  High  Level  Group  on  Public/
Private  Partnership  financing  of  TENs  projects  concerning  PPPs  and  complementary  financing
instruments,  able  to  accommodate  a  higher  risk  profile,  in  close  cooperation  with  the  Commission  and
the  EIF,  and  elaborate  operational  proposals.

6.

SMEs

The  area  of  SME  finance  is  among  the  priorities  of  the  Bank  and  particularly  relevant  in  terms  of  job
creation.  Experience  clearly  demonstrates  a  strong  heterogeneity  of  structures  and  interests  across  the
Member  States  in  the  field  of  SME  finance  and  a  flexible  approach  allowing  for  the  development  of
appropriate  instruments  is  therefore  called  for.  Similarly,  "high  technology  projects’  should  be  inter(cid:220)
preted  in  a  wide  sense.  The  following  specific  measures  are  considered  appropriate:

-(cid:217)to  set  up  a  special  window,  able  to  provide  support  for  different  types  of  new  instruments,  backed

by  appropriate  recourse  to  the  annual  surplus  of  the  Bank,  as  specified,

-(cid:217)in  all  these  cases,  implementation  would  be  through  the  intermediary  of  sound  financial  insti(cid:220)
tutions,  reinforcing  partnership  with  the  banking  and  financing  community  and  ensuring  a  catalytic
and  leverage  effect.  The  EIF  is  called  to  be  privileged  partner  of  the  Bank  in  this  field,

-(cid:217)a  pragmatic  approach  will  be  followed,  individual  operations  will  be  identified  as  soon  as  possible

and  submitted  to  the  Board  of  Directors  in  accordance  with  the  usual  procedures.

7. Reporting

Annual  reporting  to  the  Board  of  Governors  and  the  Board  Directors  will  be  carried  out  on  the
implementation  of  the  Amsterdam  special  action  programme  and  on  results  achieved  and  problems
encountered.