REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON 2014 EIB EXTERNAL ACTIVITY WITH EU BUDGETARY GUARANTEE
Date: 2015-12-16
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EIB loan, adaptation to climate change, credit guarantee, development aid, financial aid, financial management, institutional cooperation, investment abroad, investment protection, third country

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 16.12.2015  COM(2015) 649 final   REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON 2014 EIB EXTERNAL ACTIVITY WITH EU BUDGETARY GUARANTEE  {SWD(2015) 285 final}  
 
 
INTRODUCTION 

1. 
Decisions 1080/2011/EU1 and 466/2014/EU2 of the European Parliament and of the Council 
of  25  October  2011  and  16  April  2014  respectively  grant  an  EU  guarantee  to  the European 
Investment Bank (EIB) against losses under EIB financing operations for projects outside the 
Union  over the  periods 2007-2013 and  2014-2020  respectively  (the “Decisions” or  the  "EU 
guarantee”).  These  Decisions  require  the  Commission  to  report  annually  on  EIB  external 
activities  with  the  EU  budgetary  guarantee,  building  on  yearly  reports  provided  by  EIB. 
Following the extension by six months of Decision 1080/2011/EU till 30 June 2014 and the 
adoption of the Decision 466/2014/EU over 2014-2020, the present report covering the year 
2014 has been prepared on the requirements of these two legal basis. This report also provides 
a summary of the own risk operations carried out by the EIB in 2014 in the regions covered 
by  the  Decisions.  The  EIB  operations  in  Africa,  Caribbean  and  Pacific  (ACP)  as  well  as  in 
Overseas Countries and Territories (OCT) are covered in a separate annual report. 

The new Decision 466/2014/EU adopted on 16 April 2014 (the "Mandate") sets a maximum 
ceiling for the EU guarantee of EUR 30 billion broken down into a fixed ceiling amounting to 
EUR  27  billion  and  an  optional  additional  amount  of  EUR  3  billion.  The  activation  of  the 
optional  amount  as  well  as  its  regional  distribution  shall  be  decided  by  the  European 
Parliament  and  the  Council  following  the  mid-term  review  of  the  Mandate.  In  the  new 
Decision, the three high level objectives for extending the EU guarantee remain unchanged: 
promoting growth in the local private sector, developing social and economic infrastructure, 
climate  action  and,  as  an  underlying  objective,  fostering  regional  integration.  The  Mandate 
entered into force with the signing of the Guarantee agreement on 25  July 2014. 

More detailed information  and statistical tables on the above activities, including at  project, 
sector, country and regional level, are provided in the attached Staff Working Document (the 
“SWD”). Following the third year of implementation of the EIB REsults Measurement (ReM) 
framework,  this  report  provides  information  on  expected  results  based  on  EIB  financing 
operations signed in 2014. Actual results achieved based on the first ReM Project Completion 
Reviews  or  on  case  studies  on  operations  approved  before  ReM  and  having  reached 
completion are presented in the SWD. 

KEY RESULTS 

2. 
The  Annex  to  the  report  on  2013  EIB  external  activity  with  EU  budgetary  guarantee3 
provided  a  global  picture  of  EIB  financing  operations  outside  the  EU  carried  out  over  the 
period  from  2007  to  30  June  2014.  The  report  concluded  that  the  final  utilisation  of  the 
Decision 1080/2011/EU as at 30 June 2014 was 99% overall despite the challenging business 
environment experienced in several parts of the world.  

In the regions covered by the Decision, signatures totalled EUR 6.8 billion, almost equal to 
the  previous  year,  with  financing  under  the  EU  guarantee  declining  slightly  to  EUR  4.2 
billion, and financing under EIB own-risk Facilities increasing by EUR 0.2 billion to EUR 2.6 
billion.  Overall  volumes  in  2014  were  mainly  driven  by  a  strong  performance  in  the 
Neighbourhoodand Pre-Accession regions. 

1  
2 
3  

OJ L 280, 27.10.2011, p.1 
OJ L 135, 08.05.2014, p.1 
COM(2014)674  

2 

 
 
                                                            
The  EIB  continued  to  demonstrate  its  commitment  to  supporting  the  EU's  climate  action 
agenda.  In  September  2015,  the  EIB  Board  adapted  a  Climate  Action  Strategy  to  guide  all 
EIB  actions  both  within  and  outside  the  EU,  and  is  foreseen  to  update  of  the  EIB  climate 
strategy for external lending mandate countries before end of 2015. EIB operations signed in 
the  regions  covered  by  the  Decision  remain  well  above  the  threshold  of  25%  set  out  in  the 
Decision  with  EUR 2.1  billion, or  31%  of total signatures targeting climate action  this year 
with a particular emphasis on ALA region (almost 40% of climate signatures).  

In  2014,  when  it  was  implemented  for  the  third  year  in  a  row,  the  EIB  through  the  ReM 
framework noted that 100% of new operations signed in the Mandate regions are expected to 
make either an excellent or a good contribution to the Mandate objectives. Over 90% of new 
projects are expected to achieve either excellent or good results in terms of expected impact, 
quality  and  soundness  of  projects.  More  than  85%  of  new  projects  are  expected  to  be 
associated with either high or significant EIB additionality. EIB's own report on results of EIB 
operations  outside  the  EU  (which  also  includes  operations  in  ACP  and  OCT  countries)  in 
2014 has been published on its website. 

The  new  Decision  emphasises  a  strong  alignment  of  EIB  external  activity  and  EU  external 
policies, programmes and instruments and it is worth noting that over the year 2014, the EIB 
continued  to  cooperate  closely  with  the  Commission  and  the  EEAS  to  strengthen  the 
consistency  and  coherence  of  EIB  actions  with  external  EU  policies.  In  this  context,  the 
Commission, together with the EIB and in consultation with the EEAS, prepared the revised 
Regional Technical Operational Guidelines which were transmitted to the Parliament and the 
Council in May 2015.  

3. 

FINANCING OPERATIONS 

3.1. 

OVERVIEW OF EIB FINANCING VOLUME IN THE REGIONS COVERED 
BY THE DECISIONS4 

The  following  table  provides  an  overview  of  the  volume  of  EIB  financing  in  2014  in  the 
regions covered by the Decisions. 

Table 1: EIB Financing Operations signed in 2014 

Countries of 
operation 

(EUR million) 

Pre-Accession 
Countries 

Mediterranean 
countries 

Eastern Neighb., 
Russia 

Asia and Latin 
America 

South Africa 

Total 

Operations under EU guarantee 

Comprehensive 
guarantee 

Political 
risk cover 

Total 

EIB own 
risk 
operations 

Total 

621 

1122 

1016 

670 

175 

3603 

0 

260 

160 

150 

0 

570 

621 

1815 

2436 

1382 

230 

1612 

1176 

820 

175 

4174 

0 

550 

0 

2595 

1176 

1370 

175 

6769 

Notes: In addition to the above volumes on EIB own resources, equity and microfinance operations  
amounting to EUR 52 million were signed on third party resources in the Mediterranean. 

4  

Decision 466/2014/EU and 1080/2011/EU 

3 

 
 
                                                            
The  share  of  activity  under  the  EU  guarantee  in  total  volume  decreased  in  2014  by  4%  to 
reach EUR 4.2 billion (EUR 4.4 billion in 2013) or 61% of total 2014 financing in the regions 
covered by the Decision. The share of activity at EIB own risk increased by 4% to reach EUR 
2.6  billion.  More  than  90%  of  operations  financed  at  EIB  own  risk  during  2014  have  been 
signed in Pre-Accession and in ALA countries, with the remaining 9% in the Mediterranean 
region. In Eastern Neighbourhood  (Ukraine - see below) and South Africa, all financing was 
signed under the EU guarantee.  

In 2014, 86% of the loans signed with the EU guarantee were covered by a Comprehensive 
Guarantee (EUR 3.6 billion), which is used for sovereign and sub-sovereign operations, while 
14% benefited from the political risk cover (EUR 0.6 billion) for private sector operations.  

Table 2: Cumulative net signatures compared with the current EU Mandate  
ceilings over 2014-2020  

EUR million 

Pre-Accession 

Mediterranean 

Eastern Neighbours, Russia   

Asia and Latin America 

South Africa   

Total in Mandate Regions   

Ceiling 

Net signed (EUR 
million) 

Net signed as % of 
mandate ceiling 

8.739 

9.606 

4.831 

3.407 

416 

27.000 

200 

390 

1.090 

415 

                  -    

2.095 

2% 

4% 

23% 

12% 

0% 

8% 

In the second half of the year under the new ELM nearly half of the total volume signed (EUR 
2.1  billion)  was  signed  in  the  Eastern  Neighbourhood  where  geopolitical  developments 
delayed  most  signatures  until  the  last  quarter.  23%  of  sub-ceiling  2014-2020  for  Eastern 
Neighbourhood  has  been  achieved  due  to  the  signature  of  6  new  operations  in  Ukraine 
totalling EUR 940 million.  

Defaults on interest payments and loan repayments from the Syrian Government continued in 
2014. At the end of 2014, cumulative payments from the Guarantee Fund related to calls by 
the  EIB  amounted  to  a  total  of  EUR  142.72  million,  of  which  EUR  60.22  million    paid  in 
2014. 

4 

 
 
 
 
Chart 1: Annual evolution of EIB lending volumes on own resources 

7.639 

7.758 

6.459 

6.506 

6.793 

6.769 

5.584  5.522 

Mandate

EIB own risk
Facilities

Total

78% 

63% 

61% 

 65%  

61 
% 

47% 

 9.000

 8.000

 7.000

 6.000

 5.000

 4.000

 3.000

 2.000

  67% 

73% 

 1.000

 -

2007

2008

2009

2010

2011

2012

2013

2014

With EUR 6.7 billion, signatures for 2014 are slightly (2%) above the annual average of the 
years before (EUR 6.6 billion).  

In  terms  of  number  of  projects,  financing  for  42  projects  was  signed  in  2014  under  EU 
guarantee (same number of projects signed in 2013) and 23 projects under EIB own risk (26 
projects signed in 2013).  

Table 3: Number of operations signed by region (all resources), in 2014 

Regions 

Pre-Accession 

Mediterranean5 

Eastern Neighbours, Russia 

Asia and Latin America 

South Africa 

Total 

Third Party 
Resources 

Under EU 
guarantee   

EIB  
own-risk 

Total 

7 

7 

8 

12 

12 

8 

2 

42 

19 

1 

0 

3 

0 

23 

27 

20 

12 

11 

2 

72 

As  shown  in  the  table  4  below,  the  Pre-Accession  countries  remained  the  main  beneficiary 
region  of  EIB  financing  outside  the  EU  in  2014  with  EUR  2.4  billion  signed,  representing 
36%  of  total  financing  in  the  regions  concerned.  A  major  focus  for  the  region  has  been  to 
ensure  adequate  financial  support  for  innovation  and  for  growth,  particularly  of  SMEs  and 
private  sector  lending.  Under  the  Mandate,  a  key  priority  has  also  been  to  finance  projects 
integrating more fully with European infrastructure networks. 

5 One operation supported by both EIB own risk and ELM supported financing – recorded as EIB own-risk.  

5 

 
 
 
 
 
 
 
 
 
                                                            
Table 4:  Sectorial distribution of EIB financing operations signed in 2014 in the regions  
covered by the Decision (all resources) 

Pre-
Accession 

Mediterran
ean 

Eastern 
Neighb. 

Asia and 
Latin 
America 

South Africa 

Total 

Credit lines 

Energy 

Transport 

Urban development 
/ Composite infrast. 

Industry 

Water, sewerage 

Agriculture, 
fisheries, forestry 

Education 

Services 

Total 

280  

885  

158  

135  

250  

635  

268  

100  

595  

180  

55  

105  

170  

85  

71  

118  

1.260  

243  

348  

300  

165  

20  

100  

70  

52  

2.385  

175  

2.118  

828  

640  

335  

293  

100  

70  

52  

2.436  

1.664  

1.176  

1.370  

175  

6.820  

In  2014  in  the  Mediterranean  countries  EIB  financing  under  EU  guarantee  and  at  EIB  own 
risks increased threefold to EUR 1.6 billion compared to the previous year, of which EUR 1.3 
billion in support of key infrastructure projects, including investments inroads modernisation 
and  upgrading  of  schools  and  also  in  climate  action  projects  in  renewable  energy  (solar 
thermal plan in Israël, in Marrocco) and energy efficiency (combined cycle plant in Egypt), .. 
Support to private sector development also continues to be an important priority in the region. 
With 5 new credit line agreements (EUR 280 million) signed in Tunisia, Egypt and Lebanon, 
support to SMEs reached its highest performance since the Arab Spring. An additional EUR 
52  million  was  signed  using  third  party  resources  including  support  to  micro-entrepreneurs 
through  microfinance  service  providers  and  investments  to  equity  funds  supporting  the 
diversification of the local financial sectors.  

In  the  Eastern  Neighbourhood,  total  signatures  reached  EUR  1.2  billion,  representing  the 
second highest annual volume, following a record level (EUR 1.8 billion) signed in 2013. In 
Russia, activities have halted in the context of EU sanctions. EUR 940 million was signed in 
Ukraine as EIB’s contribution towards the EU Special Action Plan for Ukraine. In an effort to 
deliver  on  the  commitment  to  provide  EUR  3  billion  of  financing  over  2014  –  2016, 
cooperation  with  the  Ukrainian  authorities  intensified,  alongside  dialogue  with  the 
Commission and EIB and coordination with other investors. Signed operations include credit 
lines  for  private  sector  development  channelled  via  the  State,  framework  loan  for  early 
recovery and reconstruction, support for a gas pipeline project and for the construction of the 
Beskyd Railway Tunnel forming part of a Pan-European corridor. 

In Asia, Central Asia and Latin America, EUR 1.4 billion total signatures increased again by 
EUR 0.2 billion compared to 2013. Support to climate action and sustainable energy remained 
a  major  focus  representing  58%  of  signatures  in  the  year.  Other  signatures  include  a  first 

6 

 
 
 
 
 
                 
                    
                    
                    
  
                 
                    
                    
                    
                    
                    
                 
                    
                    
                       
                    
  
                    
                    
                    
                    
                    
  
                    
                    
  
                    
  
  
                    
                       
                       
                       
                    
  
                    
                    
  
  
  
  
                    
  
                       
  
  
  
                       
  
                       
  
  
  
                       
                 
                 
                 
                 
                    
                 
 
credit line of EUR 150 million with a commercial bank in Mexico and the first signature in 
Mongolia EUR 50 million for investments in water, wastewater and sanitation. The EIB also 
signed a EUR 70 million tranche for the Tajik - Kyrgyz Power Interconnection. This project 
has  a  strong  regional  cooperation  value  and  is  quite  exceptional  in  terms  of  size  for  the 
Central Asian countries.  

In South Africa, two loans (totalling EUR 175 million) were signed for the financing of solar 
power plants, down from EUR 260 million in 2013.  

3.2. 

CONTRIBUTION TO EU POLICY OBJECTIVES  

The Decision foresees three horizontal high-level objectives for all regions covered by the EU 
budgetary guarantee:  

(i) 

Local private sector development, in particular support to SMEs, 

(ii) 

Development of social and economic infrastructure, 

(iii)  Climate change mitigation and adaptation. 

Additional  underlying  objectives  include  the  contribution  to  the  general  principles  guiding 
external  action,  as  referred  to  in  Article  21,  TEU  and  regional  integration  among  partner 
countries,  including  economic  integration  between  Pre-Accession  countries,  Neighbourhood 
countries and the Union.  

The Commission and the EIB, in consultation with the EEAS, finalised an updated version6 of 
the  Regional  Technical  Operational  Guidelines  applicable  to  the  2014-2020  EIB  operations 
under  EU  guarantee.  The  Guidelines  provide  guidance  for  aligning  the  scope  of  the  EIB’s 
interventions  in  different  regions  with  EU  policies,  programmes  and  instruments.  The 
Guidelines have been transmitted to the European Parliament and Council in May 2015. The 
contribution to the Mandate's objectives is reflected in the following chart taking into account 
both the 2014 operations under the Mandate and under the own-risk facilities. Almost half of 
operations  contribute  to  more  than  one  objective.  This  is  particularly  relevant  in  climate 
action projects.  

6 See Commission's SWD(2015) 106 final 

7 

 
 
 
                                                            
Chart 2: Contribution to mandate objectives (% and amount contribution) 

Local private sector development, in particular support to SMEs 

The  EIB  supports  local  private  sector  development  in  different  ways,  most  commonly  by 
extending credit lines to local financial intermediaries (mainly banks) for on-lending to small 
and medium enterprises, participation in private equity funds and risk capital to high-growth 
potential  companies;  equity  finance  for  microfinance  providers,  and  direct  loans  to  larger 
companies.  

In  2014,  the  EIB  signed  EUR  2.7  billion  financing  for  39  operations that  will  support  local 
private  sector  development  in  Mandate  regions.  Of  the  39  operations,  33  relate  to  new 
operations  having  their  first  signature  in  2014  of  which  most  are  intermediated  operations, 
mainly  credit  lines  supporting  SMEs  and  Mid-Caps  (21  operations).  Similarly  to  previous 
years, the majority of new credit lines were signed in the Pre-Accession region, under the EIB 
own-risk  Pre-Accession  Facility  providing  support  to  enterprises  to  modernise,  expand  and 
apply  EU  standards.  4  new  microfinance  investment  vehicles  or  private  equity  funds  have 
been  launched  in  the  Mediterranean  region.  In  addition,  8  direct  financing  operations 
(including  3  infrastructure  projects)  support  local  private  sector  development  either  fully  or 
partially.  

Development of social and economic infrastructure 

The  EIB  signed  a  total  of  EUR  4.1  billion  whereby  41  operations  signed  are  new  projects 
worth  EUR  3.7  billion  in  order  to  help  developing  social  and  economic  infrastructure  in 
various  sectors  (energy, 
transport,  water  and  sanitation,  health,  education,  urban 
development). The EIB signed contracts for 15 new projects in the energy sector in 2014, of 
which 6 are energy generation projects. The EIB also supported the development of electricity 

8 

 
 
 
and  gas  networks  with  two  projects  focusing  exclusively  on  extending  and  upgrading 
electricity  networks  to  improve  reliability  and  efficiency  and  to  reach  more  households  and 
businesses. 7 new projects were signed by the EIB in the transport sector, 6 new projects in 
the  water  and  sewerage  sector  and  5  urban  development  projects.  Detailed  information  on 
financed projects are provided in the SWD.  

Climate change mitigation and adaptation 

EIB support to climate action remained high in 2014, with total signatures of EUR 2.1 billion, 
representing 31% of all signatures in the Mandate regions. This level is similar to the previous 
year’s record and is well above the EIB’s global target of 25% of overall lending7. 

The  vast  majority  (88%)  of  climate  action  lending  is  related  to  investments  in  renewable 
energy, energy efficiency and sustainable transport. EIB’s lending climate components in the 
area of climate adaptation stands at 2% of climate lendings, reflecting developing countries’ 
lack  of  appetite  in  borrowing  for  adaptation  as  well  as  the  limited  attractiveness  that  this 
sector has for private sector investors. However, recognising that the regions covered by the 
Decision  are  particularly  vulnerable  to  current  climate  variability  and  to  future  climate 
change, the EIB is increasing the integration of climate resilience into projects. This includes 
supporting  technical  assistance  and  appropriate  planning  measures  as  well  as  supporting 
specific adaptation investments such as flood control and defence measures.  

Climate  action  lending  remained  strong  in  Asia  with  almost  68%  of  signatures,  it  reached 
54%  in  Latin  America,  and  100%  of  the  new  financing  operations  in  South  Africa.  In  the 
Mediterranean,  31%  of  the  financing  signed  in  2014  supported  climate  action.  Substantial 
amounts of climate action finance were also mobilised for projects in the Pre-Accession and 
Eastern Neighbourhood regions, but the overall proportion is less in the light of other strong 
lending priorities, notably private sector development. 

Table 5: Climate Action lending in 2014 in the regions covered by the Decision 

EUR million 

Mediterranean  

Pre-Accession  

Asia  

Latin America  

South Africa   

Eastern Neighbours, Russia   

Central Asia  

Total in Mandate Regions   

as % of total signed  

Climate Action under 

Mandate 

Own-risk 
Facilities 

Total climate 
action  

as % of total 
signed  

505 

273 

45 

200 

175 

137 

  -     

1.334 

32% 

  -     

227 

400 

150 

  -     

  -     

  -     

777 

30% 

505 

500 

445 

350 

175 

137 

  -     

2.112 

31% 

21% 

68% 

54% 

100% 

12% 

0% 

31% 

7 Article 3.7 of Decision 466/2014/EU requires that over 2014-2020, EIB volume of climate change mitigation 

and adaptation projects shall represent at least 25% of total EIB financing operations. 

9 

 
 
 
 
  
  
 
                                                            
Regional integration 

In  2014,  the  EIB  signed  a  total  of  23  financing  contracts  worth  EUR  1.6  billion  (EUR  1.1 
billion in 2013) contributing to regional integration. Eight credit lines (EUR 795 million) will 
support  regional 
international 
collaboration  and  by  supporting  the  convergence  of  economies  towards  the  EU.  In  the 
transport sector, projects aim at facilitating the mobility across borders (EUR 253 million) and 
in the energy sector, projects are key in enhancing access to energy in countries that may lack 
natural energy resources (EUR 293 million).  

integration  in  the  Pre-Accession  region  by  fostering 

3.3. 

IMPACT AND VALUE ADDED OF EIB OPERATIONS 

The ReM framework provides an assessment of the EIB financing operations throughout their 
lifecycle.  It  helps  to  select  sound  projects  which  are  in  line  with  EU  priorities  based  on 
concrete  results,  and  where  the  EIB  involvement  will  add  value.  At  appraisal  stage,  results 
indicators  are  identified,  with  baselines  and  targets  that  capture  expected  economic,  social, 
and  environmental  outcomes  of  the  operation.  Achievement  against  these  specified 
performance benchmarks is monitored throughout the project life and reported at two major 
milestones: at project completion and 3 years after project completion ("post completion") for 
direct operations; at the end of the investment period and at the end of life of private equity 
funds; and at the end of the allocation period for intermediated lending. 

Projects are rated according to three "Pillars": 

Pillar  1  rates  the  expected  contribution  to  the  EU  and  the  countries'  priorities  and 

(i) 
eligibility under EIB mandate objectives. 

(ii) 

Pillar 2 rates the quality and soundness of the operation, based on the expected results. 

(iii) 

Pillar 3 rates expected EIB financial and non-financial additionality. 

In 2014, 8 operations approved under the ReM framework reached completion. The results of 
the ReM Project Completion Reviews are summarised in the SWD. Since it will take several 
years for actual results to be produced by operations under the ReM framework, six selected 
case  studies  in  the  SWD  present  actual  results  achieved  by  projects  under  implementation. 
The expected results are presented below and discussed for EIB financing operations signed 
in 2014 in the regions covered by the Mandate. In order to avoid double counting of projects 
and  expected  results,  the  report  will  refer  only  to  the  expected  results  and  additionality  of 
“new projects”, i.e. those for which the first financing contract was signed in 2014 – 64 new 
projects. 

10 

 
 
 
 
Chart 3: ReM ratings by pillar for 2014 new signed operations 

100%

80%

60%

40%

20%

0%

28 

36 

Pillar 1

9 

49 

6 

Pillar 2

9 

46 

9 

Pillar 3

P1&2: Marginal
P3: Low

P1&2: Acceptable
P3: Moderate

P1&2: Good
P3: Significant

P1&2: Excellent
P3: High

In terms of strength of contribution to objectives (ReM Pillar 1), more than 40% of the 2014 
new signatures were rated as “excellent”, meaning a high contribution to both the countries' 
own  development  objectives  and  the  EU  priorities  for  the  country  and/or  region  concerned. 
The remainder of the operations rated “good” under Pillar 1. Those projects that are expected 
to  make  a  "good"  contribution  are  in  line  with  mandate  objectives  and  could  make  a  high 
contribution  to  either  the  country's  own  development  objectives  or  those  of  the  EU  and  a 
moderate contribution to the other. 

For directly financed projects (ReM Pillar 2), rating is based on project soundness, financial 
and  economic  sustainability  and  environmental  and  social  sustainability.  For  intermediated 
operations,  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.  

Pillar  2  shows  that  14%  of  new  operations  signed  are  expected  to  make  an  excellent  rating 
including  direct  operations  with  an  economic  rate  of  return  (ERR)  greater  than  15%,  or 
intermediated operations (credit lines) which make an exceptional contribution to increasing 
access  to  finance  as  well  as  developing  the  financial  sector,  in  a  relatively  low  risk 
environment. More than 76% of new operations are expected to be "good". These are direct 
operations  with  an  average  ERR  of  10%  to  15%  in  the  case  of  infrastructure  projects,  or 
intermediated operations which contribute to increasing access to finance and financial sector 
development  yet  in  a  high  risk  environment  with  less  likelihood  of  results.  Six  projects 
received an “acceptable” rating, primarily because of high risk environments that impact on 
the probability of achieving planned results. 

Additionality” (ReM Pillar 3) is measured by the difference between the EIB contribution to 
an  investment  project  and  standard  market  finance,  in  three  dimensions:  the  adequacy  of 
financial resources for the needs of projects; EIB’s technical contribution; and the impact in 
terms  of  raising  standards  and  facilitating  contributions  from  other  sources.  In  2014,  all 
operations  were  expected  to  bring  advantage  to  borrowers  compared  to  market  finance. 
Results of the ReM shows that 14% of new operations signed in 2014 are expected to have 
high additionality - typically, extending the longest maturity of debt available to the borrower 

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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  70%  are  expected  to  make  good  contribution,  providing  significant 
additionality  -  typically,  combining  significant  financial  additionality  with  significant 
technical  and  sector  contribution  or  standards  and  assurance.  The  14%  of  signed  operations 
that  were  rated  as  expecting  moderate  additionality  were  typically  standard  products  where 
limited contribution to project design, structuring or implementation was necessary.  

4. 

EIB COOPERATION WITH OTHERS 

4.1 COOPERATION WITH THE COMMISSION  

The Mandate requests that the Commission, the EEAS and the EIB cooperate and strengthen 
the  alignment  of  EIB  external  actions  and  EU  external  policy  objectives,  with  a  view  to 
maximising synergies between EIB financing and EU budgetary resources, mainly through a 
regular  and  systematic  dialogue  and  early  consultation  on  policies,  strategies  and  project 
pipelines.  In  2014,  the  Memorandum  of  Understanding  (revised  in  2013)  between  the 
Commission,  EEAS  and  the  EIB  in  respect  of  cooperation  and  coordination  in  the  regions 
covered by the Mandate continues to be applied – e.g.  through exchange of information on 
project pipeline and contact information.  

In  order  to reflect and operationalize the new Mandate for 2014-2020, the Commission and 
the  EIB  negotiated  and  signed  a  revised  guarantee  agreement  and  a  recovery  agreement  in 
July 2014. 

In its operational plan, EIB committed to lend EUR 3 billion to Ukraine during 2014-2016 in 
the  context  of  the  EU’s  initiative  to  provide  support  to  Ukraine.  In  compliance  with  the 
Council  decisions  and  conclusions,  the  EIB  suspended  all  origination  and  due  diligence 
activities  on  operations  in  Russia.  In  June  2014,  Georgia,  Moldova  and  Ukraine  signed 
Association Agreements with the EU.  

In  the  South,  the  EIB  renewed  its  partnership  with  the  EC,  through  the  Neighbourhood 
Investment  Facility  (NIF),  to  propose  a  new  risk  capital  facility,  worth  up  to  EUR  300 
million. The EIB will invest, alongside the EU, by contributing up to EUR 200 million of own 
resource funding. 

Two new framework agreements were signed in 2014 with the Kingdom of Cambodia and the 
Kingdom of Bhutan paving the way for EIB operations in these countries. 

The EIB continued to actively participate in the regional blending mechanisms in 2014. The 
EIB  closely  cooperated  with  the  Commission  in  the  technical  group  of  experts  of  the  EU 
Platform  for  Blending  in  External  Cooperation  (EUBEC).  In  this  context,  the  EIB  actively 
participated in the technical group on "Provide guidance on the mobilisation of private sector 
resources, including through PPPs" and in the technical group on climate change financing.  

During 2014, EIB adopted four Public Policy Goals (PPGs) to further increase coherence of 
EIB activities with EU policies. While recognising the reporting requirements of the Mandate, 
the EIB believes that this also provides an opportunity to harmonise how the EIB reports and 
communicates  on  its  lending  operations  inside  and  outside  the  EU.  The  four  PPGs  are: 
innovation,  SME  &  Mid-caps  finance,  infrastructure  and  environment.  In  addition  to  these, 

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the  EIB  sets  two  cross-cutting  goals,  namely  climate  change  and  economic  and  social 
cohesion in the EU.  

Following the  OECD  Global Forum on Transparency and Exchange  of Information  for Tax 
Purposes, Plenary session in November 2013 in Jakarta, EIB has approved and published in 
March 2014 an Addendum to the NCJ Policy8. Under strict deadlines and conditions and in 
line with peer institutions, the addendum to the NCJ Policy introduces a limited suspension to 
the application of the relocation requirements for those jurisdictions who have committed to 
taking  adequate  remedial  action  to  address  deficiencies  identified  by  the  OECD  Global 
Forum. 

EIB  also  hosted  a  Compliance  Summit  with  all  IFIs,  FATF,  OECD  Global  Forum,  ECB, 
EBA,  Transparency  International  and  a  Civil  Society  Seminar  with  NGOs  on  NCJ  and 
taxation-related issues during 2014. 

4.2. COOPERATION WITH EUROPEAN OMBUDSMAN 

The Memorandum of Understanding 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 existence of an effective internal Complaints Mechanism (the EIB-CM) that deals 
with complaints lodged by external parties to the EIB across all the business units of the EIB; 

• 
Concerning  complaints  related  to  operations  outside  the  EU,  including  the  External 
Mandates, the European Ombudsman commits 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  scope  of  the  EO's  review,  with  the  recognition  of  the  EIB-CM  as  the  required 

• 
prior approach. 

In  2014,  the  EO  processed  2  complaints  about  allegations  on  possible  maladministration  of 
the  EIB  concerning  projects  being  implemented  in  ELM  countries.  In  Bosnia  and 
Herzegovina  the  EO  concluded  in  favor  of  the  complainant  and  EIB  will  continue  to 
cooperate  with  EO  to  develop  an  appropriate  response.  In  Egypt,  the  EU  closed  the  file  in 
2014 with no maladministration found. 

4.3. COOPERATION WITH INTERNATIONAL FINANCING INSTITUTIONS  

Cooperation with other International Financial Institutions (IFIs) is an integral part of the EIB 
activities,  ranging  from  dialogue  on  institutional  matters,  horizontal  topics  and  thematic 
issues,  and  mutual  consultation,  to  enhanced  forms  of  operational  co-financing  and  work 
sharing.  Dialogues  between  IFIs  mostly  takes  place  within  specialised  working  groups 
meeting periodically to share best practices or to address specific issues.  

8 http://www.eib.org/about/documents/ncj-policy-addendum.htm 

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In  2014,  the  EIB  has  been  working  with  other  Multilateral  Development  Banks  on  the  post 
2015 Development Agenda and particularly on developing a common approach to roles with 
respect to Financing for Development.  

The EIB Roadmap for the Mediterranean endorsed by the Ministers at the FEMIP Ministerial 
Meeting held in Athens acts as a guide for EIB cooperation in the Southern neighbourhood.  

Another  2014  highlight  was  the  announcement  of  the  CAMENA  Climate  Action  envelope 
under the FEMIP Trust Fund with GBP 15 million funding to be provided by the UK in order 
to establish an envelope to build capacity and prepare new climate investments in the South. 
The first CAMENA-financed projects are expected to be approved in 2015. 

Cooperation between the EIB and the Union for the Mediterranean Secretariat was reinforced 
in 2014 through a renewed Memorandum of Understanding, signed in ensuring continuity of 
the close partnership already established between the two institutions. 

The  EIB  partnered  with  the  International  Labour  Organisation  (ILO)  to  study  ways  to 
“Maximise  the  employment  impact  of  the  EIB’s  infrastructure  projects”,  within  the  broader 
framework of the ILO’s programme on Employment-Intensive Investment. 

During  2014,  EIB  coordinated  the  work  of  the  group  to  produce  the  Joint  Report  of  2013 
MDB  Climate  Finance  and  published  the  report  for  the  UN  Secretary  General’s  New  York 
Climate  Summit.  As  part  of  this  work,  EIB  was  involved  with  the  OECD  in  their  work  to 
update  Rio  Markers  for  Climate  finance,  as  well  as  contributing  on  behalf  of  the  MDBs’ 
group to the UNFCCC Biennial Assessment of Climate Finance - December 2014. 

Under  the  Mandate,  approximately  48%  of  signatures  were  co-financed  with  other  IFIs  and 
20%  of  operations  signed  in  2014  were  associated  with  a  grant  component  from  the  EU 
budget.  In  addition  to  two  operations  co-financed  with  the  AFD  and  KfW,  the  EIB  led  six 
additional  operations  during  2014,  making  the  EIB  the  largest  financier  in  the  NIF,  having 
been involved as either lead financier or co-financier in 66% of projects approved by the NIF 
Board  since  the  inception  of  the  facility.  Under  the  EU’s  regional  blending  facilities,  2014 
approvals comprised EUR 132.7 million of EU budget resources complementing EIB loans in 
the NIF, EUR 10.18 million in the Western Balkan Investment Facility and EUR 5 million in 
the Asian Investment Facility.  

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