COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON 2012 EIB EXTERNAL ACTIVITY WITH EU BUDGETARY GUARANTEE
Date: 2013-11-28
Institutions: European Commission
Subjects: ACP countries, Caucasus countries, EIB loan, Eastern Bloc countries, Latin America, Mediterranean third countries, Russia, South Africa, credit guarantee, interinstitutional cooperation (EU), overseas countries and territories, pre-accession strategy













EUR-Lex - 52013SC0484 - EN











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52013SC0484

COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON 2012 EIB EXTERNAL ACTIVITY WITH EU BUDGETARY GUARANTEE /* SWD/2013/0484 final */









COMMISSION STAFF WORKING DOCUMENT
Accompanying the document
REPORT FROM THE COMMISSION TO THE
EUROPEAN PARLIAMENT AND THE COUNCIL
ON 2012 EIB EXTERNAL ACTIVITY WITH
EU BUDGETARY GUARANTEE
1.           Introduction
This Staff Working
Document (SWD) reviews the implementation of the current EIB external mandate
at regional and country level as well as the contribution of EIB financing
operations to the fulfilment of external policy objectives, taking into account
the operational objectives of the EIB.
The following tables summarise the EIB own
resources lending activity in the regions covered by the mandate: overall
signatures (Table 1), the signatures and available headroom under the mandate (Table
2) and the signatures and available headroom under EIB own risk facilities (Table
3).
Table 1:
Overview of overall EIB lending signatures in the regions covered by the Decision
Table 2: EIB lending signatures under the current Decision
Table 3: EIB lending signatures under EIB own risk
facilities
The chart below illustrates the sectoral
distribution of EIB total financing (EUR 6.5bn) under the Mandate and under the
EIB own-risk Facilities in 2012. Credit lines for SMEs (38%), transport (23%),
energy (12%), industry and services sectors (12% together) remained key priorities
for EIB financing with more than EUR 3bn invested in 2012 outside the EU. 
Chart 1:
Regional and sectoral breakdown of signatures under Mandate and Facilities in
2012
2.           Overall contribution to EU policy
objectives
The objective of EIB operations under the
guarantee is to support relevant external policy objectives of the EU. In
particular, the Decision provides for some specific policy goals to be
addressed through EIB external operations. The
following chart illustrates the EIB contribution to the high-level objectives
of the Decision based on the existing stock of operations signed over the
period of implementation of the Decision (1/08/2007-31/12/2012). Considering
that the objectives are not mutually exclusive, some operations contribute to
more than one objective; e.g. sustainable transport project may, in addition to
economic infrastructure, contribute to climate change mitigation.
Chart 2: Expected contribution to mandate objectives
based on signatures under Mandate and Facilities in 2007-2012 
2.1.        Climate change mitigation
and adaptation
As regards climate action, 2012 overall EIB
signatures amounted to EUR 1.6 bn, representing 24% of total EIB financing in
the regions covered by the Decision (29% of signatures under the EU guarantee,
either under the general or the climate change mandate envelopes). This
proportion is in line with the EIB’s global target of 25% of overall lending
(increased from 20% in 2010), and relatively more than in 2010 when broadly an
equal volume of EUR 1.6 bn in climate action signatures accounted for 21% of
total financing in the regions covered by the Decision (15% of signatures under
the EU guarantee).
More precisely, projects contributing to
climate action signed under the EU guarantee in 2012 comprised: 
·                        
In the Pre-Accession countries, two projects
signed in Turkey and one in Montenegro, the latter comprising an urgent flood
relief and prevention project. In Turkey too, the climate action projects
comprised a proportion (EUR 10 mn) of EUR 100 mn loan for flood prevention and
protection as well as an environmental loan of EUR 75 mn for financing of small
and medium-scale projects carried out by local authorities; 
·                        
in the Mediterranean, five projects of which
three under the Climate Change Mandate: a loan in Lebanon to a financial
intermediary for on-lending to private sector companies for energy efficiency
and renewable energy, two projects in Morocco, supporting the first phase of a
solar power complex, and upgrading of public irrigation systems, a project in Egypt
supporting an extension of the Cairo metro, and a combined heat and power plant
in Israel;
·                        
in Eastern Neighbourhood: a loan in Ukraine for hydropower infrastructure rehabilitation along the river Dnieper;
·                        
in Asia, under the Climate Change Mandate, a loan
in Vietnam to financial intermediaries for on-lending for renewable energy,
energy efficiency and other climate operations;
·                        
in Latin America, in Ecuador, the construction
of Quito’s first metro line;
·                        
in South Africa, a loan for the construction and
operation of a solar tower renewable energy plant. 
Complementing the Bank’s climate action
financing under the EU guarantee, the following operations were financed in
2012 under the EIB own-risk facilities:
·                        
in Pre-Accession, three intermediated loans via
local financial institutions signed in Turkey for on-lending primarily to small
and medium-sized enterprises for renewable energy and energy efficiency
projects, and one direct loan for research and development in Turkey for energy
improvement technology in motor vehicles;
·                        
in Asia, one intermediated framework loan in
China for financing of forestry projects contributing to climate change
mitigation through carbon sinking and avoidance of greenhouse gas emissions; 
·                        
in the Mediterranean, one direct loan for research
and development in Israel for electric vehicle infrastructure and service.
The Bank calculates the carbon footprint of
all projects directly financed (or through fully appraised framework loan
allocations) which emit more than 100kt of CO2equivalent (CO2eq) per year
(absolute emissions) or lead to an emission variation of more than 20kt of
CO2eq per year compared to a baseline. A previous sample revealed that the
application of these thresholds captures 95% of all emissions from projects
financed directly. The data for 2012 were still under elaboration at the time
of the drafting of this report. As a matter of example the projects financed
under the Mandate in 2011 accounted for annual absolute emissions of 7.97 mn
tCO2eq. However the relative emissions of this same group of projects were
minus 1.58 mn tCO2eq (i.e. emission reductions compared to the baseline). 
2.2.        Development of social and
economic infrastructure
Over the years 2007-2012, the EIB has
provided more than EUR 23.2 bn for the financing of social and economic
infrastructure, including transport, energy, environmental infrastructure and
information and communication technology. 
Chart 3: Breakdown of energy and
transport signatures under Mandate and Facilities in 2007-2012
Since 2007, EIB has contributed to the
development of sustainable and secure energy systems that meet partner
countries’ economic, social and environmental needs, by providing more than
half of its energy lending for system expansion in terms of generation capacity
/ electricity production. Another 20% was invested in energy transmission and
distribution. Over the period, investments in renewable energy and in energy
efficiency represented approximately 55 % of total energy lending.
Developing more efficient sustainable
transport systems, offering upgraded networks and improved public transport
services have been priorities for EIB with over 80% of transport financing
aimed at improving roads, motorways, railways and urban transport. These
projects not only benefit the local communities by offering improved transport
networks, accessible and affordable transport services, reductions in traffic
congestion, fuel consumption, and air pollution, but the projects also generate
economic activity and contribute to a more sustainable development. Moreover,
improving transport networks is a crucial element in regional integration at
local, national and regional levels, thus supporting trade, employment
opportunities and social cohesion.
In 2012, EIB financed 34 projects across
all regions in support of social and economic infrastructure, predominately
under Mandate. 
·                        
Out of 9 energy projects signed, 6 concern
renewable energy, including the first tranche of EUR 100m (out of EUR 300m
approved) financing for the Ouarzazate Concentrated Solar Power Plant in Morocco, the first large-scale plant of this kind in North Africa. A EUR 75m framework loan for
financing small and medium-scale renewable energy and energy efficiency
projects in Turkey was the only energy investment under EIB own risk facilities
in 2012. 
·                        
Another 9 projects targeted the transport
infrastructure, mainly roads and motorways, almost exclusively under the
Mandate. Significant projects include the construction of two motorway sections
in Bosnia and Herzegovina, connecting the country with international transit
corridors to Croatia and Hungary, the construction of dual two-lane motorway on
new alignment bypassing Fier in Albania, the construction of a key link to the
motorway network in Morocco (Autoroute El Jadida) and the Georgia East-West
Highway project – all key in contributing to regional integration and economic
development in the regions. 
·                        
2 urban transport projects were financed for the
construction of a metro line in Ecuador and in Egypt that will provide improved,
accessible, affordable and efficient transport service in Quito and Cairo, alleviating urban congestion and pollution and promoting the use of public
transport, thus contributing to more sustainable development of both cities. 
·                        
7 operations supported environmental
infrastructure, more specifically water and sanitation, including a
rehabilitation of water supply, sewerage and sewage treatment facilities of 17
small towns throughout Armenia, benefiting approximately 300,000 inhabitants,
primarily lower-income groups, by improving the quality and continuity of water
supply as well as improving wastewater collection and treatment. 
·                        
The EIB’s support to the development of
knowledge economy and social infrastructure is highlighted by two large-scale
programmes implemented with the Scientific and Technological Research Council
of Turkey (Tübitak), which aim at strengthening the country’s research and
innovation capacity. 
·                        
2 projects, one in Brazil and another in Turkey,
were financed in support of information and communication technology by
increasing the capacity and extending the geographical coverage of broadband
networks and developing new technologies and services by facilitating the local
business environment.
2.3.        Local private sector
development, support to SMEs 
In many countries covered by the Decision,
long-term funds are in short supply which creates a serious obstacle to private
enterprise expansion. The purpose of EIB's lending is to help overcome such
local market gaps. SME investment projects are mostly too small to justify a
direct EIB intervention but can be handled by local banks. These projects may
receive indirect support from the EIB in the form of global loans, i.e. credit
lines opened to certain intermediary banks for a number of small and medium
sized projects which remain to be identified by the intermediaries within a
given allocation period. 
Partner banks are carefully selected by the
EIB, notably regarding their capacity to assess projects and their compliance
with international regulations against fraud and other prohibited practices.
The intermediary banks on-lend the EIB’s long-term funds to private enterprises
subject to their own project and borrower appraisal, and to an allocation
decision by the EIB in respect of the proposed investment projects. The
intermediary banks assume detailed reporting obligations on projects and
end-borrowers. They often provide in parallel loans (usually of shorter term)
from their own resources. Subsidiaries of European banks, affiliates of
regional banking groups as well as local banks count among the EIB’s global
loan partners. At the end of 2012, the EIB authorised the “Loan for SMEs and
Mid-Caps” product to be used in all regions outside the EU, which had been
successfully pioneered within the EU since 2008, later also in the
Pre-Accession region and in some countries of the Eastern Neighbourhood. This
product allows for more flexible funding of individual projects. 
Over the past three years, the EIB has
provided a total of EUR 4.5 bn in long-term finance via credit lines to
financial intermediaries, reaching more than 14,000 SME and MidCap
beneficiaries in the regions covered by the Decision. While Pre-Accession
countries received more than 80% of this volume, the Eastern Neighbourhood
recorded the strongest growth in signatures with 6 new loans signed in 2012
totalling EUR 500 mn of which EUR 350 mn targeting SME beneficiaries[1]. In Turkey, the number of intermediaries has been increasing over
the years, with the aim to ensure a good geographical coverage of attribution
of EIB funds throughout the country.
Table 4: Credit lines for SMEs and
MidCaps in 2010-2012
Allocations of funds made in 2012 under
credit lines amounted to EUR 1.7 bn, contributing to almost 4,800 investment
projects undertaken by SMEs and MidCaps with total investment cost of EUR 3.6 bn.
In the SME segment, i.e. enterprises of less than 250 employees, the average
allocation size was EUR 315,000, and half of the allocations were smaller than
EUR 50,000. A limited number of allocations (6%) went to MidCaps, i.e
enterprises of between 250 and 3,000 employees. In this segment, the average
allocation size was EUR 1.5 mn. Larger allocations with individual size of more
than EUR 3 mn represented only 3% of the total number of allocations made.
Certain credit lines, in particular those signed in 2011 and 2012 with the
ProCredit Group in several Eastern Neighbourhood and Pre-Accession countries
were particularly successful in addressing the lower end of the SME target
group. The first allocations under these credit lines materialised quickly and
a year after signature, already 330 allocations had been made. 65% of these are
in support of enterprises of less than 10 employees. 
EIB funding through credit lines supports a
diversified range of activity sectors. The largest in 2012 were manufacturing
(37%), agro and food processing (15%), commerce (12%), hotels and tourism
(11%), energy (8%) and construction (5%). More detail on the expected results
of EIB support to SMEs based on credit lines approved in 2012 is provided in Section
3.
Apart from intermediated lending, the EIB
also supports local private sector development through direct loans to larger
private enterprises, mainly in the industrial and services sectors. These
investments often induce employment and investment effects also in the local
supplier base. Direct lending to local private sector is essentially provided
at EIB’s own risk under the Pre-Accession Facility (EUR 440 mn signed in 2012)
or under the Decision in Pre-Accession (EUR 175 mn) and Mediterranean countries
(EUR 328 mn).
Besides long-term lending, the EIB invests
in funds which provide equity to SMEs as well as to micro-enterprises. Such
investments are carried out not from EIB’s own resources, but using third party
money, such as the EU budgetary funds for risk capital operations under the
European Neighbourhood Partnership Instrument. This is in consideration of the
high-risk nature of the operations and the fact that the EU Guarantee under the
Mandate only covers political risks. 
In 2012, 19 SME-focused equity funds were
in their investment phase, investing some EUR 100m in favour of SMEs in the
Mediterranean region. At the end of 2012, the stock of investments being held
and actively followed up by the funds' management comprised 142 investee
companies. Considering that EIB is known as one of the key investors in SME
funds in Mediterranean countries, its participation encourages contributions
from other sources. Based on existing stock, EIB participation has a leverage
effect of 5.3x in the Mediterranean equity funds.
The Bank also uses the EU’s loan-grant
blending mechanisms to finance technical assistance to banks, micro-finance
institutions and SMEs. Implementation of such support schemes in the
Mediterranean region went ahead in 2012 and included MicroMed, a large
technical assistance scheme to support microfinance institutions in Tunisia
(EUR 4m of which half funded by Luxembourg). The potential for Mesofinance - a
bridge between microfinance and the banking sector - is being studied for the
whole region. As mobile finance is making great progress, EIB presented the
first regional study on this topic during a workshop in November 2012 and is
preparing a working group and further technical assistance for the region in
the context of the Deauville Partnership.
2.4.        Contribution to other
aspects – Regional integration and European FDI
Regional integration has been supported
mainly in EIB financing of social and economic infrastructure. Over the past
six years, EIB has financed 26 projects (EUR 2.5 bn) contributing to regional
integration, of which 45% was signed in the Mediterranean countries, followed
by 42% in Pre-Accession. Promotion of the regional integration dimension was
one of the reasons for developing the Western Balkans Investment Framework
jointly by the Commission, the EIB, the EBRD, the Council of Europe Bank and
other donors. Besides the more traditional financing of integrated regional and
cross-border networks of transportation and energy, EIB projects fostering regional
integration include certain information and communications technology projects
as well as investments for the development of knowledge economy, particularly
scientific research, tertiary education, innovation and the financing of
academic research programme promoting the integration with the European
Research Area. 
By foreign direct investment, the EIB is
supporting the internationalisation of the EU economy, which aims at promoting
EU competitiveness while bringing substantial benefits to the economies outside
the EU. Over the past six years, the EIB has financed 30 projects (EUR 3.8 bn)
in Pre-Accession, Mediterranean and Latin America, mostly in the energy,
industry, and telecommunication sectors. Turkey and Brazil are by far the
largest recipients of EIB supported FDI with a combined inflow of EUR 1.7 bn
(45% of total FDI) between 2007-2012. In 2012, five projects (EUR 474 mn)
supported EU FDI including mobile broadband network project in Brazil, R&D
and start-up of electric vehicle infrastructure and service scheme in Israel,
modernisation of a plant producing a redesigned range of light and medium-sized
commercial vehicles in Turkey and two projects in Morocco (automotive industry
and technology parks), all of which support the development of private sector
economic activities in the regions. 
3.           Actual and Expected Results of EIB
operations: REM 
3.1.        The REM framework 
In line with the
former frameworks, projects are rated according to three “pillars”:
·                        
Pillar 1 rates the expected contribution to the
three high level objectives mentioned in section 3.2, as well as to the
countries' and EU priorities. As the distribution of Pillar 1 ratings shows,
more than half of the operations approved are expected to make an excellent
contribution to mandate objectives, meaning that they are not only fully in
line with the objectives for that region, but they are also aligned with the
countries’ development objectives and the EU priorities for the country and/or
region. Those projects that will make a “good” contribution are in line with
mandate objectives but not necessarily featuring as high priority in terms of
the country’s own development objectives or those of the EU.
·                        
Pillar 2 measures the expected results, the
quality, and the soundness of projects. Nearly 20% of operations approved
received an excellent rating, indicating that results, either in terms of net
economic gains to society (for direct projects) or results of intermediated
operations are expected to be excellent, i.e. economic rate of return (ERR)
greater than 15%. More than 80% of operations are expected to be “good”, with
an average ERR of 10% to 15%.
·                        
Pillar 3 measures the EIB’s expected
additionality which inlcudes, inter alia, how the capacity of the beneficiaries
of EIB financing is expected to be reinforced also with technical assistance.
About 17% of operations approved this year are expected to have high
additionality – typically, extending the longest maturity of debt available to
the borrower from the market by more than 100%; matching economic life of the
assets to be financed by at least 80%; taking a lead role in project
preparation, structuring and/or implementation support. Another 67% are
considered good, providing significant additionality – typically, combining
significant financial additionality with significant technical and sector
contribution or standards and assurance. The 16% of approved operations that
were rated as expecting moderate additionality were typically standard products
where limited contribution to project design, structuring or implementation was
necessary.
The three pillars
of the REM are based on a logical framework approach, which serves to show how
EIB inputs (e.g. loan), generate outputs (e.g. an electricity transmission
line, a training programme), which enable outcomes (e.g. improved access to
energy, improved institutional capacity) and, over time, lead to impacts
(development of economic infrastructure, regional integration) which are in
line with the Bank’s mandate objectives. 
Figure
1: REM conceptual Framework
Pillar ratings are
assigned according to a four-point scale (4-excellent, 3-good, 2-acceptable,
1-marginal)[2] and are based on a series of objectively measurable indicators and
guidelines. No overall project rating is provided. An example of the REM
framework applied to an EIB project is included in Annex. 
The REM framework
provides an assessment of project results throughout the lifecycle. At the
outset, standardized and monitorable indicators are identified, with baselines
and targets that capture expected economic, social, environmental, and
governance outputs and outcomes of the operation. Achievement against these
specified benchmarks will be monitored throughout the project life and will be
reported at two milestones -- at project completion and 3 years after project
completion (“post completion”) for direct operations, and at the end of the
investment (or allocation) period and end of life of the fund for indirect
(intermediated) operations. REM indicators will also be used for ex-post evaluation.
REM results indicators are - to the extent possible - being harmonised with
other International Financial Institutions to simplify client reporting
requirements for co-financed operations.
3.2.        Actual results based on
selected case studies
Four case studies are presented here to
provide examples of actual results achieved by implemented projects following
the REM methodology. As they were approved before the introduction of the REM
framework, no REM assessments were carried out at the approval stage. During
the first couple of years, the REM framework will not produce actual results
until they can be measured for the projects approved under the new framework.
During this time, the reporting on actual results will be based on selected
case studies.
MANILA WATER COMPANY – SUPPORTING
DEVELOPMENT OF ECONOMIC INFRASTRUCTURE 
Project Description
The Manila Water Company (MWC) provides
water and wastewater services to over 6 million people in the East Zone of
Manila, the capital of the Philippines. The growing population and the
increasing number of households connected to the water system in Metropolitan
Manila lead to the growing demand for water supply services. Population groups
who do not have access to direct connections with the city water system have to
purchase bottled water and water from commercial vendors at a much higher cost
than municipal water or use water from contaminated sources. The objective of
the project was to continue MWC’s improvements to the water supply service in
eastern Manila and bring clean water and sanitation to population groups not
yet served. The EIB loan of EUR 60m over 10 years helped finance a capital
investment programme with a total cost of EUR 157m.
Table 5: Project Results Summary – Manila Water
Company
 Outputs || Outcomes || Impacts 
 All water treatment plants were renovated 223 km of pipeline replaced 3,850 km of pipeline expanded and rehabilitated 710,000 service pipes replaced 249,000 additional connections installed || 100% compliance with water quality standards 1,120 m litres clean water delivered per day (increase of 233 MLD) 1.1 m additional people with access to clean water at an affordable cost Of these, 900,000 people in low-income households. 99% of households with water available 24 hrs./day Non-revenue water decreased from 34% to 11% || Improved health Decrease in outbreaks of diseases Better quality of life Greater proportion of household budget available for other uses Positive environmental impact of more efficient water use 
TUNISIA HEALTH I (SANTÉ TUNISIE I) - SUPPORTING
DEVELOPMENT OF SOCIAL INFRASTRUCTURE 
Project Description
This project focused on modernising the
hospital infrastructure and equipment for diagnosis and treatment in 30
hospitals throughout Tunisia, in response to the increasing reliance on hospital-based,
specialised services in the country and the priority of the Ministry of Health
(MoH) to reduce infant and maternal mortality. The project comprised a EUR 110m
loan to the MoH and the Ministry of Equipment, used to purchase equipment (EUR
80m) and renovate hospital buildings (EUR 30 m). The total project cost was EUR
224.5m, of which the Government contributed 51%.
Table 6: Project Results Summary -- Santé Tunisie I
 Outputs || Outcomes || Impacts 
 State of the art equipment installed in 30 Tunisian hospitals 230 haemodialysis machines available per million inhabitants 12.4 CT scanners available per million inhabitants 30 hospitals in Tunis and other Governorates expanded and modernized 59 specialists available per 100,000 inhabitants 373 paramedics per 100,000 inhabitants || Approx. 4,500 scans per year performed with each machine Public health expenditure increased from 5.6% of GDP (2003) to 6.2% of GDP (2011) 4,000 new jobs created in health sector || Through coordinated actions with MoH, contributed to: improved health care standards; improved health of population decreased maternal and infant mortality 
VOIRIES PRIORITAIRES IV - SUPPORTING
ECONOMIC INFRASTRUCTURE 
Project Description
The project objective was to improve the
urban road infrastructure in Tunisia; it consisted of five sub-projects in
Greater Tunis and three sub-projects on arterial roads in the vicinity of other
major cities. The interchanges, new roads and road widening in Greater Tunis
entailed improvements to key roads that are subject to very heavy traffic and
increasingly heavy traffic jams. The other three subprojects involved the
construction of urban bypasses at Sahline, Ksar Hellal-Moknine and
Médenine. By reducing congestion and facilitating
traffic flows the project has created considerable economic, social and
environmental benefits for the country.
Table 7: Project Results Summary – Voiries
Prioritaires IV
 Outputs || Outcomes || Impacts 
 13 km of roads constructed in Greater Tunis 13.5 km of interchanges and bridges reconstructed 21.9 km of roads upgraded and with improved lighting and drainage 24.5 km of bypasses constructed around Sahline, Ksar Hellal-Moknine and Médenine || Travel time savings estimated at a value of EUR 454 m p.a. Travel time savings for working commuters at peak traffic estimated at average 1 hour/day Vehicle operating cost savings estimated at EUR 93 m p.a. Lower CO2 emissions, according to ex-post Environmental Impact Assessment (EIA) Road fatalities saved -- estimated at 18 p.a. ERR: 16% (sub-projects range from 13% to 28%) 2,100 man/years created during construction; 50 permanent jobs after completion || Improved traffic conditions and reduced congestion Improved traffic flow and connectivity among four Tunis districts Improved business environment. Improved living conditions for the population of Greater Tunis Regional integration: improved links with neighbouring Algeria and Libya 
MOBIASBANCA–SOCIETE GENERALE -- LOCAL
PRIVATE SECTOR DEVELOPMENT, SUPPORT TO SMEs 
Project
Description
The project objective is to promote private
sector development by supporting micro, small and medium enterprises (MSMEs) in
Moldova through a EUR 20m credit line to Mobiasbanca – Société Générale
(MBSG). Moldova’s banking market was concentrated on large firms and the public
sector, with scarce availability of long-term financing for MSMEs. This project
aimed at supporting MSMEs by extending the maturity of the Bank’s funding base
and lowering the cost, thus providing a source of longer-term funding for MSMEs
permanent working capital and long-term investments.
Table 8: Project Results Summary --
Mobiasbanca–Société Générale
 OUTPUTS || OUTCOMES || IMPACT 
 Longer-term funding of MBSG increased by EUR 20 m || 117 loans to MSMEs (of which 6 micro, 111 SMEs) 5 start-up companies financed Average loan size EUR 88,000 Total disbursed EUR 20m; last disbursement on April 2012. Average loan tenor weighted by loan size: 51 months Average cost savings to MSMEs -- 204 bps MBSG improved reporting and accountability Financial performance of MBSG improved (ROE from 0.9% in 2009 to 7.9% in 2012; Capital Adequacy Ratio from 37.1% to 44.5%) 491 jobs sustained. || Strengthened financial performance and improved competitiveness of MSMEs.   Capital markets better developed   Increased access to financing for MSMEs, leading to higher GDP growth 
 Additionality
Key aspects of the contribution of the four
case study projects in terms of additionality (Pillar 3) are summarised in the
table below. EIB funding extended loan terms by at least two times the
commercially available maturities, thus improving the asset matching profile of
investments. Compared with total project value, leverage was 2.0 to 2.5 times
EIB’s contribution. Resource mobilisation was significant in MWC (water) and
MBSG (banking), with successful private funding participation. Public funding
matched EIB resources in the two infrastructure projects in Tunisia. There was
cooperation with other IFIs in all four cases.
Table 9: EIB Additionality in case study
projects
   || Maturity Extension || Asset Matching Improvement || Leverage || Private Funding || IFI Cooperation 
 Manila Water || 2.0x || Ö || 2.5x || Ö || IFC 
 Santé Tunisie || 2.0x || Ö || 2.0x ||   || IBRD 
 Voiries Prior. || 2.5x || Ö || 2.0x ||   || AfDB 
 MBSG || 2.0x || Ö || 2.0x || Ö || EBRD 
3.3.        Expected development
results of EIB operations approved in 2012 
In 2012, the EIB approved 90 operations
totalling EUR 8.1 bn outside the EU (including ACP). 69 operations totalling
nearly EUR 7.1 bn were approved in the regions covered by the Decision. Of
these, 39 operations (EUR 4.4 bn) were approved under the EU guarantee and 27
(EUR 2.6 bn) under EIB own-risk facilities. Most of the operations (22; EUR 2.4
bn) to be financed at EIB own risk will be financed under the Pre-Accession
Facility, while the others (5; EUR 260 mn) will be financed under the Energy
Sustainability Facility. Finally, 3 operations (EUR 39 mn) will be financed
with third party resources[3] .
Out of the 69 approved operations, 50 were
either direct projects supporting infrastructure development or indirect
projects supporting micro, small and medium-sized enterprises (MSMEs), the two
main focus areas of EIB intervention. Of the 32 infrastructure operations, 9
direct and 5 indirect projects were for energy, mainly electricity production,
transmission and distribution, and 12 were for transport -- roads, railways,
air traffic and urban transport. Of the latter, the financing of the Cairo
Metro (EUR 600 mn) was the largest single project approved in 2012. Credit
lines to intermediaries for on-lending to MSMEs accounted for 28 of the
approved operations.
In terms of regional distribution, the
largest amounts approved were for the Pre-Accession region (EUR 3.0 bn) and
Mediterranean countries (1.77 bn). There were significant sectoral differences
between regions, for example, in the Pre-Accession region, more than half of
approvals were for support to SMEs, reflecting the importance of supporting the
private sector for economic growth and convergence with the EU. 
The 69 operations approved in 2012 covered
28 countries, in addition to several regional projects. 15 projects (EUR 2.0 bn)
were approved for Turkey, other important countries in terms of approvals
included Egypt (EUR 650 mn), Ukraine (EUR 637 mn), Croatia (EUR 562 mn) and
Morocco (EUR 463 mn).
3.3.1.     Expected Contribution to
EIB’s objectives and EU priorities (Pillar 1)
Pillar 1 assesses the extent to which
approved projects are expected to contribute to the three high-level and one
cross-cutting objectives of the Mandate. Nearly two-thirds of projects approved
in 2012 will contribute directly to more than one objective. More than 70% of
operations are expected to contribute to private sector development and nearly
60% to the development of social and economic infrastructure. It is expected
that 35% of projects will contribute to climate change mitigation and adaptation,
while 30% will contribute to regional integration.
Chart 4: Contribution to mandate objectives – Number
and Percentage of Projects
 Chart 5: Projects contributing to social and economic infrastructure by sector || Chart 6: Projects contributing to local private sector development by type of operation || Chart 7: Projects contributing to climate change by sector 
 || || 
As chart 5 shows, the projects contributing
to the social and economic infrastructure comprise both direct infrastructure
development projects, mainly transport and energy, but also services and water,
and indirect (intermediated) operations providing loans to SMEs and mid-caps,
which will finance priority projects to extend and strengthen local and
regional infrastructure in areas such as transport and renewable energy.
Chart 6 shows the projects contributing to
local private sector development, in particular support to SMEs. The majority
of these are the indirect operations that provide loans to financial
intermediaries for on-lending to MSMEs or invest in private equity funds, but
about one third of them are direct projects that also contribute to private
sector development, by supporting manufacturing, SMEs, particularly in the
energy or tourism sectors, or research and development leading to improved
products.
Chart 7 shows that approximately 40% the
operations contributing to climate change mitigation are in the energy sector,
including projects such as the Bangladesh power energy efficiency project, two
hydropower projects in Costa Rica and El Salvador, and a number of
intermediated loans to support investments, which contribute to climate change
mitigation through projects in the renewable energy and energy efficiency
sectors. Of the 12 operations approved in 2012 for Asia and Latin America
(ALA), 10 will contribute to climate change adaptation or mitigation,
reflecting the emphasis on climate action in the ALA region.
3.3.2.     Expected development
results of operations approved in Mandate regions in 2012 (Pillar 2)
This section analyses by sector the
expected results for projects approved in 2012 by the Bank for regions covered
by the Mandate in terms of the inputs, expected outputs and outcomes. Table 10 summarises
the REM standard sector indicators and values. Potential longer term impacts
are described wherever possible.
Energy: In
2012, the EIB approved 14 loans in the energy sector (total EIB financing EUR
1.3 bn; total project value EUR 3.2 bn), comprising 9 direct operations and 5
loans to intermediaries for on-lending, which address different aspects of
energy production, transmission and distribution, as well as energy efficiency.
Expected outputs are significant system expansion (7 projects - 1500 MW
additional capacity; 3 projects – 6000 km of additional power lines) resulting
in outcomes of more reliable energy produced and delivered to more consumers
(153,000 additional households). The credit lines are earmarked for on-lending
to SMEs for projects in energy efficiency and renewable energy sources. Energy
projects also contribute to wider economic, social and environmental impacts.
By promoting the use of renewable energy sources - solar, wind, geothermal and
hydropower, energy efficiency and the replacement of fossil fuels, the EIB
supports climate change mitigation by reducing the production of greenhouse
gases (GHG).
Transport:
In 2012, EIB approved 12 investment loans totalling EUR 1.5 bn, which will
support projects costing a total of EUR 5.2 bn, in the subsectors roads,
railways, air and urban transport. Expected outputs include upgraded transport
networks and more efficient public transport services, resulting in increased
capacity, with reductions in traffic congestion, fuel consumption, and air
pollution, as well as time savings for passengers and freight. Upgrading road
corridors and border crossings will promote trade and regional integration; the
railway projects will reduce transport costs and promote the switch from road
to rail transport; the air transport projects aim at improving air traffic
management and increasing safety; and the metro projects will provide more
capacity, safety and efficiency, and encourage modal shift from cars and buses.
For the urban transport schemes, the population potentially benefitting from
access to improved services is based on catchment populations and for this
reason, the number of people served by these projects, as reflected in Table 10,
is of an order of magnitude higher than for projects providing direct
interventions.
Water, sewerage and waste: EIB approved 3 loans in the sector (total EIB loans EUR 147 mn;
total project value EUR 304 mn). Two projects will provide access to clean
water and improved sanitation and the third one will help to protect people and
their land from the potentially disastrous effects of floods. Expected outputs
are extension of supply networks, upgrading and expansion of water and sewage
treatment plants, improved sanitation and environmental protection. Expected
outcomes include additional households provided with safe water and sanitation
services, annual increases in treated water and sewage, reduction in water
losses, water resources protected and managed, and populations protected. 
Urban development and housing: Urban areas, which are key drivers for economic growth and
employment, require adequate public infrastructure and services, as well as
affordable housing. Two EIB urban development loans were approved in 2012
(total EIB loans EUR 120 mn; total project value EUR 400 mn), which will not
only benefit the population living in the areas served by the improved local
services, but also help develop local SMEs, create jobs in construction,
services and related sectors, attract private sector investment and support
economic growth. For the urban development schemes, the population
potentially benefitting from access to improved services is based on catchment
populations and is therefore higher than for projects providing direct
interventions. 
Health and Education: The one direct operation for health and education approved in 2012,
(EIB loan EUR 300 mn; total project value EUR 660 mn), improves the structural
resilience of health and education buildings that are vulnerable to earthquakes
in Istanbul, Turkey, thus ensuring more sustainable provision of essential
services. In Table 10, the number of additional patients treated per year in
these improved facilities is the aggregate value including inpatients, day
cases and outpatients treated. 
Manufacturing industries, which employ a large share of the labour force, are crucial for
economic growth and a modernising economy. EIB is supporting 5 projects (total
loans EUR 415 mn; total value of projects EUR 1.2 bn) contributing to
manufacturing production, promotion of innovation and the introduction of new
technologies. The expected outputs of these projects are increased production
capacities installed, while the outcomes are the additional production volumes
expected. 
Services
(including Research and Development): These include facilities such as hotels
and restaurants (1 project), research and development operations (3 projects),
and a services fund. The expected outputs and outcomes for hotels are increased
accommodation, job opportunities and local demand for services, and in the
longer term a stimulus for local economic activity and diversification. The Research
and Development projects help countries modernise their industries and
services, promote innovation and employ clean technologies.
Telecommunications is a crucial component in developing economic and modern
infrastructure services and plays a significant role in regional integration.
EIB supported this sector through a loan to an R&D operation (EUR 70 mn)
and investment in a private equity fund (EUR 4 mn). 
Agriculture, forestry and fishing: Three EIB projects (total EIB contribution EUR 70 mn; total
project value EUR 297 mn) were approved in 2012. Two are for private equity
funds that will invest in forest protection, thus contributing to climate
change mitigation, and the third aims at improving irrigation and water
economy. The wider impacts of these projects include promotion of sustainable
livelihoods, climate change mitigation, biodiversity conservation and improved
natural resources management, as well as catalysing private sector involvement
and investments.
Overall contributions to expected results
A wide range of indicators have been
employed to describe the projects referred to above and their expected outputs
and outcomes. Many are project specific, but some are more widely applicable.
However, care must be taken in attempting to aggregate the results (expected
and ultimately achieved), as the definitions of what they cover may be
different, as explained in the sections above. Comparison of outcome indicators
across sectors is not recommended, as these can be specific to each sector and
the sample (comprising only projects approved in 2012) is too small to draw
conclusions and avoid distortions.
Table 10 below summarises the expected
results for the operations approved in 2012 under three key headings: Customers
reached (Direct provision of services); Access to improved services (Indirect
provision); and, Additional production or quantity of services produced.
Table 10: Expected Project Results Summary
 Outcome Indicators || No. of Projects || Expected Results 
 Customers reached with improved services (direct) 
 Additional households connected to electricity (Hh) || 2 || 153,000 
 Additional households connected to water services (Hh) || 1 || 3,000 
 Additional households connected to sewers (Hh) || 1 || 400 
 Population with access to improved services (indirect) 
 Improved urban transport services (No.) || 2 || 4,380,000 
 Reduced risk of flooding (No.) || 1 || 97,000 
 Health – additional patients treated (No./yr) || 1 || 740,500 
 Urban development – new infra service coverage (No.) || 3 || 3,413,000 
 Additional production or services delivered (annual) 
 Energy produced and/or transported (GWh/yr) || 10 || 56,500 
 Transport -Increase in passengers served (No/yr) || 1 || 30,000 
 Transport- Increase in freight services provided etc. (Tonnes/yr) || 2 || 1,300,000 
 Industry - additional annual production (Tonnes/yr) || 3 || 2,301,500 
Support to SMEs
In 2012 the Bank approved 21 loans through
financial intermediaries (FIs) for on-lending to support small and medium
enterprises (SMEs) and mid-caps, providing loans with a longer tenor, at
attractive interest rates and often in local currency. These operations are
expected to contribute to relieving significant constraints regarding access to
finance, strengthen businesses and contribute to private sector development.
Table 11: Expected Results of Support to
SMEs 
 EUR billion ||   || ALA ||   || EAST ||   || MED ||   || Pre-Accession ||   || TOTAL 
 EIB financing approved ||   || 0.2 ||   || 0.6 ||   || 0.2 ||   || 1.6 ||   || 2.6 
 Total on-lending ||   || 0.5 ||   || 1.2 ||   || 0.4 ||   || 2.5 ||   || 4.6 
 Thousands ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 Number of Loans ||   || 6.4 ||   || 2.6 ||   || 0.3 ||   || 17.0 ||   || 26.2 
 Jobs sustained ||   || 47.0 ||   || 68.0 ||   || 38.4 ||   || 224.6 ||   || 377.9 
Table 11 shows that more than 60% of the
resources approved for lending to SMEs went to Pre-Accession countries (EUR 1.6
bn) , and the region with the next largest share was the Eastern Neighbourhood
and Russia. The EUR 2.6 bn of credit lines approved for SMEs are expected to
generate about 26,000 loans to final beneficiaries for a total on-lent amount
of EUR 4.6 bn. The average tenor of loans to final beneficiaries is more than
10 years, improving access to much needed long-term resources which are
generally not available in these markets. The 21 credit lines for SMEs approved
this year are expected to support roughly 782,000 jobs of which approximately
463,000 in Pre-Accession countries. 
The Bank also approved an innovative
guarantee instrument designed with other IFls (SME Guarantee Facility) for EUR
120 mn for the Mediterranean region. This mechanism is a risk-sharing facility
that provides the intermediary banks with a partial risk guarantee covering up
to 50% of the principal losses incurred under their portfolios of eligible SME
loans. 
In the Western Balkans, the EIB Group,
together with the Commission and EBRD, launched in December 2012 the Enterprise
Development and Innovation Facility (EDIF) initiative aiming to promote the
emergence and growth of innovative, high-potential SMEs. It will complement the
SME lending activities with venture capital, equity and guarantees.
Support to Microenterprises through
Banks and Microfinance Institutions
In 2012, the EIB approved one loan for a
microfinance facility in the regions covered by the Mandate: the “Mediterranean
Microfinance Facility II” (EUR 15 mn). This operation will increase the
availability of local currency funding for four to six microfinance
institutions, which are expected to provide 35,000 to 40,000 loans, with an
average loan size of EUR 800, to microenterprises in the region, thereby
contributing to the promotion of entrepreneurship, job creation and economic
growth in the Mediterranean partner countries.
Private Equity Funds
During 2012, EIB approved investments in
four Private Equity Funds for EUR 51m, which are expected to mobilise a total
of EUR 350 mn. The sectors that these equity funds target are forestry, ICT and
SMEs. These four funds are expected to reach approximately 46 investee
companies with an average investment size of EUR 7 mn, and generate about 2,800
direct jobs. The expected impact of the investments is significant in terms of
leverage of EIB contribution (6 x) vis-à-vis the total project values, and the
catalytic effect of private sector equity mobilisation. 
Jobs
Of the 37 direct operations approved, 19
are expected to create roughly 6000 new permanent full-time jobs during
operation. In addition, 33 are expected to create roughly 260,000 person-years
of employment during construction - or 260,000 temporary jobs. Moreover, the 26
intermediated operations are expected to support an additional 898,000
permanent jobs.[4]
Table 12: Expected employment impact of EIB operations

  OUTPUT INDICATORS || VALUES || Number of projects 
 Employment - during operation (#FTE, Thousands) || 6 || 19 
 Employment - during construction (Person-years (N°), Thousands) || 262 || 33 
 Jobs sustained through intermediaries (Thousands) || 898 || 26 
3.3.3.     Quality of operations
Overall Assessment (REM Pillar 2)
Pillar 2 rates the quality and soundness of
an operation and its ability to achieve the expected results. For direct
operations, the pillar 2 rating is based on the soundness of the project, the
financial and economic sustainability and the environmental and social
sustainability. For indirect projects, the rating is based on the expected
results, weighted by risk considerations as measured by the soundness of the
intermediary and the quality of the operating environment. 
As Chart 8 shows, the expected overall
quality of the projects approved in 2012 was rated as good or excellent. There
were some sectoral differences, although given the limited number of projects
per sector, it is not possible to establish general trends at this stage,
except to note that the social infrastructure sectors (water, health and
education) typically have lower rates of return than economic infrastructure
(energy, transport and manufacturing). Credit lines to SMEs were less likely to
receive an excellent rating. This was either because they were already in developed
financial markets and were therefore not expected to have a significant impact
on increasing access to finance or developing the financial sector (e.g. in
Pre-Accession countries) – or because they were in riskier operating
environments and therefore the likelihood of outcomes being achieved was lower
(e.g. some Mediterranean countries). 
Chart 8: Pillar 2 ratings by sector
Economic and Financial Sustainability
For direct projects, the financial rate of
return (FRR) and the economic rate of return (ERR) are measures of the
financial and economic sustainability. Overall, with an average FRR of 10.3%
and ERR of 15.3%, operations are expected to be financially and economically
sustainable. For indirect projects, the average expected rates of return on equity
(ROE), at 12.8%, are higher than their opportunity costs and sufficient to
sustain EIB’s support program for SMEs. The portfolio soundness of the
financial intermediaries, measured in terms of expected non-performing loans
(NPLs) of 5.9%, is higher than for investment grade banks, reflecting the
relatively higher market operating risk. With an expected average (CAR) of
18.9%, financial intermediaries seem adequately capitalized. 
Environmental and Social Safeguards 
The EIB requires that all the operations it
approves comply with its environmental and social standards. In addition, some
projects that the Bank finances make a positive contribution to either the
protection and enhancement of the environment or to the promotion of
sustainable communities. The overall environmental and social assessment rates
the acceptability of a project for EIB financing in terms of its expected
environmental and social impact, including the residual impacts, legal
compliance, environmental management, and any significant social issues. All
projects approved in 2012 have been rated either good or excellent in terms of
environmental and social safeguards.
Regarding indirect operations, loans
through financial intermediaries are required to finance SMEs that comply with
EU or international environmental and social standards, which is reflected in
the satisfactory rating given to loans to most financial intermediaries
supporting SMEs. 
Energy efficiencies
For every project approved, expected energy
efficiency gains attributed to the project have been calculated either as the
difference between general energy consumption before and after the project or
as reduction of energy consumption per unit of output. There are 15 projects
(out of a portfolio of 69 projects) which are expected to deliver energy
efficiency gains during the whole lifetime of the project. 
Energy efficiency gains are produced by
different types of projects. In the electricity sector, these efficiencies are
produced by improvements in the networks (transmission and distribution) which
reduce technical losses, or through the modernisation or replacement of
production equipment/plants by new equipment/plants which are more efficient.
Further efficiency gains are achieved through the insulation of buildings. Other
sources of energy efficiencies will be in the transport sector. The replacement
of individual transport (mainly cars) by public transport systems will lead to
significant energy efficiencies.
Human Rights
As an EU body, EIB is legally bound to the
provisions of the Charter of Fundamental Rights of the European Union,
including the commitment to upholding human rights. EIB’s understanding of
sustainable development is guided by a human rights-based approach, and this is
reflected in the EIB’s aim to have a transparent, responsible attitude to its
project financing. Human rights considerations are already an integral feature
of the EIB Social Standards: at a general level, the EIB “restricts its
financing to projects that respect human rights”[5] and this is partly achieved by excluding specific types of projects
or activities from EIB financing.[6] More specifically, at project appraisal level, a number of Human
Rights considerations, including economic environmental and social rights, are
integrated into the five existing “Social Assessment Guidance Notes” (SAGNs)
appended to the “Environmental and Social Practices Handbook”.[7]
In 2012, the EIB completed a Human Rights
Gap Analysis exercise with the aim to assess the existing SAGNs against
European and international human rights instruments and provisions and,
thereby, to help determine the degree of relevance and of compliance of these
EIB SAGNs, as well as identify potential areas for alignment improvement. The
outcome of this exercise is guiding the on-going review of the SAGNs. It is
expected that the recasting of the SAGNs later in 2013 will be an important
step in the process of further mainstreaming human rights considerations from a
practical point of view into EIB financing activities. 
Furthermore, the development of the REM
framework is considered to be an important building block in the Bank’s
enhanced due diligence on, and monitoring of, social aspects, human rights
considerations, corporate social responsibility, decent work, environmental
principles and good governance in its projects financed. 
3.3.4.     EIB
Additionality (Pillar 3)
Within the REM framework, Pillar 3 measures
the financial and non-financial additionality of EIB operations, covering the
necessary inputs brought by EIB that could not be provided by market
alternatives. The three areas of EIB additionality are financial, technical,
and standards and assurance.
Financial additionality
Financial additionality comprises the
extension of typical maturity, match with asset life, local currency funding,
grant element and innovative product. As the table below shows, infrastructure
projects, which typically have a long asset life, benefit from the longest
financing, with an average tenor of more than 19 years, while the average loan
tenor provided to financial sector clients in 2012 was 11.8 years. In table 13 below,
the average tenor of EIB loans is compared to typical tenors estimated to be
otherwise available.
Table
13: EIB Financial Additionality – Average term of financing (2012 approvals)
     || EIB Tenor (years) || Typical tenor (years) || Extension factor 
 Infrastructure || 19.1 || 8.4 || 2.3 x 
 Intermediated loans || 11.8 || 4.4 || 2.7 x 
 Manufacturing || 8.9 || 4.3 || 2.1 x 
 Other || 10 || 5.7 || 1.8 x 
Where relevant instruments are available,
significant additionality is also achieved through blending. This is the case
for 10 (14.5%) of the projects approved in 2012, corresponding to total EIB
loans of nearly 1.0bn.
Technical and sector contribution 
In addition to financial additionality, EIB
provides advisory services in those areas in which it has specialised
expertise, e.g. infrastructure, energy efficiency, environmental capacity
building, climate adaptation and financial intermediaries. The technical and
sector contributions captures EIB’s improvement of project characteristics in business,
developmental, social, environmental or corporate governance terms, including
through the use of Technical Assistance. This is of particular importance to
the Mediterranean region where 50% of approved projects will receive “high” or
“significant” levels of technical contribution.
Standards and assurance
This rating covers added value in terms of
demonstration effects, structuring, raising environmental, social, governance
and procurement standards, mobilizing other financial resources and cooperation
with other IFIs. Two thirds of projects were rated high or significant on these
aspects, while one third was expected to have moderate results.
Resource
Mobilisation
EIB operations approved in the regions
covered by the External Mandate in 2012, totalling EUR 7.1bn, will contribute
to projects with an expected total value of EUR 18.2bn. This mobilisation of
EUR 11.1bn represents a leverage of 2.7 times the EIB contribution. Chart 9 below
illustrates this resource mobilisation, broken down by private sector (5.0bn)
and public sector (6.1bn).
Chart 9: Expected resource mobilisation
for EIB operations approved in 2012
4.           Contribution of EIB lending activity per
geographical region
This section provides more detailed
information at regional, country and project level of operations signed in
2012.
4.1.        Pre-Accession
Countries
4.1.1.     Activity by Country
Table 14:
Summary of lending signatures under EU guarantee by Country (number of
operations and volume)
The amount of
EUR 695 million for Turkey in 2011 includes EUR 150 million under Climate
Change mandate
By the end of 2012, EIB had reached 93% of
the Pre-Accession countries regional mandate ceiling (net of cancellations)
with total cumulative lending between 2007-2012 equating EUR 8,636m (of which
EUR 150m under the Climate Change Mandate). In 2012, EIB lending under mandate
in the region amounted to EUR 821m, a decrease of 25% from the previous year.
At the same time, an additional EUR 2,285m corresponding to 74% of EIB total
financing in the region was carried out at EIB’s own risk under the
Pre-Accession Facility. Out of the 38 projects signed in Pre-Accession
countries in 2012, 29 projects were signed with private sector counterparts
under the Pre-Accession Facility (PAF). 
4.1.2.     Activity by Objective
Table 15: Summary of signatures under mandate by
region-specific key lending objectives
* The above numbers cannot be added
as a single operation may contribute to several objectives
EIB support for
social and economic infrastructure accounted for 60% of overall EIB signatures
under Pre-Accession mandate in 2012. Six projects, totalling EUR 646m,
contribute to the development of social and economic infrastructure, including
the construction of two motorway sections: first, 31 km on Corridor Vc in
Bosnia and Herzegovina, connecting the country with international transit
corridors to Croatia and Hungary; and second, the construction of around 22 km
of dual two-lane motorway on new alignment bypassing Fier near coast in central
Albania. Both projects will contribute to regional integration. 
In addition, the EIB financed a large
Research Promotion project in Turkey - a EUR 175m loan for financing of
academic research and an industrial RDI programme implemented through the
Scientific and Technological Research Council. The project promotes the
integration of the Turkish Research Area with the European Research Area which
is consistent with European policy objectives aimed at the development of the
knowledge economy, particularly scientific research, tertiary education and
private sector innovation activities. Moreover, by strengthening the knowledge
economy, the project offers the potential to boost the productivity and
competitiveness of Turkey’s economy.
Two loans for EUR 120m in total were signed
specifically targeted at flood prevention. The first loan of EUR 100m is for
the implementation of range of flood prevention and protection schemes in
various river basins in Turkey over period 2013-2015. This project focusses on
protection rather than development of social and economic infrastructures as it
aims to help protect people and their livelihood against the disastrous effects
of floods. The second project was the Urgent Flood Relief and Prevention
Framework Loan for EUR 20m for the reconstruction and rehabilitation of basic
infrastructure, such as roads, damaged by floods in December 2010 in
Montenegro. Both projects and the Iller Bank Environmental Loan in Turkey (EUR
150m) for financing of small and medium-scale investment schemes in the water
and solid waste sector carried out by local authorities; contribute to the
development of social and economic infrastructure objective as well as climate
action.
Support for the local private sector
represented EUR 350m or 32% of lending under mandate in 2012, with the Tubitak
Research Promotion Project, and two intermediated loans for SMEs in Turkey,
signed with Eximbank (EUR 75m) and Ziraatbank (EUR 100m). 
Activity by Sector
4.2.        Mediterranean Partner
Countries
4.2.1.     Activity by Country
Table 16:
Summary of lending signatures under EU guarantee by Country (number of
operations and volume)
Despite the continued instability following
the Arab Spring, the EIB’s financing activity under the mandate in
Mediterranean countries increased by 44% to EUR 1,655m in 2012, reaching 81% of
the regional mandate ceiling. The largest concentration of new signatures was
in the Maghreb region with record high 11 projects in Morocco and 2 in Tunisia
for a total of EUR 1,170m in 2012. In the Mashreq / Near East region, 6
projects were signed in Egypt, Israel and Lebanon for a total of EUR 485m.
In addition to EIB lending under mandate,
one loan of EUR 10.8m was provided under the Mediterranean Partnership Facility
II at EIB own risk. The loan is for R&D and start-up of electric vehicle infrastructure
and service scheme in Israel. 
Private equity operations on third party
resources amounted to EUR 24m, comprising 3 operations (EUR 19m) signed under
the FEMIP (ENPI) Risk Capital envelope and one operation in Jordan (EUR 5m)
under the FEMIP Trust Fund. The operations signed under the FEMIP Risk Capital
include an equity participation in Moroccan generalist equity fund for EUR 5m,
a EUR 4m equity participation in venture capital fund supporting start-up and
expansion investment in SMEs in fields of technology, media and
telecommunications in Jordan and a EUR 10m participation in a closed-end
multi-sector private equity fund investing growth capital in SMEs established
in Maghreb region. 
Moreover, a total of 15 Technical
Assistance operations were signed in 2012, of which 4 under the Technical
Assistance Support Fund, 3 under the NIF Southern Neighbourhood and the 8 under
the FEMIP Trust Fund.
4.2.2.     Activity by Objective
Table 17: Summary
of signatures under mandate by region-specific key lending objectives
* The above numbers cannot be added
as a single operation may contribute to several objectives
EIB support for social and economic
infrastructure accounted for 55% of the overall EIB signatures in the
Mediterranean region in 2012. 13 projects were signed supporting the
development of social and economic infrastructure, including the Urban
Rehabilitation project in Tunisia (EUR 70m) and the Community Development
Program in Egypt (EUR 45m) both aimed at improving the general living standards
primarily in urban areas, including social and community services, basic
infrastructure and housing improvement. 
To address the growing energy needs of the
region, the EIB financed 3 large energy infrastructure projects, totalling EUR
380m, in Morocco and Israel. The first two of the following projects contribute
also to the climate objective:
Centrale Solaire De Ouarzazate – a EUR 100m for the construction of a first phase of solar power
complex in in Morocco, designed to increase solar power generation and reduce
greenhouse gas emissions. 
Israel Chemicals Ltd IPP, a EUR 100m loan for the construction and operation of a Combined
Cycle Gas turbine and Combined Heat and Power plant and its associated grid
connections and gas pipelines. The project will contribute to developing
economic energy infrastructure through increased generation capacity and
electricity production, improved availability and reliability of heat and power
supply, reduction of carbon emissions from the high clean technology
investment. Moreover, the project supports the country strategy of increasing
private sector participation in energy generation.
ONEE -
Reseaux Electriques III project (EUR 180m) in Morocco for the reinforcement and
extension of electricity transmission infrastructure. This project should
further contribute to developing economic energy infrastructure as well as
supporting climate change and regional integration among Partner countries as
the interconnection with Spain should be more reliable and the project should
indirectly contribute to the increase transmission capacity between Morocco and
Algeria.
In the transport sector, the EIB financed
four investment projects, of which three projects specifically focussed on
improving roads and motorway networks in the region whereas the fourth project
concerned the extension of Cairo’s metro line. The Cairo metro project was the
largest transport sector operation with EUR 200m signed as a first tranche of
EUR 600m EIB financing approved. The project will extend Line 3 to serve the
main transportation corridors of urban greater Cairo, involving 17.7 km of new
track and 15 stations. It will provide improved and efficient transport service
to greater Cairo area, alleviate urban congestion and pollution and promote the
use of public transport, thus contributing to more sustainable development of
the city. The project will enhance mobility and access to jobs and social
services, particularly among the poorer citizens of Cairo. 
EIB also financed the Autoroute El Jadida
project, a loan of EUR 240m for the construction of a key link to the motorway
network in Morocco between El Jadida and Safi ports. The 142km motorway section
will provide an essential logistical service to the industrial platforms of the
ports and in broader terms will contribute to regional integration as the
motorway corridor joins the major trans-European axes extending to the
neighbouring countries. 
Similarly, the Lebanese Highways II Project
(EUR 75m) to enlarge and reconstruct a section of A1 motorway between Beirut-Tripoli
will support the development of an international multimodal transport network
in the region, fostering international trade and general improved access from
the ports to the wider Lebanese region. In addition, the Bank co-financed with
AFD through its Mutual Reliance Initiative, the Routes Rurales IV project in
Morocco which forms part of the national strategy in support of the economic
and social development of rural areas for the construction of rural roads. 
In the water and sewage sector, the EIB
part-financed Morocco’s national irrigation water saving programme through its
EUR 42.5m loan to Plan Maroc Vert Pneei Project, contributing towards the Green
Morocco Plan’s overall objective of developing a modern, high value-added
agricultural sector ensuring effective, sustainable management of water
resources.
Finally, EUR 20m loan was signed under
mandate for the installation, rehabilitation and extension of wastewater
collection networks and the construction of wastewater treatment plants by the
Office National de l’Eau Potable in 27 small and medium-sized towns in Morocco
with a population of between 5,000 and 80,000. The Programme National
d’Assainissement was one of the pilot projects of the Mutual Reliance
Initiative, led by AFD. 
Support for
local private sector development:
EIB support for local private sector
development accounted for 26% of the overall EIB signatures in the
Mediterranean in 2012. 10 projects, totalling EUR 627m, were signed supporting
local private sector development, including the modernisation of Morocco’s
Group OCP plants, part of an 11 year investment programme aimed at upgrading
and expanding one of Morocco’s largest industrial enterprises, the Technopoles
Maroc Project (EUR 100m) for the construction of seven technology parks under
national economic strategy and industrial development plan (2009-2015); the
upgrading and expansion of all-inclusive hotel resort on the northern coast of
Morocco and the construction of low-cost vehicle manufacturing plant in
Melloussa free economic zone, 30 km from port of Tangiers. 
PG VI Tunisie (EUR 100m) and Private Sector
Facilities III credit line in Lebanon (EUR 55m) contribute to the local private
sector and SMEs in particular through selected financial intermediaries in
Tunisia and Lebanon.
Support for
climate action:
In terms of climate action, EIB continued
to support climate change mitigation and adaptation in the Mediterranean by
financing 5 projects under mandate for total climate support of EUR 463m of
which 3 projects (EUR 350m) under the Climate Change Mandate in 2012. The
projects ranged from sustainable transport in Cairo to renewable energy and
energy efficiency projects carried out by private sector companies. 
Activity by Sector
 
4.3.        Eastern
Europe, the Southern Caucasus and Russia
4.3.1.     Activity by Country
Table 18:
Summary of lending signatures under EU guarantee by Country (number of
operations and volume)
In 2012, EIB lending in the Eastern Europe,
Southern Caucasus and Russia reached EUR 934m, with 38% increase compared to
volumes signed in the previous year. Since the start of the implementation of
the Mandate, EIB signatures reached 69% of the regional ceiling. 
EIB continued to expand its significant
involvement in Ukraine and in Moldova with total financing of EUR 667m signed
under Mandate in 2012. In addition, lending under Mandate grew substantially in
Southern Caucasus (Armenia and Georgia) with total signatures amounting to EUR
267m, equivalent to 28% of overall lending in the region in 2012.
4.3.2.     Activity by Objective
Table 19:
Summary of signatures under mandate by region-specific key lending objectives
* The above numbers cannot be added
as a single operation may contribute to several objectives
EIB support for social and economic
infrastructure accounted for 46% of the overall signatures in Eastern Europe,
Southern Caucasus and Russia in 2012. Six projects were signed supporting the
development of social and economic infrastructure, including the construction
and modernisation of the border crossing points on the Armenian border with
Georgia, the upgrade of the western section of East-West highway from Zestaponi
to Batumi-South (10 km from Turkish border) and the reconstruction of 14.3 km
of six main roads in Chisinau in the Republic of Moldova. 
The Georgia East-West Highway (EUR 170m) is
the first EIB loan supporting the road sector and the largest EIB loan ever in
Georgia. The project will upgrade and improve the most western part of the
East-west highway, considered a priority road for Georgian government as it is
an important transport corridor, connecting two ports on the Black Sea and the
Turkish border with Tbilisi and the Red Bridge border with Azerbaijan. Indeed,
it is one of five major transnational axes in neighbourhood countries and key
in contributing to regional integration as well as achievement of sustainable
economic growth and alleviation of poverty in Georgia. This project is expected
to be financed by loans from EIB, Asian Development Bank and Japanese
International Cooperation Agency. In addition, EIB will administer a EUR 20m
grant from Neighbourhood Investment Facility and EIB will provide strong
support to the project in the form of Technical Assistance which will be
financed from the loan.
Similarly to the Georgia East-West Highway project,
the Chisinau Urban Roads project (EUR 10.3m) will also contribute to the
achievement of sustainable economic growth through the reconstruction of six
main roads in Chisinau as well as the modernisation of public lighting, traffic
signals and utilities such as the upgrade of water drainage infrastructure in
the city centre of Chisinau. The project will provide improved transport
fluidity to centre, alleviate urban congestion and pollution contributing to
more sustainable development of the city.
To address the rehabilitation and
development of energy infrastructure and to promote the regional integration of
energy markets, the EIB financed two important energy infrastructure projects,
totalling EUR 217m, in Ukraine and in the Republic of Moldova. These included: 
Hydro Power Plants Rehabilitation
project in Ukraine is a loan of EUR 200m,
co-financed with the EBRD, for upgrading and refurbishing 21 hydropower plants
along river Dnieper. The project is part of a larger, long-term programme of
the promoter to refurbish nine hydro plants, thus increasing capacity and
extending the lifetime of these renewable energy assets, meeting technical
requirements for the Ukrainian power system’s integration into the European
transmission system (UCTE/ENTSOE). The project contributes to EIB’s priority
energy lending objectives related to renewable energy, external energy
security, economic development and climate action.
Moldelectrica Power Transmission, Republic of Moldova is a EUR 17m loan, co-financed with the EBRD,
to upgrade the domestic power transmission network throughout Moldova, bringing
it closer to the ENTSO-E standards. This project will not only result in the
Republic of Moldova’s improved energy security as a result of better
integration of the country’s electricity network into regional networks, but it
will also promote economic development in the country.
In the water and sewage sector, the EIB
co-financed with the EBRD Armenia’s Water sector project (EUR 6.5m),
contributing towards the rehabilitation of water supply, sewerage and sewage
treatment facilities of 17 small towns throughout country, improving the
quality of service provided to approximately 300,000 people by raising
substantially the continuity and the quality of drinking water supply. This
project will also benefit from an additional EUR 7m NIF grant.
Support for local private sector
development: 
EIB support for local private sector
development accounted for 44% of the overall EIB signatures in Eastern Europe,
Southern Caucasus and Russia in 2012. Six loans, totalling EUR 500m, were
signed with strong financial intermediaries in support of local private sector
development (a total of EUR 410m is expected to target private beneficiaries).
These include Ukreximbank SME and Energy Efficiency / Environment Loan in
Ukraine (EUR 100m) and TBC Bank SME and Energy Environment Loan in Georgia (EUR
50m) specifically for financing of energy and environmental projects carried
out by SMEs, mid-caps and to lesser extent by public entities, through leasing
schemes. Additional three credit lines with Prominvestbank (EUR 200m),
Unicredit (EUR 140m) in Ukraine and a regional Loan for SMEs and priority
projects with ProCredit Bank (EUR 10m) were signed in 2012 for financing of
small and medium-scale projects carried out by SMEs.
Activity by Sector
4.4.        Asia
and Latin America
4.4.1.     Activity by Country
Table 20:
Summary of lending signatures under EU guarantee by Country (number of
operations and volume)
By the end of 2012, EIB had achieved 73% of
the Asia and Latin America (ALA) regional mandate ceiling with Asia reaching
75% and Latin America 72% of their sub-ceilings. EIB lending under mandate in
ALA in 2012 amounted to EUR 450m, an increase 45% from the previous year. 2012
saw a continuation of lending in Brazil, resumed activity in Vietnam, the first
signature in ALA under the Climate Change Mandate, and a new signature in
Ecuador. In addition to lending under the Mandate, EIB signed a EUR 250m
forestry framework loan in China under EIB own risk Energy Sustainability
Facility.
4.4.2.     Activity by Objective 
Table 21:
Summary of signatures under mandate by region-specific key lending objectives
* The above numbers cannot be added
as a single operation may contribute to several objectives
The
October 2011 Decision marked the formal introduction of the local private
sector development and social and economic infrastructure as new objectives in
ALA. 
In 2012, EIB financed three projects in the
region that contribute to climate change mitigation and the development of
social and economic infrastructure objectives, these are: 
·      TIM Mobile Broadband Network Project in
Brazil - the second EUR 100m tranche of a loan approved in 2011 to support EU
Foreign Direct Investment (FDI) project aiming at the expansion of the GSM and
UMTS mobile broadband networks in Brazil and, as such, promoting interoperable
technologies and the transfer of EU technology.
Metro de Quito Project in Ecuador - a EUR 200m loan for the construction of Quito’s first
metro line, forming part of the local and national plan to promote sustainable
development and improve people’s quality of life. The project will provide a
safe and efficient transport service for more than 400 000 people a day. The
new line will help to ease traffic congestion in Ecuador’s capital city and its
suburbs, improve the efficiency of public transport and reduce fuel consumption
and therefore greenhouse gas emissions. It is foreseen to be co-financed with
the Inter-American Development Bank (IADB) and Corporación Andina de Fomento
(CAF).
Vietnam Climate Change Global Loan, of EUR 150m, is the 3rd multi-scheme loan to Vietnam, targeting
climate change mitigation projects in renewable energy and energy efficiency
sectors. Similarly to the previous operations, the funds will be granted by the
Ministry of Finance to four intermediary state-owned banks. Notably, it entails
the first signed project under the Climate Change Mandate in ALA.
Beyond the Mandate, ALA received EIB’s
support with an additional financing of EUR 250m for China Forestry
Framework Loan, provided under EIB own risk Energy Sustainability Facility
(ESF). This multi-investment scheme aims to strengthen the strategic
partnership and cooperation with China in the area of Climate Change through
the restoration of existing forest and forest management improvement;
protective forest projects and coastal protective forest projects; forest
biomass; new forest and economic tree plantation; and a technical training and
technical assistance to address proper forest management capacity building.
Activity by Sector
4.5.        South
Africa
4.5.1.     Signatures by Objective
Table 22: Summary
of signatures under mandate by region-specific key lending objectives
* The above numbers cannot be added
as a single operation may contribute to several objectives
By the end of 2012, EUR 748m representing
80% of the revised mandate sub-ceiling for South Africa had been signed. With
loan cancellations netted out, the mandate commitment level stood at 74%. 
In 2012 two loans for a total amount of EUR
100m were signed in support of the renewable energy sector and municipal
infrastructure sector. 
Khi Solar One Tower Project - a EUR 50m loan for the construction and operation of a 50 MW
grid-connected solar tower power plant, the first solar tower project in the
world to employ superheated steam technology during the electricity generation
process on a commercial scale. The project will generate electricity from solar
energy, stimulate the nascent renewable energy industry in South Africa and
contribute to improving the environmental impact of power generation and
security of energy supply in the country. Moreover, this project should
contribute to regional integration among partner countries as it will enhance
the capacity of South Africa to meet its growing electricity demands and
contribute to possible exports of energy to neighbouring countries in the
Southern Africa Power Pool.
Ethekwini Municipal Infrastructure – a EUR 50m loan to finance multi-sector investments from the
eThekwini Municipality capital expenditure programme for the period 2011-2014.
It comprises in total 31 sub-projects involving the refurbishment, upgrading
and extension of municipal infrastructure and facilities in the Municipality of
eThekwini. The project is fully in line with the general mandate and regional
objectives, focussing specifically on infrastructure projects of public
interest.
Reflecting the lending priorities under the
mandate for South Africa, the development of social and economic infrastructure
remained a key focus area for the EIB financing. The Bank also continued to
support the development of the private sector (including SMEs) and projects
contributing to climate change mitigation and adaptation.
Activity by Sector
5.           List of loans signed in the regions
covered by the Decision in 2012
 Loans signed in the Pre-Accession countries under the EU Guarantee 
   || Country || Project Description || Loan Amount (EUR m) || Political Risk Guarantee[8] 
   || Albania || Construction of around 22 km of motorway on new alignment bypassing Fier near coast in central Albania || 35 || No 
   || Bosnia and Herzegovina || Construction of two motorway sections totalling 31 km in corridor Vc in Bosnia-Herzegovina || 166 || No 
   || Montenegro || Reconstruction and rehabilitation of basic infrastructure damaged by December 2010 floods || 20 || No 
   || Turkey || Implementation of range of flood prevention and protection schemes in various river basins over period 2013-2015 || 100 || No 
   || Turkey || Financing of small and medium-scale projects carried out by local authorities || 150 || No 
   || Turkey || Financing of academic research funding programme and industrial RDI programme implemented via Scientific and Technological Research Council || 175 || No 
   || Turkey || Financing of small and medium-scale projects || 75 || No 
   || Turkey || Financing of small and medium-scale projects || 100 || No 
   ||   ||   || 821 ||   
 Loans signed under the Pre-Accession Facility 
   || Country || Project Description || Loan Amount (EUR m) 
   || Bosnia and Herzegovina || Financing of small and medium-scale projects carried out by SMEs || 20 
   || Bosnia and Herzegovina || Financing of small and medium-scale projects carried out by SMEs || 20 
   || Croatia || Financing of small and medium-scale projects mainly carried out by SMEs and mid-caps || 50 
   || Croatia || Financing of projects carried out by SMEs and midcaps || 250 
   || FYROM || Financing of small and medium-scale industrial projects carried out by SMEs || 100 
   || FYROM || Financing of small and medium-scale projects carried out by SMEs || 10 
   || Montenegro || Financing of small and medium-scale projects || 25 
   || Serbia || Financing of small and medium-scale projects carried out by SMEs and midcaps || 100 
   || Serbia || Financing of small and medium-scale projects carried out by SMEs and midcaps || 50 
   || Serbia || Financing of small and medium-scale projects carried out by SMEs and midcaps || 35 
   || Serbia || Financing of small and medium-scale projects mainly carried out by SMEs and mid-caps || 40 
   || Serbia || Financing of small and medium-scale projects carried out by SMEs and midcaps || 50 
   || Turkey || Financing of small and medium-scale projects carried out by SMEs and midcaps || 150 
   || Turkey || R&D aimed at improving performance and broadening home appliance product portfolio || 100 
   || Turkey || Financing of projects carried out by SMEs || 75 
   || Turkey || Construction and operation of Eurasia tunnel under Bosphorus in Istanbul || 270 
   || Turkey || Modernisation of plant for production of redesigned range of light and medium-sized commercial vehicles in Koçaeli || 190 
   || Turkey || RDI involving development of new, light-weight vehicle interior components in several countries || 5 
   || Turkey || Financing of projects carried out by SMEs and midcaps || 150 
   || Turkey || Financing of small and medium-scale projects carried out by SMEs and midcaps || 100 
   || Turkey || Framework loan for financing small and medium-scale renewable energy and energy efficiency projects || 75 
   || Turkey || Financing of small and medium-scale projects carried out by SMEs and midcaps || 75 
   || Turkey || R&D concerning fixed line, mobile and internet services || 70 
   || Turkey || Financing of small and medium-scale projects carried out by SMEs and midcaps || 200 
   || Turkey || Financing of small and medium-scale projects carried out by SMEs || 75 
   ||   ||   || 2,285 
   Loans signed in the Mediterranean countries under the EU guarantee 
   || Country || Project Description || Loan Amount (EUR m) || Political Risk Guarantee 
   || Egypt || Extension of metro line 3 to serve main transport corridors of greater Cairo area || 200 || No 
   || Egypt || Community development programme to help develop a modern, high value-added agricultural sector by substantially increasing current crop yields and boosting agricultural incomes for the 7 772 small farmers affected by the project which in turn will promote economic growth. || 45 || No 
   || Israel || Construction of combined cycle gas turbine combined heat and power plant near Sdom (southern part of Dead Sea) || 100 || Yes 
   || Lebanon || Enlargement and reconstruction of 10.3 km section of A1 motorway (Beirut-Tripoli) including upgrading of three access roads and two intersections in Beirut || 75 || No 
   || Lebanon || Financing of renewable energy and energy efficiency projects carried out by private sector companies || 50 || No 
   || Lebanon || Financing of small and medium-scale projects carried out by SMEs || 15 || Yes 
   || Morocco || Construction of motorway between El Jadida and Safi || 240 || No 
   || Morocco || Construction of first phase of solar power complex in Ouarzazate || 100 || No 
   || Morocco || Construction of two sulphuric acid production plants in Safi and two low-grade phosphate processing plants in Mea and Halassa near Khouribga || 130 || No 
   || Morocco || Reinforcement and extension of electricity transmission infrastructure || 180 || No 
   || Morocco || Part-financing of national irrigation water saving programme comprising upgrading of public irrigation systems || 42.5 || No 
   || Morocco || Modernisation of wastewater collection networks and construction of treatment plants in 27 small and medium-sized towns throughout Morocco || 20 || No 
   || Morocco || Construction of low-cost vehicle manufacturing plant in Melloussa free economic zone, 30 km from port of Tangiers || 73.5 || Yes 
   || Morocco || Third phase of national rural roads programme || 100 || No 
   || Morocco || Construction of seven technology parks under national industrial development plan (2009-2015) || 100 || No 
   || Morocco || Upgrading and expansion of all-inclusive Club Med village near Tetouan on northern coast of Morocco || 13.7 || No 
   || Tunisia || Financing of small and medium-scale projects carried out by SMEs || 100 || No 
   || Tunisia || Improvement of poor urban areas through provision of basic public amenities || 70 || No 
   ||   ||   || 1,655 ||   
 Loans signed under the Mediterranean Partnership Facility II 
 Country || Project Description || Loan Amount (EUR m) || 
 Israel || R&D and start-up of electric vehicle infrastructure and service scheme || 11 || 
   ||   || 11 || 
 Loans signed in Eastern Europe, Southern Caucasus and Russia under the EU guarantee 
 Country || Project Description || Loan Amount (EUR m) || Political Risk Guarantee 
 Armenia || Rehabilitation of water supply, sewerage and sewage treatment facilities of 17 small towns throughout country || 7 || No 
 Armenia || Construction and modernisation of crossing points on border with Georgia at Bagratashen, Bavra and Gogavan || 30 || No 
 Georgia || Upgrading of western section of East-West highway from Zestaponi to Batumi-South (10 km from Turkish border) || 170 || No 
 Georgia || Financing of small and medium-scale projects carried out by SMEs || 10 || Yes 
 Georgia || Financing of energy and environmental projects carried out by SMEs, mid-caps and public entities through leasing schemes || 50 || Yes 
 Moldova, Republic of || Reconstruction of 14.3 km of six main roads in Chisinau || 10 || No 
 Moldova, Republic of || Upgrading of domestic power transmission network throughout country || 17 || No 
 Ukraine || Upgrading and refurbishment of 21 hydropower units along river Dnieper || 200 || No 
 Ukraine || Financing of small and medium-scale projects carried out by SMEs and midcaps || 200 || Yes 
 Ukraine || Financing of small and medium-scale projects carried out by SMEs || 100 || No 
 Ukraine || Financing of small and medium-scale projects carried out by SMEs || 140 || Yes 
   ||   || 934 ||   
 Loans signed in Asia and Latin America under the EU guarantee 
 Country || Project Description || Loan Amount (EUR m) || Political Risk Guarantee 
 Brazil || Extension of geographical coverage and increase of capacity of TIM Celular's GSM and UMTS mobile broadband networks || 100 || Yes 
 Ecuador || Construction of Quito's first metro line, including 15 stations || 200 || No 
 Viet Nam || Financing of renewable energy, energy efficiency and climate change mitigation projects || 150 || No 
   ||   || 450 ||   
 Loans signed in Asia and Latin America under the Facility for Energy Sustainability and Security of Supply at EIB own risk 
 Country || Project Description || Loan Amount (EUR m) || 
   ||   ||   || 
 China || Financing of forestry projects contributing to climate change mitigation through carbon sinking and avoidance of greenhouse gas emissions || 250 || 
   ||   || 250 || 
 Loans signed in South Africa under the EU guarantee 
   || Country || Project Description || Loan Amount (EUR m) || Political Risk Guarantee 
   || South Africa || Refurbishment, upgrading and extension of municipal infrastructure and facilities in city of eThekwini || 50 || Yes 
   || South Africa || Construction and operation of greenfield solar tower with 50 MW nominal power generating capacity || 50 || Yes 
   ||   ||   || 100 ||   
6.           List
of EC-EIB initiatives / partnerships in the regions covered by the Decision
Cooperation between the EIB and the
Commission is daily and pervasive throughout much of the EIB activities. A
substantial part of operational cooperation and coordination between the
Commission and the EIB, involving also other IFIs and European Bilateral
Financing Institutions, takes place within the various regional blending
mechanisms set up by the Commission including the Western Balkans Investment
Framework (WBIF), Neighbourhood Investment Facility (NIF), Asia Investment
Facility (AIF), Latin America Investment Facility (LAIF) and Investment
Facility for Central Asia (IFCA). 
38% of the volume signed under the Mandate
in 2012 is associated with grants under the blending mechanisms, namely NIF (11
projects) and WBIF (2 projects) or under the EIB-managed EU budget funded TA in
the Mediterranean (3 projects) or direct grants (1 project in Pre-Accession).
The EIB is the largest financier in terms of volumes lent for NIF projects: it
has co-financed two-thirds of the projects (50 out of 75) approved by the NIF
Board since the inception of the Facility. By end-2012, the WBIF had provided
approximately EUR 280 mn in grants to 138 projects which have attracted
investment loans worth EUR 7.7bn (of which EUR 2.3 bn signed) from
International Financial Institutions. EIB has co-financed approximately 40% of
the projects benefiting from WBIF grants.
Beyond the strong cooperation under the
above facilities, as referred to in the main report, a close policy dialogue
takes place between the Commission, the EEAS and the EIB. This dialogue is
particularly emphasized whenever stressed political and economic circumstances
call for a coordinated approach between the two institutions.
In November 2012, the EIB participated in
the 18th Conference of the Parties (COP 18) to the UN Framework Convention on
Climate Change, held in Doha, Qatar. The EIB was recognised by a broad range of
political, civil society, private and public sector stakeholders as a major
financier of climate action within and outside Europe, and was credited both
for developing and rolling out innovative financing, and for identifying and
applying robust climate-related performance standards to the projects it
finances. The Bank is supporting the leadership role taken by the EU on this
important global issue, in close coordination with the Commission. At COP 18, the
EIB also co-hosted with the African Development Bank a public event at which
the harmonized approach of Multilateral Development Banks towards the tracking
of financing for adaptation and mitigation was presented.
Apart from the regional blending mechanisms,
the rest of this section provides an overview of other main instruments funded
by the EU budget complementing the EIB external mandate and own risk facilities
within which the Commission and the EIB cooperated in 2012, with the aim to
maximise synergies and to provide coherent support for the regions outside the
EU. At the end of the section, a summary table provides a breakdown of the EU
budgetary funds provided to date to complement EIB financing in the regions
covered by the Decision. Section 7 provides the list of projects signed by the
EIB and co-financed with other IFIs or with the Commission.
Pre-Accession Countries
·      2 Energy Efficiency Finance Facilities (EEFF) were launched
in 2006 and 2007 to tackle the Climate Change issue. They aim at stimulating
the energy efficiency and renewable energy investments in all types of building
and in the industry sector by making appropriate financing available. The EEFF
combines IFI credit lines extended to financial intermediaries with incentives
to improve the cost effectiveness of equipment and make the energy investment
more attractive, and fees to the benefit of local financial intermediaries to
encourage them to lend for the purpose of energy efficiency financing. At the
end of 2012, the total grant contribution made available by the EC amounted to
EUR 19.5 mn and the EIB lending commitment is at least 78 mn. 
·      Since 2001, the Commission and the EIB are co-operating under the SME
Finance Facility (SMEFF), merging the grant support with the EIB lending to
help developing the SME lending capacities of Participating Financial
Institutions in the eligible countries. In July 2011, an Energy Efficiency window
was introduced under the SME FF programme. Total grants available under this EE
window amount to EUR 25m and the EIB lending commitment is EUR 75 mn. At end
2012, the EIB’s total grant available for the SME FF under the PHARE Program
was EUR 47 mn, and the EIB has committed to provide debt financing of at least
EUR 470 mn.
·      Since 2003, the Municipal Finance Facility (MFF) aims
to encourage local financial intermediaries to extend loans to municipalities.
The mechanism of the programme is similar to the SMEFF. In July 2011, an Energy
Efficiency window was introduced under the MFF programme. Total grants
available amount to EUR 3 mn and the EIB lending commitment is EUR 15 mn. At
end 2012, the EIB’s total grant available for the MFF under the PHARE Program
was EUR 54 mn, and the EIB has committed to provide debt financing of at least
EUR 432 mn.
Mediterranean countries
·      The EIB manages in the context of FEMIP and on behalf of the EU, a
budgetary envelope of EUR 32 mn per year under the inter-regional ENPI
programme for risk capital investments and technical assistance. 
·      The FEMIP Trust Fund (FTF), a replenished financial envelope
of EUR 40 mn funded by contributions of 17 Member States and the Commission,
provides resources to upstream technical assistance and studies, targeted
equity operations designed to support innovative private sector companies and
concrete initiatives for Mediterranean partner countries committed to the
transition to democracy. Since its creation in 2004, the FEMIP Trust Fund has
given solid added value to the Bank’s activities in the region. It has been
operating as a think tank by financing research in new areas likely to help to
develop the private sector in the region. In 2012, eight new TA contracts and
one risk capital operation amounting to EUR 10.6 mn were signed. 
Global
·      The Global Energy Efficiency and Renewable Energy Fund
(GEEREF) is an innovative fund of funds sponsored by the Commission, Germany
and Norway, and advised by the EIB and EIF, to provide clean energy to emerging
countries and economies in transition. 
Table 21: Signatures/Commitments
of EU budget resources under EIB management and/or contributing to EIB financed
projects in the regions covered by the Decision 
7.           Co-Operation
with European Ombudsman 
The Memorandum of Understanding (MoU)
signed between the EIB and the European Ombudsman (EO) in 2008 sets the basis
for the two stages of the EIB Complaints Mechanism – the internal (EIB-CM) and
the external (EO) – approved by the EIB Board of Directors in 2010 after
extensive public consultation. It achieves a common understanding of purpose
and consistency of application across its internal and external parts, with a
specific focus on:
The European Ombudsman commitment to use
its own initiative power systematically in order to handle complaints when the
complainant is not a citizen or resident of the European Union;
The existence of an effective internal
Complaints Mechanism (the EIB-CM);
The scope of the EO’s review, with the
recognition of the EIB-CM as the required prior approach.
Table 22: Project related complaints lodged with the internal part
(EIB-CM) of the EIB Complaints Mechanism 2008-2012
   || 2008 || 2009 || 2010 || 2011 || 2012 || 5 years 
 EU Member States || 3 || 5 || 13 || 13 || 11 || 45 
 Non-EU, of which || 3 || 8 || 7 || 9 || 10 || 37 
 in External Mandate regions || 1 || 6 || 3 || 8 || 8 || 26 
 in ACP, OCTs || 2 || 2 || 4 || 1 || 2 || 11 
 TOTAL || 6 || 13 || 20 || 22 || 21 || 82 
The outcome of the complaints handling
process varied from “allegations not grounded” to “areas for improvement
recommended”. In two cases, the project has been abandoned after the complaint:
(i) South Sinaï Power Plant in Egypt – led to a recommendation to the Bank not
to finance the project and consequently the project promoter abandoning the
project and transferring it to a new location; (ii) Barro Blanco Hydropower in
Panama – led to the project promoter to withdraw the request for EIB financing.
At 31.12.2012, the EIB-CM was handling 27 registered
project related complaints, of which 9 in the regions covered by the External
Mandate. Of those, it is worth mentioning:
Panama Canal Expansion Project – alleged negative environmental and social impacts of the project;
Municipal and Regional infrastructure
Loan and Belgrade By-pass Project, both in
Serbia - alleged non-compliance with national law and with EIB social
standards;
Cairo Metro Line Project in Egypt – alleged lack of proper public consultation and negative
construction impacts.
Project related complaints escalated
to external part (EO) of the EIB Complaints Mechanism 2008-2012
Since 2008, only 5 cases of project related
complaints have been escalated to the Ombudsman, with 4 still on-going at
31.12.2012, of which only one is related to a project outside of the EU, in
Uganda. Since the signature of the MoU between the EO and the EIB, i.e. between
2008 and 2012, there has been no critical remark by the EO against the Bank. In
the 13 cases closed during that period, no maladministration has been found,
and/or the cases have been settled by the Bank. 
8.           List of 2012 operations co-financed with
other IFIs and the Commission
 Mandate/ Facility || Country || Name || Project cost (EURm) || EIB loan signed in 2011 (EURm) || Multilat. Financing Inst. || European Bilateral Inst. || EU budget contribut. 
 Pre-Acc. Mandate || Albania || FIER BYPASS || 81.20 || 35.00 || X ||   || WBIF 
 Pre-Acc. Mandate || Bosnia and Herzegovina || CORRIDOR VC - SECOND PHASE || 339.62 || 166.00 || X ||   || WBIF 
 Pre-Acc. Mandate || Turkey || FLOOD PREVENTION AND PROTECTION || 202.00 || 100.00 ||   || X ||   
 Pre-Acc. Mandate || Turkey || EURASIA TUNNEL (PPP) / A and B || 813.09 || 269.52 || X ||   ||   
 Pre-Acc. Mandate || Turkey || ILLER BANK ENVIRONMENTAL LOAN || 300.00 || 150.00 ||   ||   || MFF 
 Pre-Acc. Mandate || Turkey || FORD OTOSAN II A and B || 569.30 || 190.00 || X ||   ||   
 Pre-Acc. Mandate || Turkey || YAPI KREDI BANK LOAN FOR SMES II || 150.00 || 75.00 || X ||   ||   
 Pre-Acc. Mandate || Turkey || ISBANK CLIMATE CHANGE FACILITY || 150.00 || 75.00 || X ||   ||   
 Clim. Chge Mandate || Egypt || CAIRO METRO LINE 3 (PHASE 3) A || 2417.90 || 200.00 ||   || X || NIF 
 ENP MED. Mandate || Egypt || COMMUNITY DEVELOPMENT PROGRAM || 90.00 || 45.00 ||   ||   || NIF, FEMIP TF 
 Med Partnership Facility II || Israel || BETTER PLACE ELECTRIC VEHICLE SERVICE || 380.84 || 10.80 ||   ||   || RSFF, EU grant 
 ENP MED. Mandate || Lebanon || LEBANESE HIGHWAYS II || 150.00 || 75.00 ||   ||   || FEMIP TA 
 Clim. Chge Mandate || Morocco || CENTRALE SOLAIRE DE OUARZAZATE || 696.00 || 100.00 || X || X || NIF 
 ENP MED. Mandate || Morocco || ROUTES RURALES IV || 300.00 || 100.00 ||   || X ||   
 ENP MED. Mandate || Morocco || TECHNOPOLES Morocco || 280.00 || 100.00 ||   || X ||   
 ENP MED. Mandate || Morocco || PROGRAMME NATIONAL ASSAINISSEMENT || 176.00 || 20.00 ||   || X || NIF 
 ENP MED. Mandate || Morocco || ONEE - RESEAUX ELECTRIQUES III || 442.78 || 180.00 || X || X || NIF 
 ENP MED. Mandate || Morocco || AUTOROUTE EL JADIDA - SAFI || 493.50 || 240.00 || X ||   ||   
 Clim. Chge Mandate || Tunisia || LEBANON ENERGY EFFICIENCY AND RENEWABLES GL || 147.00 || 50.00 ||   || X || NIF 
 ENP MED. Mandate || Tunisia || REHABILITATION URBAINE TUNISIE || 217.50 || 70.00 ||   || X ||   
 ENP MED. Mandate || Morocco || PLAN MAROC VERT || 85.65 || 42.50 || X || X || FEMIP TA 
 ENP EAST Mandate || Armenia || ARMENIA WATER SECTOR PROJECT || 21.70 || 6.50 || X ||   || NIF 
 ENP EAST Mandate || Armenia || BORDER CROSSING AND INFRASTRUCTURE || 60.63 || 30.32 || X ||   || NIF 
 ENP EAST Mandate || Georgia || GEORGIA EAST - WEST HIGHWAY - A || 592.14 || 170.00 || X ||   || NIF 
 ENP EAST Mandate || Republic of Moldova || MOLDELECTRICA POWER TRANSMISSION || 39.92 || 17.00 || X ||   || NIF 
 ENP EAST Mandate || Republic of Moldova || CHISINAU URBAN ROADS || 28.30 || 10.30 || X ||   ||   
 ENP EAST Mandate || Ukraine || HYDRO POWER PLANTS REHABILITATION || 40.00 || 200.00 || X ||   || NIF 
 ALA Mandate || Ecuador || METRO DE QUITO || 1361.00 || 200.00 || X ||   ||   
9.           Results
Measurement Framework – Worked example
[1]               70 % of the signed amount is estimated to benefit
SMEs and 30 % is dedicated to other priority projects undertaken e.g. by local
authorities. Notably, in all these operations, the Bank offered its new product
in the region, the "Loan for SMEs and Mid-Caps".
[2]               Pillar 3 ratings for additionality are slightly
different: 4-high, 3-significant, 2-moderate, 1-low.
[3]               Risk capital envelopes for the Mediterranean funded
by the EU budget and the Kingdom of Spain.
[4]               The estimates of
the number of jobs (FTEs) generated by the loans to MSMEs resulting from
approved EIB operations are based on the definitions used in the World Bank
Group’s Enterprise Surveys together with the IFC’s Financial Markets
definition. According to this methodology, the employment multiples are linked
to loan size to calculate number of jobs sustained.
[5]               EIB Statement of Environmental and Social Principles
and Standards” (2009), Para 45, p. 17.
[6]               list of EIB excluded activities: http://www.eib.org/attachments/documents/excluded_activities_2012_en.pdf
[7]               The five Social Assessment Guidelines are: 1)
Involuntary Resettlement; 2) Rights and Interests of Vulnerable Groups; 3)
Labour Standards; 4) Occupational and Community Health and Safety; and 5)
Public Consultation and Participation.
[8]               The Political Risk Guarantee column highlights the
operations where, in contrast to sovereign or sub-sovereign operations
covered by the Comprehensive Guarantee, the EU assumes defined political
risks while the EIB assumes all other risks.