REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT ON 2011 ACTIVITY UNDER THE EIB EXTERNAL MANDATE
Date: 2012-11-07
Institutions: European Commission
Subjects: EIB loan, Eastern Bloc countries, Latin America, Mediterranean third countries, Russia, South Africa, interinstitutional cooperation (EU), pre-accession aid

EUROPEAN 
COMMISSION 

Brussels, 7.11.2012  
COM(2012) 637 final 

REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN 
PARLIAMENT 

ON 2011 ACTIVITY UNDER THE EIB EXTERNAL MANDATE 

{SWD(2012) 357 final} 
{SWD(2012) 358 final} 

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REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN 
PARLIAMENT 

ON 2011 ACTIVITY UNDER THE EIB EXTERNAL MANDATE 

TABLE OF CONTENTS 

1. INTRODUCTION 

2. KEY RESULTS 

3. FINANCING OPERATIONS 

3.1. Overview of EIB financing volume in the regions covered by the Decision 

3.2. Contribution to EU policy objectives 

3.3. Sectoral breakdown 

3.4. Impact and value added of EIB operations 

4. COOPERATION WITH THE COMMISSION 

5. COOPERATION WITH INTERNATIONAL FINANCING INSTITUTIONS 

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REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

ON 2011 ACTIVITY UNDER THE EIB EXTERNAL MANDATE 

1. INTRODUCTION 

Decision No 1080/2011/EU of the European Parliament and of the Council1 (the “Decision” 
or  “mandate”)  requires  the  Commission  to  report  annually  on  European  Investment  Bank 
(EIB) financing operations carried out under the EU guarantee. This report builds on yearly 
reports  provided  by  EIB  and  covers  2011  activity  under  EIB  external  mandate.  The  present 
report  does  not  therefore  refer  to  developments  that  occurred  in  2012,  in  particular  the 
endorsement by the June 2012 European Council of an EIB capital increase. 

Outside  the  EU,  in  the  regions  covered  by  the  mandate,  the  EIB  provides  loans  and  loan 
guarantees with the cover of the EU guarantee ("operations under mandate") or at its own risk 
("own risk operations") under the framework of Article 16 of its Statute. The present report 
reviews  EIB  financing  operations  under  mandate  and  provides  a  summary  of  the  own  risk 
operations in 2011. The EIB operations in Africa, Caribbean and Pacific (ACP) as well as in 
Overseas Countries and Territories (OCT) are covered in a separate annual report. It should be 
noted that reporting on  some  of  the  additional requirements introduced by Article  11  of the 
Decision  will  only  apply  to  EIB  financing  operations  for  which  a  financing  application  has 
been submitted after 30 October 2011 and which are signed after 1 January 2012. 

More detailed information  and statistical tables on the above activities, including at project, 
sector, country and regional level, are provided in the attached Staff Working Document (the 
“SWD”)2. Another SWD includes the Regional Technical Operational Guidelines developed 
jointly  by  the  Commission  and  the  EIB,  in  consultation  with  the  European  External  Action 
Service, in accordance with Article 6 of the Decision which sets out the contribution of EIB 
financing operations under the mandate to the Union policies.  

The Regional Technical Operational Guidelines aim at ensuring such support and should be 
valid  until  the  expiry  of  the  current  mandate.  Decision  1080/2011/EU  requires  the 
Commission to transmit to the European Parliament and the Council these guidelines as soon 
as they are established. 

In  should  be  noted  that  this  report  will  be  annexed  to  the  upcoming  impact  assessment 
accompanying  the  legislative  proposal  for  a  Decision  granting  an  EU  guarantee  to  the  EIB 
against losses under loans and loan guarantees for projects outside the EU under next Multi-
Annual Financial Framework (MFF). 

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Decision No 1080/2011/EU of the European Parliament and of the Council of 25 October 2011 granting 
an EU guarantee to the European Investment Bank against losses under loans and loan guarantees for 
projects outside the Union and repealing Decision No 633/2009/EC (OJ L 280, 27.10.2011, p. 1). 
SWD(2012)358 

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2. KEY RESULTS 

The Decision increased the overall General Mandate ceiling by EUR 1,684 mn and released 
an additional EUR 2,000 mn Climate Change Mandate to provide the EIB with a guarantee of 
up to EUR 29,484 mn for its operations under mandate. 

In  the  course  of  2011,  several  key  initiatives  were  launched  at  EU  level,  in  particular  as  a 
reaction to the Arab spring. In particular, the EIB lending ceiling under EU guarantee for the 
Mediterranean region was increased by EUR 1 bn. The Commission and the EIB, alongside 
relevant  Member  States,  actively  participated  in  the  G8  Deauville  Partnership  Initiative  and 
set up an EU Task Force for various countries in the Southern Mediterranean. 

In 2011, in the face of a deteriorating world economic outlook, the EIB continued to support 
economic  activity  in  the  mandate  regions  as  well  as  significantly  increased  its  lending  to 
climate action related projects. Total EIB financing volume outside the EU equalled EUR 7.3 
bn in 2011, some 17% less than the EUR 8.7 bn reached in 2010, but still on average above 
pre-crisis levels. In the regions covered by the mandate, EIB activity amounted to EUR 6.5 bn 
in 2011 compared to EUR 7.8 bn in 2010. According to the latest Corporate Operational Plan 
2012-2014 endorsed by the EIB at the end of 2011, EIB lending volumes in the external area 
are expected to decline further to reach pre-crisis levels of EUR 6.5 bn in 2012, EUR 5.9 bn in 
2013 and EUR 5.2 bn en 2014. In particular, the EIB external financing on own resources (i.e. 
without  considering  the  ACP  Investment  Facility  and  the  risk  capital  activity  in 
Mediterranean  countries)  would  amount  to  EUR  6.0  bn  in  2012,  EUR  5.3  bn  in  2013  and 
EUR 4.6 bn en 2014. 

The regions covered by the mandate were by no means unaffected by the global crisis. In the 
Pre-Accession  countries,  which  accounted  for  around  52%  of  total  lending  in  mandate 
regions,  although  economic  growth  stabilised  at  7.5%  in  2011,  credit  growth  remained 
substantially  below  pre-crisis  levels.  The  EIB,  as  the  key  multilateral  lender  in  the  region, 
continued  to  support  economic  activity  through  substantial  lending  to  SMEs  (31%  of  total 
volume) and by committing substantial resources to investments in the transport and energy 
sectors. 

At the same time, EIB lending to climate action projects increased by EUR 500 mn to EUR 
2.1 bn in 2011, representing 32% of total signatures (from 21% in 2010). Many of the least 
CO2 efficient countries were targeted, e.g. Russia, South Africa and India. A particular effort 
was  made  in  Asia  and  Latin  America  where  such  lending  accounted  for  78%  of  total 
signatures.  Climate  action  further  accounted  for  29%  of  lending  to  Pre-Accession  countries 
and 30% of lending to South Africa in 2011. 

While lending volumes were largely stable for most of the regions covered by the mandate, 
lending volumes in the Mediterranean region sharply fell to EUR 965 mn from a historically 
high  level  of  EUR  2.5  bn  in  2010.  This  was  due  to  project  preparation  delays  experienced 
following  the  Arab  spring  events  and  consequent  uncertainty  and  challenging  business 
environment.  Several  of  the  interim  administrations  deferred  decisions  on  long-term 
investment  programmes  until  after  democratic  elections.  Moreover,  as  part  of  the  EU 
sanctions  towards  Syria,  the  EIB  activity  in  the  country  was  suspended.  In  this  context,  the 
Commission adopted a Delegated Act in April 2012 removing Syria from the list of eligible 

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countries  under  the  mandate3.  In  this  context,  it  should  be  noted  that  the  EIB  experienced 
defaults on interest and loan repayments from the Syrian Government and a first call on the 
EU Guarantee was made in May 2012 for an approximate amount of EUR 15.4 million. 

3. FINANCING OPERATIONS 

3.1.  Overview of EIB financing volume in the regions covered by the Decision 

Total  volume  for  the  regions  covered  by  the  mandate  amounted  to  EUR  6.5  bn  in  2011, 
compared  to  EUR  7.8  bn  in  2010.  In  2011,  amounts  signed  under  EIB  own  risk  facilities 
increased  by  18%,  while  the  lending  volume  under  the  mandate  decreased  by  37%.  The 
following table provides an overview of the volume of EIB financing on its own resources in 
2011 in the regions covered by the mandate. 

Table 1: EIB financing in 2011 in the regions covered by the mandate  

Countries of operation 

Operations under mandate 

(EUR million) 

Comprehensive 
guarantee 

Political risk cover  

Total 

EIB own risk 
operations 

Total 

Pre-Accession Countries 

Mediterranean countries 

Eastern Neighb., Russia 

Asia and Latin America 

South Africa 

Total 

998 

553 

625 

61 

115 

2,352 

26 

373 

50 

249 

- 

698 

1024 

926 

675 

310 

115 

3,050 

2,358 

39 

101 

861 

50 

3,409 

3,381 

965 

776 

1,171 

165 

6,459 

In  2011,  77%  of  the  loans  signed  under  mandate  were  covered  by  a  Comprehensive 
Guarantee,  which  is  used  for  sovereign  and  sub-sovereign  operations,  while  23%  benefited 
from a Political Risk Guarantee cover for private sector operations. The combined volume of 
signatures under either guarantee represents 47% of total financing in 2011 in regions covered 
by the Decision, whereas the remaining 53% corresponds to a record high of EUR 3.4 bn of 
EIB own risk lending with no recourse to the EU guarantee. 

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Commission  Delegated  Decision  of  8  February  2012  amending  Annex  III  to  Decision  No 
1080/2011/EU  of  the  European  Parliament  and  of  the  Council  granting  an  EU  guarantee  to  the 
European  Investment  Bank  against  losses  under  loans  and  loan  guarantees  for  projects  outside  the 
Union and repealing Decision No 633/2009/EC, as regards Syria (OJ L 110, 24.4.2012, p. 38). 

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9 000

8 000

7 000

6 000

5,584

5,522

7,675

7,759

n
o
i
l
l
i

m
o
r
u
E

5 000

4 000

3 000

2 000

66%

1 000

0
2007

6,459

47%

78%

63%

73%

2008

2009

2010

2011

Mandate

EIB Own Risk Facilities

At the end of 2011, the overall amount signed under the mandate stood at EUR 19.4 bn, or 
66% of the overall ceiling under the Decision, which is broadly in line with expectations after 
five years of the seven-year period of the mandate elapsed. An overall amount of EUR 10.1 
bn is the available headroom for the EIB under the mandate. Despite the expected reduction 
of EIB external activity in 2012 and 2013 and the increase in the overall ceiling introduced by 
the Decision, the EIB is expected to reach some of the regional ceilings by the end of 2013 
(e.g. in the Pre-Accession region), while others are more uncertain (e.g. in the Mediterranean 
region).  It  should  be  noted  here  that  the  Decision  introduces  the  possibility  for  a  10%-
flexibility between the regional ceilings. 

Table 2: EIB total signatures and disbursements under the mandate (2007-2011) 

EUR mn 

Ceiling 

Net Signed 

Net signed 
as % of 
ceiling 

Disbursed 

Net 
disbursed 
as % of net 
signed 

Pre-Accession 

Mediterranean 

Eastern Neighbours, Russia 

Asia and Latin America 

South Africa 

General Mandate Total  

Climate Change Mandate (2011-2013) 

Total Mandate 

9.048 

9.700 

3.848 

3.952 

936 

27.484 

2.000 

29.484 

7.622 

6.559 

1.709 

2.761 

591 

19.242 

150 

19.392 

84% 

68% 

44% 

70% 

63% 

70% 

8% 

66% 

3.899 

2.079 

318 

1.690 

425 

8.411 

150 

8.561 

51% 

32% 

19% 

61% 

72% 

44% 

100% 

44% 

In terms of disbursements, as at the end of 2011, the EIB had disbursed EUR 8.5 bn or 44% of 
the  net  amounts  signed.  The  disbursement  rates  in  Pre-Accession  countries,  Asia,  Latin 
America  and  South  Africa  ranged  between  50%-75%  reflecting  the  usual  time  lag  between 
finance  contract  signatures  and  project  implementation  and  corresponding  disbursement. 
Disbursements  in  the  Mediterranean  countries  were  lower  at  32%  of  net  signed  amounts, 

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reflecting the consequences of the Arab Spring and the suspension of operations in Syria. The 
low  disbursement  rates  of  19%  of  signatures  in  Eastern  Europe,  Southern  Caucasus  and 
Russia reflect the delays in resolving institutional issues in the region and the fact that more 
than  three  quarters  of  the  amounts  were  signed  in  the  last  two  years.  The  EIB  expects  that 
operations in the Eastern Neighbourhood and Russia can be accelerated in light of the broader 
objectives  set  out  under  the  mandate  for  EIB  activities  in  the  region,  the  Memorandum  of 
Understanding (MoU) with European Bank for Reconstruction and Development (EBRD) and 
the Commission signed in March 2011 and the use of targeted technical assistance to speed up 
project implementation. 

Table 3: Annual lending under the current 2007-2013 mandate 

EUR mn 

2007 (*) 

2008 

2009 

2010 

2011 

Gross 
Total 

Cancel-
lations 

Net 
Total 

Pre-Accession 

Mediterranean 
Eastern Neighbours, 
Russia 

Asia and Latin America 

South Africa 

General Mandate Total  
Climate Change 
Mandate (2011-
2013)(**) 

389 

1.205 

- 

- 

305 

2.009 

1.195 

170 

469 

203 

1.899 

4.045 

2.859 

1.510 

233 

1.088 

280 

5.969 

1.535 

2.009 

631 

643 

50 

874 

926 

675 

310 

115 

7.666 

6.845 

1.709 

2.815 

648 

44 

286 

- 

53 

56 

7.622 

6.559 

1.709 

2.761 

591 

4.868 

2.900 

19.681 

449  19.242 

150 

150 

- 

150 

Total Mandate 
3.050 
(*) Until 31st July 2007, lending was also carried out under the previous 2000-2007 mandate. 
(**) The EUR 150 mn operation signed under the climate change mandate in 2011 was signed in pre-
accession region. 

19.831 

449  19.392 

In  terms  of  number  of  projects,  29  projects  were  financed  under  the  mandate  in  2011 
compared to 46 in 2010. 

EIB's financing activity in Pre-Accession countries was stable at EUR 3.4 bn in 2011 as it was 
in  2010,  representing  52%  of  the  activity  in  the  regions  covered  by  the  mandate.  Lending 
under  the  mandate  declined  to  EUR  1  bn,  while  lending  under  the  own-risk  Pre-Accession 
Facility  increased  by  18%  to  EUR  2.4  bn.  In  order  to  accommodate  for  reduced  headroom 
under the mandate and still significant needs in the Pre-Accession region, an increase of the 
lending ceiling of the Pre-Accession Facility by EUR 5.7 bn until 2013 was approved by the 
EIB Board of Governors early 2011.  

While  activity  in  the  Mediterranean  region  sharply  decreased,  EIB  financing  activity  in  the 
Eastern Neighbourhood grew in 2011 to reach EUR 776 mn (from EUR 631 mn in 2010), of 
which EUR 675 mn under the mandate representing a record level in the region. In Asia and 
Latin  America,  total  financing  amounted  to  EUR  1.2  bn  as  in  2010,  with  lending  under  the 
mandate  having  declined  to  EUR  310  mn,  compensated  by  a  corresponding  increase  of 
lending at the own risk of the EIB, notably under the Facility for Energy Sustainability and 
Security  of  Supply  (ESF).  In  South  Africa,  three  new  loans  totalling  EUR  165  mn  were 
signed in 2011, including the first South African signature of EUR 50 mn under the EIB own 
risk ESF. 

3.2.  Contribution to EU policy objectives  

The  objective  of  EIB  operations  under  the  Decision  is  to  support  relevant  external  policy 
objectives  of  the  Union.  The  Decision  replaces  the  previously  established  region-specific 

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objectives  for  operations  under  EU  guarantee  with  the  following  horizontal  high-level 
objectives for all regions covered by the mandate: 

(i) 

Climate change mitigation and adaptation;  

(ii) 

Development of social and economic infrastructure; 

(iii) 

Local private sector development, in particular support to SMEs; 

Additional  underlying  objectives  include  the  contribution  to  the  general  principles  guiding 
external  action,  as  referred  in  Article  21  TEU  and  regional  integration  among  partner 
countries,  including  economic  integration  between  pre-accession  countries,  neighbourhood 
countries and the Union. The EIB may consider increasing its activity in support of health and 
education when there is clear value added.  

The attached regional technical operational guidelines jointly established by the Commission 
and EIB establish a link between the Union regional policy framework, the horizontal high-
level mandate objectives and their implementation. These guidelines aim to ensure that EIB 
financing  is  complementary  to  corresponding  EU  policies,  programmes  and  instruments  in 
different regions. 

The  revised  objectives  indicated  above  will  form  the  basis  of  reporting  for  new  operations 
from 2012 onwards. However, some indications can already be drawn from activities carried 
out in 2011.  In particular, EIB  support for social and economic infrastructure accounted for 
64%  of  the  overall  EIB  activity  in  the  regions  covered  by  the  mandate  in  2011  (75%  for 
operations under mandate). Support to the private sector accounted for 55% of the overall EIB 
activity in the regions covered by the mandate in 2011 (29% for operations under mandate), 
while  support  to  SMEs  through  local  financial  intermediaries  accounted  for  17%  of  the 
overall EIB activity in the regions covered by the mandate in 2011 (6% for operations under 
mandate). 

Over  the  past  years,  the  EIB  has  strengthened  its  Climate  Action  lending  and  its  wider 
commitment to the EU goal of low-carbon and climate-resilient growth within and outside the 
Union  in  particular  in  the  follow-up  of  the  2009  UNFCC  Copenhagen  Summit.  In  2011, 
Climate  Action  signatures  increased  to  EUR  2.08  bn  (32%  of  total  EIB  financing  in  the 
regions  concerned),  of  which  EUR  0.89  bn  under  the  mandate  (29%  of  operations  under 
mandate), from EUR 1.6 bn in 2010 (21% of total EIB financing in the regions concerned). 

The EIB has adopted a set of sector-specific eligibility criteria for projects to qualify under the 
climate  action  objective.  For  instance  not  all  projects  that  improve  energy  consumption  are 
automatically eligible, but only those which can demonstrate energy efficiency gains of 20% 
or more from the baseline. In addition, only the share of lending that responds to the climate 
objective is taken into account. The majority of Climate Action lending is related to projects 
in the following two broad areas: Renewable Energy and Energy Efficiency, and Sustainable 
Transport. 

More detailed information on the extent of EIB contribution to EU policy objectives targeted 
by the Decision is provided in the SWD. 

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Pre-Accession 
Countries (PA) 

Mediterranean 
countries (MED) 

Eastern 
Neighbours  & 
Russia (EAST) 

Asia and Latin 
America (ALA) 

South 
(SA) 

Total 

3.3. 

Sectoral breakdown 

Table  4  below  provides  an  overview  of  the  regional  and  sectoral  distribution  of  EIB 
operations under the Decision in 2011.  

Table 4: Sectoral breakdown of operations signed in 2011 (EUR mn) under the mandate 

Region 

Total 

Energy 

Transports 

Services and 
Industry 

Water, 
sanitation 

Credit lines for 
SMEs 

Health and 
Education 
Infrastructure 

Agriculture, 
Fisheries & 
Forestry (*) 

Telecom-
munications 

1,024

-

-

617

60%

15

1%

55

5%

87

8%

100

10%

150

15%

926

50

5%

163

18%

421

46%

262

28%

30

3%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

100

32%

-

-

675

175

26%

450

67%

-

-

-

50

7%

310

61

20%

149

48%

-

-

-

-

Africa 

115

-

-

-

-

115 100%

-

-

-

-

-

-

3,050

286

9% 1,230

40% 585

20% 432

14% 167

6% 100

3% 150

5% 100

3%

*) Under this heading a EUR 150 mn operation in Turkey was signed under the Climate Change mandate 

3.4. 

Impact and value added of EIB operations 

In response to the mandate and the obligation of the EIB to further strengthen its assessment, 
measurement  and  reporting  on  the  results  and  impacts  of  its  operations,  the  EIB  adopted  a 
new  framework  in  2011,  the  Results  Measurement  Framework  (REM),  to  be  applied  to 
operations in all regions covered by the mandate. The REM will gradually be implemented in 
2012. 

In line with the former frameworks, REM is structured along three pillars: 

Pillar 1 - the consistency with and contribution to EU policy objectives and priorities; 
Pillar 2 - the quality and soundness of the project as well as its expected and actual results; 
Pillar 3 - the financial and non-financial additionality of the EIB contribution.  

The REM will improve ex-ante project assessments and the EIB's ability to report on actual 
results  achieved.  At  the  same  time  it  simplifies  client  reporting  requirements  because  it  is 
harmonized  as  much  as  possible  with  results  indicators  of  other  International  Financial 
Institutions. 

In 2011, the expected performance and impact of EIB financing continued to be assessed by 
two  former  frameworks,  namely  the  Value  Added  (VA)  framework  in  EU  and  in  the  Pre-
Accession Countries and the Economic and Social Impact Assessment framework (ESIAF) in 
all other regions covered by the mandate. 

The  assessment  is  performed  by  the  EIB  ex-ante  on  the  basis  of  facts  and  data  collected 
during  project  appraisal  phase.  The  framework  is  designed  so  that  it  can  provide  valuable 
information  and  benchmarks  throughout  the  life  of  the  project,  in  particular  for  both 
monitoring and ex-post evaluation. 

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Table  5a:  Value  Added  ratings  of  operations  approved  in  2011  in  Pre-Accession  countries 
(VA framework) (maximum score = 200).  

Impact rating 

Pillar 1 

Pillar 2 

Pillar 3 

Average 
score 

Operations 
approved 

Mandate 

Pre-Accession Facility 

146 

139 

120 

141 

158 

155 

141 

145 

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Table  5b:  Value  added  ratings  of  operations  approved  in  2011  in  Mediterranean,  Eastern 
Neighbourhood and Russia, Asia and Latin America, and South Africa (ESIAF framework)  

Impact rating 

Pillar 1 

Pillar 2 

Pillar 3 

Investment loans 

Intermediated 
loans (SMEs) 

High 

Medium 

Moderate 

Low 

Total 

23 (72%) 

9 (28%) 

0 

0 

13 (41%)

11 (34%)

1 (3%)

0

3 (9%)

4 (13%)

0

0

20 (63%)

11 (34%)

1(3%)

0

32 (100%) 

25 (78%)

7 (22%)

32 (100%)

In Pre-Accession countries, small differences between operations under EU guarantee and at 
own-risk can be observed for the Pillar 1 and 2, the latter partially reflecting the fact that the 
mandate is also targeted at projects with relatively higher uncertainty and project risks, where 
the EU guarantee provides the highest value added.  

In the other mandate regions, nine operations received “high” overall rating impacts in all 
three pillars, these operations were mostly related to climate change renewable and alternative 
energy projects. 

4. COOPERATION WITH THE COMMISSION 

The Commission and the EIB cooperated intensively in the framework of the mid-term review 
of  the  EIB  external  mandate.  The  ordinary  legislative  procedure  for  the  adoption  of  the 
Decision was finalised in October 2011. The Decision calls for even greater cooperation and 
synergy  between  the  Commission  and  the  EIB,  as  well  as  the  European  External  Action 
Service (EEAS). 

Following  the  adoption  of  the  Decision,  in  November  2011  the  Commission  and  the  EIB 
signed  a  new  guarantee  agreement  and  a  new  recovery  agreement  in  line  with  respectively 
Article 14 and 13 of the Decision, which replaced the previous ones, to cater for the relevant 
changes introduced in the new Decision. The Commission and the EIB also jointly developed 
the Technical Regional Operational Guidelines attached to this Report.  

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In  2012,  the  two  institutions  are  expected  to  update  the  Memorandum  of  Understanding 
defining the terms and conditions of strengthened cooperation to extend it to the EEAS and 
take  into  account  the  new  elements  introduced  in  the  mandate.  Cooperation  on  the  ground 
should  also  be  reinforced  through  more  extensive  co-location  of  EIB  offices  with  EU 
Delegations.  In  parallel,  close  cooperation  is  on-going  to  prepare  the  proposal  for  the  next 
EIB external mandate covering the period 2014-2020. 

In  both  the  Southern  and  Eastern  Neighbourhood  regions,  the  EIB  was  associated  to  the 
European  Neighbourhood  Policy  Review.  Cooperation  between  the  EIB,  the  EEAS  and  the 
Commission  has  intensified  over  2011,  in  particular  in  the  context  of  coordinating  the  EU 
response  to  the  Arab  Spring  and  building  the  Partnership  for  Democracy  and  Shared 
Prosperity  in  the  Southern  Mediterranean.  The  EIB  has  also  been  actively  involved  in  the 
High level Task forces established by HR/VP Ashton to further optimise coordination in some 
countries of the region, the first meeting of which took place in Tunisia in September 2011. 
The  EIB  also  contributed  to  the  reflections  on  the  Agenda  for  Change4,  the  Commission 
communication  seeking  to  increase  the  impact  of  EU  development  policy,  specifically 
concerning support to sustainable economic growth and private sector development. 

The  above  strands  of  work  will  continue  in  the  next  years  with  the  EIB  supporting  the 
Commission and the EEAS in the implementation of the new Neighbourhood Policy as well 
as  relevant  priorities  of  the  Agenda  for  Change.  Joint  work  will  also  focus  on  Enlargement 
Policy  in  support  of  Croatia’s  EU  accession  and  further  reform  of  candidate  countries  and 
potential candidates  on  their road towards EU integration. The EIB, with the support of  the 
Commission,  will  seek  to  re-start  operations  in  Kosovo5.  In  this  context,  it  should  be 
mentioned that – in accordance with Article 10 of the Decision which stipulates that “Kosovo 
is represented by the United Nations Mission in Kosovo or by an administration designated in 
the  regional  technical  operational  guidelines”  –  the  Guidelines  mentioned  above  envisage 
that such administration should be the Government of Kosovo.  

Co-operation  on  sectoral  issues  will  be  further  enhanced,  particularly  in  the  area  of  climate 
action  and  in  the  framework  of  the  Sustainable  Energy  for  All  Initiative.  In  this  context,  in 
line with Article 6 of the Decision, the EIB will, in cooperation with the Commission, develop 
by the end of 2012, a strategy on how to gradually and steadily increase under the mandate 
the percentage of projects promoting the reduction of CO2 emissions and phase out financing 
projects detrimental to the achievement of the Union climate objectives. 

5. COOPERATION WITH INTERNATIONAL FINANCING INSTITUTIONS  

In 2011, co-financing with other Internation Financial Institutions (IFIs) or European bilateral 
institutions  represented  56%  of  EIB  total  signatures  under  the  mandate.  Although  this 
proportion decreased following the steady increase experienced over the previous four years 
(with  a  peak  of  64%  in  2010),  it  still  indicates  a  continued  high  level  of  co-financing  with 
other financial institutions. The list of co-financed operations signed in the regions covered by 
the mandate in 2011 is included in the SWD.  

4 
5 

COM(2011) 637 final. 
This designation is without prejudice to positions on status, and is in line with UNSCR 1244/99 and the 
Opinion of the International Court of Justice on the Kosovo declaration of independence. 

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A new MoU between the Commission, the EIB  Group and the EBRD was signed in March 
2011.  This  MoU  replaces  and  merges  earlier  agreements  covering  Eastern  Europe,  the 
Southern  Caucasus,  Russia  and  Central  Asia  (of  December  2006)  and  Turkey  (of  January 
2009).  The  MoU  will  allow  for  enhanced  strategic  and  operational  cooperation.  The  new 
MoU on cooperation outside the EU will be revised in 2012 to cater for the EBRD's extension 
of activity in the Mediterranean region. 

The two-year pilot phase of the Tripartite Agreement on the Mutual Reliance Initiative signed 
between  EIB,  AFD6  and  KfW  progressed  substantially  during  2011  in  the  Southern 
Neighbourhood and ACP regions. The initiative aims to enhance the collective effectiveness 
and efficiency of the three institutions, by mutually recognising and relying on the procedures 
and  standards  applied  by  one  of  them  taking  the  leading  role  for  work  on  a  co-financed 
project. During 2012, the focus will be on developing common operational guidelines. 

Cooperation  with  the  World  Bank  Group  continued,  including  the  signature  of  a  bilateral 
Cooperation  Agreement  between  EIB  and  International  Finance  Corporation  to  improve 
collaboration in financing private sector development projects in the Southern Neighbourhood 
and  ACP  regions.  The  EIB  is  also  working  in  conjunction  with  Multilateral  Development 
Banks in the context of the Deauville Partnership, to support sustainable and inclusive growth 
in response to the Arab Spring, as highlighted by G8 leaders at their May 2011 Summit. In 
addition, the EIB continued its participation on various specialised working groups set up by 
IFIs to to share best practices or to address specific issues. 

The  EIB  has  been  an  active  player  in  the  regional  blending  facilities  established  by  the 
Commission  over  the  past  years  together  with  the  EIB,  the  EBRD,  Council  of  Europe 
Development Bank and other European Bilateral Financial Institutions7. In addition, the EIB 
played  a  key  role  in  the  Group  of  Experts  set  up  by  the  Commission  to  assess  the 
establishment of an 'EU Platform for cooperation and development'.  

The Commission, in cooperation with the EIB and other European multilateral and bilateral 
financial  institutions,  has  started  reflections  on  new  financial  instruments  in  support  of  EU 
external  policies  in  next  MFF.  The  significant  increase  in  the  use  of  innovative  financial 
instruments  should  allow  a  greater  share  of  EU  grants  to  be  blended  with  loans  or  used  in 
equity  or  risk-sharing  instruments,  so  as  to  mobilize  additional  funding,  especially  from 
private-sector  investors,  to  cover  the  investment  needs  of  our  partner  countries.  The  use  of 
innovative  financial  instruments  in  external  policies  should  be  supported  under  the  future 
Platform, in order to enhance effectiveness and efficiency of EU external financing.  

6 
7 

Agence Française de Développement 
e.g.  the  Western  Balkans  Investment  Framework,  the  Neighbourhood  Investment  Facility,  the 
Investment  Facility  for  Central  Asia,  the  Asia  Investment  Facility  and  the  EU-Africa  Infrastructure 
Trust Fund 

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