COMMISSION STAFF WORKING DOCUMENT Accompanying the document 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  SWD(2015) 285 final   COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON 2014 EIB EXTERNAL ACTIVITY WITH EU BUDGETARY GUARANTEE {COM(2015) 649 final}  
 
 
1. 

INTRODUCTION AND OVERVIEW 

This Staff Working Document (SWD) reviews the implementation of the current EIB external 
mandate at project, sector, country and regional levels in 2014 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.  According  to  the  Decision  466/2014/EU  of  the  European 
Parliament and of the Council of 16 April 2014, article 11.2 stipulates that for the purposes of 
the Commission's reporting, the EIB shall provide the Commission with yearly reports on EIB 
financing operations carried out under this Decision including all necessary elements allowing 
the  Commission  to  report.  Therefore,  facts  and  figures  mentioned  in  section  3  regarding  the 
overall contribution to EU policy objectives and in section 4 on actual and expected results of 
EIB  operations  resulting  from  the  EIB's  results  measurement  framework  (ReM)  are  mainly 
based on information provided by the EIB. 

The tables below summarise the overall EIB external lending activity oover the period 2007-
2014: overall signatures (Table 1), the signatures under EU guarantee (Table 2), the signatures 
under EIB own risk facilities (Table 3). 

Table 1: Overview of overall EIB lending signatures outside the EU (all resources) 

NB:  Lending  in  ACP  countries/OCts  and  EFTA  countries  are  provided  for  information.  Volumes  in  2007-2012  include  EUR  2billion  signed 
under the Pre-Accession Facility in Croatia before its accession to the EU. Implementation of the Mandate 2014-2020 started in July 2014. 

Table 2: EIB lending signatures under EU guarantee 

Table 3: EIB lending signatures under EIB own risk facilities 

EUR m 

2007 

2008 

2009 

2010 

2011 

2012 

2013 

2014 

Pre-Accession  

1.176  

1.444  

1.450  

1.796  

2.358  

2.285  

1.998  

Mediterranean  

185  

33  

56  

516  

39  

11  

               -    

Eastern Neighb, 
Russia  

                -    

                -     

               -    

               -    

101  

               -    

Asia, Latin America  

500   ……………….  

200  

579  

861  

250  

119  

242  

South Africa  

                -    

                -    

               -    

               -    

50  

               -    

               -    

1.815 

230 

-  

550 

-  

Total 

1.861  

1.477  

1.707  

2.891  

3.409  

2.546  

2.359  

2.595 

2 

EUR m20072008200920102011201220132014 Pre-Accession 2.909             3.473            4.309              3.430             3.406              3.106          2.958          2.436             Mediterranean  1.438             1.290            1.596              2.547             975                 1.689          583             1.612             Eastern Neighbours, Russia  230                170               233                 631                776                 934             1.805          1.176             Asia and Latin America925                469               1.251              1.222             1.182              700             1.248          1.370             South Africa  113                203               280                 50                  165                 100             260             175                Total in Mandate Regions  5.6155.6047.6697.8806.5046.5296.8546.768 ACP countries/OCTs 742                567               822                 967                580                 644             728             993                EFTA countries  146                                -    170                 50                  200                 236             144             62                  Total Signatures outside EU  6.5036.1728.6618.8977.2847.4097.7257.823EUR m20072008200920102011201220132014Pre-Accession           389         2.009         2.859         1.535         1.024            821            960                621 Mediterranean        1.205         1.195         1.510         2.009            926         1.655            530             1.382 Eastern Neighb, Russia              -              170            233            631            675            934         1.686             1.176 Asia, Latin America           305            469         1.051            643            310            450            997                820 South Africa              -              203            280              50            115            100            260                175 General Mandate Total        1.899         4.045         5.932         4.867         3.050         3.960         4.433             4.174  
 
 
 
2 

EIB CORPORATE RESPONSIBILITY 

The EIB contributes to sustainable development and is  held accountable by stakeholders and 
society.  In  2014  the  EIB  established  a  separate  Corporate  Responsibility  Department  to 
promote further integration of sustainability standards and practices into its activities. 

As a rule, EIB activities and decisions are driven by EU policy and its operations are governed 
by the need to improve environmental and social impacts:  

 

integrating high environmental and social standards in its business activities; 

  ensuring  strong  governance,  transparency  and  accountability,  for  the  EIB  and  for 

counterparts; 

  minimising its own environmental footprint. 

2.1 

Transparency, governance and accountability  

In  2014,  EIB  worked  on  the  revision  of  its  Transparency  Policy  from  2010  including  an 
extensive public consultation. It aims to set out the EIB Group’s approach to transparency and 
stakeholder  engagement  and  to  define  the  EIB  procedures  concerning  information  requests 
from the public as well as the information that the EIB makes routinely available to the public. 
(The new transparency policy was meanwhile adopted in March 2015). 

2.1.1  International Aid Transparency Initiative (IATI) 

The International Aid Transparency Initiative (IATI) has been operating since 2011 and allows 
organisations involved in development, including donor and developing countries, civil society 
organisations  and  other  experts  in  aid  information,  to  increase  the  transparency  of  aid  and 
development finance.  During 2014, the EIB was an active participant within the consultation 
process  coordinated  by  the  IATI  Secretariat,  to  set  in  place  an  implementation  schedule  for 
IFIs and DFIs. This schedule has been co-presented by IATI programme manager and the EIB 
during the IATI Steering Committee in October 2014. 

In  September  2014,  EIB  published  the  first  set  of  data  and  information  on  its  operations 
outside the EU based on the IATI reporting standard. Having joined IATI in October 2013 and 
now publishing to its standard reflects EIB's commitment to transparency and accountability in 
the use of its resources and further improves public access to information on EIB's activities. 

2.1.2  Transparency and monitoring of investment projects 

All projects financed by the EIB are published at least 3 weeks before they are considered for 
approval  by  the  EIB  Board  of  Directors.  On  2  January  2014,  the  EIB  officially  launched  its 
Environmental  Public  Register  of  documents,  which  has  been  established  under  the  EC 
Regulation  1367/2006  regarding  public  access  to  environmental  information  to  Community 
institutions  and  bodies.  It  contains  the  Environmental  and  Social  Data  Sheets  (ESDS)  of  all 
concerned  projects  approved  since  2013,  including  those  financed  under  the  ELM  and  is 
continuously updated. All documents are linked with the corresponding project summaries to 
put them into context. 

The EIB monitors the projects it finances throughout their life cycle, with financial monitoring 
from the loan signature through the project implementation and operation phase until the end 
of  the  contractual  relation  with  the  project,  i.e.  final  repayment.  Physical  monitoring  of  the 
project  continues  after  completion,  to  follow  up  on  results  and  outcomes  after  one  year  and 

3 

 
 
then after three  further years of operation. If deemed necessary, the physical  monitoring can 
continue for longer. When projects financed under the new mandate reach completion, EIB is 
preparing to make, where possible, relevant project completion reports available to the public, 
excluding  confidential  information.  The  EIB  is  also  developing  Environmental  and  Social 
Completion  Sheets  (ESCS)  that  will  provide  the  EIB’s  assessment  of  project-related 
environmental and social aspects at project completion stage for all the investment projects it 
finances, increasing the transparency of its financing operations. 

2.2 

Compliance 

The  independent  EIB  Compliance  function  promotes  the  highest  standards  of  integrity  and 
ensures that they are applied to all of the EIB’s activities, as outlined in EIB's integrity policy 
and  compliance  charter.  It  strongly  supports  a  corporate  culture  based  on  ethical  values  and 
professional  conduct  as  well  as  combating  money  laundering  and  the  financing  of  terrorism. 
As such, compliance is integral to the EIB’s ethical, professional and business approach.  

Areas of activity within Compliance include: 

 

 

integrity checks on operations and counterparties 

integrity of staff and governing bodies (ethics) 

  ensuring that procurement selection procedures comply with internal rules. 

Furthermore, the EIB adheres to the Basel Committee on Banking Supervision’s definition of 
compliance  risk  as  “risk  of  legal  or  regulatory  sanctions,  material  financial  loss,  or  loss  to 
reputation” to which an EIB Group member may be exposed, arising from a failure to comply 
with applicable laws, rules and regulations. 

2.3 

Environmental and Social standards  

EIB’s Environmental and Social Framework articulates the commitment to environmental and 
social sustainability and the protection and respect of human rights. This framework comprises 
the EIB Statement of Environment and Social Principles and Standards 2009, and the ten EIB 
Environment and Social Standards 2013. These ten Standards are directed towards promoters 
and provide the requirements and guidance on how to identify risks, impacts and opportunities. 
They are designed to help avoid, mitigate, remedy and manage risks and impacts; intrinsically 
linking this to doing business in a sustainable way while, in relation to project-level activities, 
improving  transparency,  accountability  and  better  engaging  with  the  local  communities 
affected by EIB operations.  

The  Standards  also  reflect  the  evolution  in  good  practice  for  sustainability,  and  are  aligned 
with  the  policy  objectives  enshrined  in  several  key  environment  and  human  rights-related 
reference documents and policies of the EU. Central to these ten Standards are human rights 
considerations, climate change, biodiversity and ecosystems and resource efficiency. The EIB 
reviews  each  project  to  ensure  that  they  are  consistent  with  the  relevant  standards  and 
international best practice. 

2.4  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.  Human  rights 
considerations  are  an  integral  feature  of  the  EIB  Statement  of  Environmental  and  Social 
Principles  and  Standards  which  provides  that  the  EIB  “restricts  its  financing  to  projects  that 

4 

 
 
respect  human  rights”.  This  is  partly  achieved  by  excluding  specific  types  of  projects  or 
activities  from  EIB  lendingi  and  effectively  complemented  by  comprehensive  due  diligence 
processes.  

Drawing guidance from the EU Charter for Fundamental Rights, the EU Strategic Framework 
and  Action  Plan  on  Human  Rights  and  Democracy  (2012),  the  UN  Guiding  Principles  for 
Business  and  Human  Rights  (UNGPs),  the  Renewed  EU  Strategy  2011-2014  for  Corporate 
Social Responsibility and the OECD Guidelines for Multinational Enterprises (2008), the EIB 
further  advanced  its  commitment  to  human  rights  and  in  late  2013  disclosed  its  revised 
Environmental  and  Social  Standards  which  effectively  integrate  human  rights  and  promotes 
robust,    human-rights-responsive  due  diligence  processes.  2014  marked  the  first  year  of  the 
revised Standards’ application. It is foreseen that over the course of 2015 the EIB will assess 
the  effectiveness  of  the  new  framework  in  terms  of  its  responsiveness  to  human  rights 
considerations.  

2.5  Gender 

In  June  2014,  the  EIB  embarked  upon  a,  18-month-long  gender  mainstreaming  exercise, 
aiming to support the EIB services in the development of a strategic approach to gender, both 
in  terms  of  its  safeguards-based  due  diligence,  as  well  as  the  impact  of  its  lending.  This 
approach  is  expected  to  be  complemented  by  a  suite  of  procedures  and  tools  that  will 
effectively help mainstream gender in its operations. A Gender Action Plan is expected to be 
the key vehicle to articulate the undertaking of key activities and deliverables necessary for the 
application of gender mainstreaming going forward.  

3. 

OVERALL CONTRIBUTION TO EU POLICY OBJECTIVES 

The  objective  of  EIB  operations  under  the  Mandate  is  to  support  relevant  external  policy 
objectives of the EU. In particular, the Decision 466/2014/EU maintains specific policy goals 
to  be addressed  through EIB external operations in  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 EU 
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 (article 3.3 of the Decision). The EIB shall also undertake financing 
operations  in  eligible  countries  within  areas  covered  by  the  general  objectives  by supporting 
foreign direct investments that promote economic integration with the Union. 

5 

 
 
Comment  on  chart  1:  Each  project  financed  by  the  EIB  outside  the  EU  can  contribute  to 
several  ELM  objectives  at  the  same  time.  For  the  purposes  of  the  presentation,  when  an 
individual  operation  contributes  to  both  local  private  sector  development  and  to  the 
development of social or economic infrastructure, this contribution is prorated according to the 
assessed contribution to either i or ii general objective so that total contribution equals 100% 
of  EIB  financing.  Climate  action  and  regional  integration  are  recorded  as  “cross-cutting” 
issues on top of the 100%. 

In 2014, the EIB signed finance contracts totalling EUR 6.8billion in support of 72 investment 
projects  in  the  regions  covered  by  the  ELM.  The  largest  contribution  was  to  social  and 
economic infrastructure, in terms of both number of projects and signed volumes, followed by 
local private sector development. 23 projects, and a total of EUR 2.1billion is contributing to 
climate  change  mitigation  and  adaptation.  An  equal  number  (23  projects)  with  23%  of  total 
signature volume contributes to the regional integration objective. 

3.1. 

Local private sector development, in particular support to SMEs  

3.1.1. EIB's SME support framework 

Supporting  access  to  finance  for  SMEs  and  midcaps  is  a  top  priority  for  the  EIB  because  a 
dynamic private sector, in which entrepreneurs are able to obtain finance to implement sound 
business investments, is vital for job creation and inclusive growth. Furthermore, investments 
in the private sector have the greatest development impact and SMEs are important drivers of, 
private  sector  development,  employment  and  innovation,  as  well  as  growth  and  social 
inclusion.  

The  EIB  supports  local  private  sector  development  through  a  variety  of  channels  to  ensure 
increased  impact;  credit  lines  to  local  financial  intermediaries  to  on-lend  to  SMEs; 
participation  in  private  equity  funds  to  provide  expertise  and  risk  capital  to  high-growth 
potential  companies;  credit  lines  and  equity  finance  for  microfinance  providers  to  support 

6 

 
 
 
access to finance and basic financial services; and direct loans to larger companies where this 
is critical to realising wider developmental benefits, particularly job creation. 

3.1.2. Local private sector development in 2014 

EIB signed EUR 2.7 billion financing for 39 operations that will support local private sector 
development in ELM regions during 2014. Of the 39 operations, 33 relate to new operations 
having  the  first  signature  in  2014.  Most  are  intermediated  operations,  either  credit  lines 
supporting SMEs and Mid-Caps (21 operations), microfinance investment vehicles or private 
equity  funds  (4  operations)  .  Also  8  direct  financing  operations  (including  3  infrastructure 
projects) support local private sector development either fully or partially. 

Chart 4: Operations contributing to local private sector development by type of operation 

Total operations 2014 (in EUR million) 

Expected Results of new projects  

Lending  to  SMEs  and  Mid-Caps  through  credit  lines  to  local  financial  intermediaries  is 
important to both enhance access to longer-term funding, particularly for small businesses, and 
to  strengthen  local  financial  sectors.  Small  businesses  often  have  great  growth  potential,  but 
face financing constraints because of small size and information asymmetries such as a lack of 
credit history.  

By providing funds to entrepreneurs to start or expand their businesses, credit lines can help 
create employment, extend and improve services for customers, contribute to export earnings 
and  foster  competitive  local  markets.  In  many  contexts,  improving  access  to  formal  funding 
may  help  the  transition  of  informal  enterprises  into  the  formal  sector,  something  which  has 
further impacts on standards and access to credit.  

21 new credit lines in 2014 are expected to enable intermediaries to make more than 12 000 
loans  to  financial  beneficiary  businesses,  helping  to  sustain  more  than  370  000  jobs.  These 
loans, 96% of which will go to SMEs, are expected to have a total value of EUR 2.6 billion. A 
number  of  credit  lines  have  a  strong  focus  on  very  small  enterprises,  particularly  in  the 
agricultural sector in Turkey and Moldova.  

These credit lines will also extend the maturities of the loans offered to SME and Mid-Caps, 
with  the  average  loan  tenor  expected  to  be  5.4  years,  and  therefore  much  more  closely 
matching the economic life of investments than the maturities typically available to SMEs in 

7 

 
 
 
developing contexts. Expected results are reported for the EIB-financed amount only, and not 
for the matching funding provided by each promoter (as the aggregate expected results of both 
sources of funding were previously reported, the  figures presented here are lower than those 
presented in previous reports, but this does not reflect a real change in outcomes or impact). 

Table 10: Credit lines for SMEs, expected results by region – new operations 2014 

Expected Outputs 

Number of projects 

Total loans (EUR million) 

Total loans # 

Average loan size (EUR ‘000s) 

Average loan tenor (years)  

ALA 

EAST 

MED 

PA 

2 

350 

720 

486 

10.4 

4 

545 

1,810 

301 

9 

3 

170 

207 

821 

8 

12 

1,485 

9,728 

153 

5 

Many credit lines have a particular impact on the development of local financial sectors and 
their capacity to support private sector growth. They may enhance competition by supporting a 
second  tier  bank  expand  its  market  presence,  help  extend  the  range  of  products  offered  or 
enable banks to target currently underserved groups. 

Table 11: Credit lines supporting SMEs and mid-caps – new operations 2014 

EXPECTED OUTPUTS 

SMES 

MIDCAPS  OTHER  ALL 

EXPECTED OUTCOMES 

Total loans (EURmillion) 

Total loans # 

1 690 

11 934 

764 

309 

Average loan size (EUR ‘000s) 

137 

2 472 

Average loan tenor (years) 

5.5 

5.1 

46 

2 600 

Jobs sustained (total): 

222 

12 465 

In SMEs 

658 

5.2 

205 

5.4 

In Mid-Caps 

In other 

373 324 

226 893 

125 108 

21 323 

Number of credit lines: 

Increasing access to finance for underserved markets 

Increasing access to finance for first time borrowers 

Financing second tier bank, improving competition 

Lending in local currency 

Supporting introduction of new products 

Supporting lending in a shallow market 

5 

3 

1 

5 

2 

4 

Supporting the development of local 
financial sectors 

Increasing access to financial services for 
underserved segments 

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.    In  terms  of  lending  volume,  Eastern 
Neighbourhood was also an important beneficiary region, with new signatures including e.g. 

8 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR  120million  support  for  the  upgrading  of  the  agricultural  value  chain  in  Moldova  and  a 
large (EUR  400million)  loan  to  Ukrainian  banks  via  the  State.  This  loan  operation  will  help 
strengthen the capacity of private enterprises to stay in business during the crisis and remain 
able to participate in international trade. In the Mediterranean, new agreements were signed in 
Tunisia,  Egypt  and  Lebanon  with  focus  e.g.  on  high-growth  enterprises  and  on  industrial 
pollution  abatement.  In  Asia  and  Latin  America,  credit  lines  give  emphasis  to  renewable 
energy or energy efficiency projects undertaken by SMEs, or  to improving the conditions of 
financing working capital needs.  

Private  equity  funds  are  specialised  in  meeting  the  needs  of  start-ups  and  high-growth 
potential  companies  for  risk-absorbing  finance.  They  complement  this  finance  with 
professional  expertise  to  help  investee  firms  make  a  break-through  to  long-term  financial 
sustainability and growth. 

EIB  provides  private  equity  and  microfinance  support  by  using  third  party  resources  in  the 
Mediterranean. The Abraaj North Africa Fund II pools EUR 5million of EU budget resources 
and EUR 15million from the Agencia Española de Cooperación (via a partnership agreement) 
to support the growth of mid-market companies established in North Africa. This funding will 
be leveraged by a factor of nine by the EUR 180million fund. It will invest in 12 companies to 
create an estimated net total of 2 500 permanent jobs. An equity participation in First National 
Bank in the Lebanon will enable this second tier bank to extend financing to an additional 680 
SMEs. 

Arguably the most severe financial constraints are faced by micro-entrepreneurs, particularly 
women and those in rural areas that tend to be particularly underserved by financial systems. 
Microfinance combines social and economic development objectives to extend access to basic 
financial services to  secure and improve livelihoods and drive development from the ground 
up. 

Table 12: Microfinance – new operations 2014 

EXPECTED OUTPUTS 

EXPECTED OUTCOMES 

Loans to final beneficiaries (#): 

11,670 

Jobs sustained in final beneficiaries - 

Loans to final beneficiaries 

(EURmillion): 

Average loan size (EUR): 

Women as % of final beneficiaries: 

7.0 

557 

78% 

including self-employed (#): 

7,970 

In 2014, three new microfinance operations were signed in Morocco, Tunisia and Jordan. The 
microfinance  providers  being  financed  have  a  strong  focus  on  women  (78%  of  expected 
beneficiaries) and on very small scale lending, with an average expected loan size of EUR 557 
(EUR 500 on average for Attadmoune (AMSSF II) and Microfund for Women in Morocco and 
Jordan,  and  EUR  1500  on  average  for  Taysir  in  Tunisia).  These  loans  are  expected  to  help 
sustain nearly 8 000 jobs, including many self-employed persons. EIB finance is expected to 
be able to provide many micro-entrepreneurs with more than one loan over time, with funding 

9 

 
 
 
 
 
 
being  revolved  (for  this  reason  the  expected  number  of  loans  is  larger  than  expected  jobs 
sustained). 

A  credit  line  to  Microfund  for  Women  is  the  EIB’s  first  intervention  in  the  Jordanian 
Microfinance sector. In this instance, the EIB is supporting a well-established institution with a 
very  strong  focus  on  women  (95%  of  more  than  100  000  borrowers).    It  is  one  of  the  few 
microfinance  institutions  in  the  region  providing  micro-insurance  services  at  a  large  scale, 
therefore  further  contributing  to  the  improvement  of  living  conditions  amongst  the  poorest, 
through  cover  of  life  and  health  risks.  In  Tunisia,  by  contrast,  the  EIB  is  supporting  the 
establishment of a new microfinance institution, Taysir (see below) in a relatively underserved 
market. 

Taysir Microfinance 

The EIB is supporting the establishment of a new microfinance provider, Taysir, in Tunisia, a 
country  that  is  relatively  underserved  by  microfinance,  with  so  far  only  one  established 
provider.  

A  EUR  1million  loan  is  being  provided  under  the  FEMIP  Trust  Fund’s  impact  investing 
envelope  for  higher  risk  and  higher  impact  projects.  This  will  enable  Taysir  to  lend  and 
average  of  EUR  1500  to  670  micro-entrepreneurs.  70%  of  these  are  expected  to  be  women 
while  40%  are  expected  to  be  first  time  borrowers.  By  providing  a  subordinated, long-term, 
local currency loan at favourable pricing, the EIB is helping Taysir to become established and 
attract  additional  sources  of  finance.  EIB  requirements  will  also  mean  an  accelerated 
implementation  of  good  market  practices  in  fields  such  as  anti-money  laundering,  client 
protection  principles  and  environmental  standards.  The  establishment  of  Taysir  will  help  to 
diversify  the  financial  sector  and  extend  access  to  finance  to  groups  such  as  young  micro-
entrepreneurs and small farmers. 

Direct  loans  to  large  companies  also  support  local  private  sector  development,  particularly 
where  investment  activities  have  positive  knock-on  effects  for  the  local  economy,  regional 
integration or the environment. Public funding is important to ensure that such investment with 
positive externalities takes place.  

Examples of such new projects in 2014 include two R&D projects by Turkish manufacturers, 
in line with the priorities of the Instrument for Pre-Accession for Turkey. They will contribute 
to  both  local  economic  diversification  and  cross-border  R&D  cooperation,  supporting  the 
creation of the Euro-Mediterranean Innovation Space (EMIS). Another project with a Turkish 
ethylene manufacturer is expected to have positive effects on local downstream industries. In 
Ukraine, two projects will enhance local grain storage and processing capacity which is seen 
as important for enhancing resilience to the effects of climate change. 

Impact of local private sector development projects on employment 

Taken  together,  new  projects  in  2014  will  help  12  200  SMEs  and  Mid-Caps  and  8  000 
microenterprises gain access to finance. This is expected to help sustain around 381 000 jobs 
in these businesses. Direct loans to industry investment projects are expected to create 1 027 
permanent jobs and 6 150 person-years of employment during project implementation. 

10 

 
 
In 2014, the first 8 operations approved under the ReM framework reached completion. The 
completed operations are all credit lines for SMEs in Pre-Accession countries: 5 in Turkey, 2 
in Serbia and 1 in the Former Yugoslav Republic of Macedonia (FYROM). Credit lines tend to 
reach  completion  in  a  much  shorter  time  than  infrastructure  projects.  Due  to  the  level  of 
experience  of  the  financial  intermediaries  in  the  Pre-Accession  countries,  signature  and 
disbursement processes can be relatively fast.  An operation in FYROM is described in more 
detail in the Case Study. 

Table 13: Ex post results for eight credit lines 

Results Achieved  

Total loans (EUR million) 

Total loans # 

Average loan size (EUR ‘000s) 

Average investment size (EUR ‘000s) 

Average loan tenor (years) 

ALL 
SMES 

527 

937 

562 

863 

4.9 

MICRO 

SMALL  MEDIUM 

56 

204 

275 

458 

6 

163 

421 

388 

593 

5 

307 

312 

984 

1,692 

5 

MID-
CAPS 

183 

74 

2,473 

4,164 

4.4 

ALL 

710 

1,011 

702 

1,179  

4.8 

Jobs sustained  # 

53,888 

1,783 

12,308 

39,797 

51,656 

105,544 

The results achieved: These 8 operations helped to sustain over 100 000 jobs in beneficiary 
companies, approximately half of which were in Mid-caps. In total, EUR 710million was lent 
though  just  over  1  000  loans  that  went  overwhelmingly  to  SMEs,  the  companies  that  are 
typically confronted with the most severe credit constraints. Loans to SMEs were on the small 
side averaging around EUR 560 000. Manufacturing was the sector that benefitted most, with 
38% of total lending. This was followed by the wholesale and retail sector (35%, and transport 
(9%).  Investment  projects  financed  included  a  small  scale  Hydropower  plant  in  Macedonia, 
new machinery for a small food processing business and a production facility for a polyester 
manufacturer, both in Turkey. 

Additionality through extended maturities: The average tenor of the loans provided to final 
beneficiaries was 4.8 years. For microenterprises, the average tenor offered was as much as 6.1 
years. These are much higher durations than SMEs and mid-caps are typically able to obtain in 
these  markets  and  will  have  helped  the  beneficiary  companies  to  carry-out  long-term 
investments – such as investments in machinery and equipment – which raise productivity but 
require a longer pay-back period. 

3.2. 

Development of social and economic infrastructure 

3.2.1. EIB's social and economic infrastructure framework 

The development of social and economic infrastructure is a top priority, reflected by the fact 
Infrastructure  is  one  of  the  four  EIB  Public  Policy  Goals.  Investments  in  this  priority  sector 
provide a foundation for economic growth, job creation and social development as well as for 
regional integration. On this basis, the EIB will continue to support infrastructure projects in 

11 

 
 
 
  
 
 
 
 
 
 
 
its  traditional  sectors  of  intervention:  energy,  transport,  water  and  sanitation,  urban 
development,  and  health  and  education.  It  is  expected  that  the  current  focus  on  energy  and 
transport will be maintained, given that these two sectors continue to account for a large share 
of investment needs. 

3.2.2. Social and economic infrastructure action in 2014 

In 2014, the EIB signed a total of 41 new operations worth EUR 3.7 billion in order to help 
developing social and economic infrastructure in various sectors. Additionally, contracts for a 
further  EUR  388  million  were  signed  as  second  or  later  financing  tranches  for  projects  first 
signed and reported on in previous years. 

Highlights of the 411 new infrastructure projects signed in 2014 include: 

  15 energy sector projects that will generate 6 668GWh a year and support the energy 

needs of 678 000 households.  

  7 transport projects expected to save road users and rail passengers a total of 39million 

hours a year and achieve operating cost savings of EUR 78million a year.  

  6  water  sector  projects  expected  to  improve  the  supply  of  safe  water  for  3.3  million 

people, and 

  5  urban  development  projects  expected  to  provide  improved  housing  for  23  500 

households. 

 

Chart 3: Projects signed in 2014 contributing to economic and social infrastructure by sector 

Note: Some projects are multi-sector. Lending volumes for these projects are prorated. 

1 29 of the 41 operations have been signed under the ELM 

12 

 
 
 
 
 
                                                            
• 

Expected results of new projects: Energy sector 

EIB  prioritises  energy  generation  from  renewables,  energy  efficiency  and  effective  energy 
networks. Many of the key challenges in this sector are institutional and policy-related. These 
include  inadequate  expertise,  inappropriate  regulation,  fossil  fuel  subsidy  usage  or  weak 
private  sector  participation.In  this  context,  the  EIB  can  add  value  by  mobilising  technical 
assistance and providing advice, often in cooperation with other IFIs.  

The  EIB  signed  contracts  for  15  new  projects  in  the  energy  sector  in  2014.  Among  these,  6 
energy  generation  projects  are  expected  to  add  1  091MW  of  generation  capacity,  enough  to 
serve  an  additional  678  000  households.  Projects  to  extend  and  improve  the  transmission  of 
electricity and gas will improve efficiency and extend essential energy supplies. Over 23 600 
households are expected to benefit from additional connections to electricity networks. 

# PROJECTS: 

DEVELOPING: 

TOTAL INVESTMENT COST: 

APPROVED EIB FINANCE: 

Table 5: Energy – new projects overview 

15 

generation from renewables (5) 

generation from gas (1) 

gas production and transport (2) 

power distribution (2) 

facilities for renewable energy and energy efficiency projects (5) 

EUR 8.3billion 

EUR 2.2billion 

EXPECTED OUTPUTS 

EXPECTED OUTCOMES 

Annual electricity production: 

6 668 GWh 

Generation capacity: 

1091 MW 

Households potentially served:  

Annual savings from import reduction or 
export gains: 

678 000 

EUR 
108million 

Power transmission substations constructed or 
upgraded: 

Power lines constructed or upgraded: 

146 

Additional annual electricity transported: 

6 354 GWh 

3 623 km 

New households connected: 

23 640 

Gas pipelines constructed: 

501 km 

  Gas transported per year: 

Gas production capacity (barrel of oil equiv. pa): 

60million 

Savings from reduced imports: 

249 900 GWh 

EUR 
190million/ yr 

Projects increasing energy generation and distribution 
efficiency: 

4 

Energy savings per year: 

1 694 GWh 

13 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One of the 6 energy generation projects signed in 2014 is the El Shabab Power Plant project in 
Egypt and this year's only fossil-fuel based generation project is about energy efficiency: the 
project will convert an existing open cycle gas turbine power plant to modern combined-cycle 
technology, generating an additional supply of 4 672 GWh/year through improved efficiency, 
without needing to increase the quantity of gas used as fuel. 

The  EIB  also  supports  the  development  of  electricity  and  gas  networks  which  increase  the 
rational  use  of  energy  and  economic  development  through  regional  integration,  enhancing 
reliability  and  security  of  supply  and  increasing  access  to  affordable  energy.  Two  projects 
focus exclusively  on extending and upgrading  electricity  networks to improve reliability and 
efficiency and to reach more households and businesses. For example, the Tajik-Kyrgyz Power 
Interconnection project will re-establish regional electricity trade and ensure continuous power 
supply in Tajikistan.  

The Urengoy-Pomary-Uzhgorod Gas Pipeline project, meanwhile, which comes under the EU 
support package for Ukraine, involves the replacement of two compressor units and 119 km of 
corroded sections  on a pipeline which transports natural gas from Russia to  Ukraine and the 
EU. The investment will reduce the fuel consumption of each compressor unit from around 9 
000  m3  of  gas  per  operating  hour  to  7  000  m3  per  hour  while  at  the  same  time  improving 
security of supply and extend the operational reliability of the pipeline. 

Also in the gas sector, the ETAP South Tunisian Gas project will allow gas discovered in the 
south  of  Tunisia  to  be  delivered  to  the  north  of  the  country.  With  a  total  investment  cost  of 
more than EUR 1 billion, it will save Tunisia EUR 190 million per year in terms of avoided 
imports of oil products and it will generate EUR 50 million per year of additional government 
revenue.  Furthermore,  EIB  will  provide  financing  through  five  new  intermediated  loans  to 
smaller renewable energy and energy efficiency projects, mostly in the private sector including 
two  projects  in  India.  A  further  two  loans  in  Turkey  will  finance  energy  and  environmental 
improvements in industrial processes.  

• 

Expected results of new projects: Transport sector 

EIB involvement in the transport sector ensures that projects meet international environmental 
standards,  social  implications  of  project  interventions  are  adequately  addressed,  and  good 
procurement practices are followed. 

Table 6: Transport – new projects overview 

# PROJECTS: 

TOTAL INVESTMENT COST: 

APPROVED EIB FINANCE: 

EXPECTED OUTPUTS 

EXPECTED OUTCOMES 

Length of roads built/upgraded (lane km): 

3 293 

   Vehicles/day benefitting: 

   Road fatalities avoided (lives/year): 

Time savings (hour/year): 

Annual vehicle operating cost savings: 

7 

EUR 1.76billion 

EUR 609million 

41 900 

117 

21million 

EUR 
71million 

14 

 
 
  
  
  
New urban transport trains: 

73 

Length of track built or upgraded: 

1.8 km 

   # passengers benefitting annually: 

518million  

   Passenger time savings (hours/year): 

18million 

   Annual operating cost savings: 

EUR 7million 

   Additional cargo carried (tonnes/year): 

300 000 

The  EIB  signed  contracts  for  7  new  projects  in  the  transport  sector  in  2014.  As  indicated  in 
Table  5,  every  year,  these  projects  are  expected  to  achieve  some  39million  hours  of  time 
savings for road and rail passengers, and EUR 78million in saved operating costs, as well as 
significant safety improvements.  

For  example,  the  "Programme  de  modernisation  routière"  in  Morocco  will  focus  on 
improvements across the national road network, identified by the World Economic Forum as 
the most important of the country’s infrastructure shortcomings. The Vlöre bypass project will 
reduce  congestion  on  the  roads  of  the  second  largest  port  city  in  Albania,  achieving  time 
savings  and  improving  safety.  Integration  of  road  safety  into  EIB  funded  road  projects  is  an 
action that the EIB is prioritising. 

Urban  rail  transport  helps  to  reduce  congestion  and  environmental  impact  in  cities,  while 
railways  in  general  tend  to  be  the  most  energy  efficient  and  least  polluting  land  transport 
mode. In south west Ukraine, the construction of a twin track tunnel will remove a significant 
impediment to a Trans-European Transport corridor, promoting trade. Acquisition of 73 train 
sets in São Paulo will alleviate the current overcrowding of the local metropolitan commuter 
railway services, benefitting over half a million passengers a year. 

Upgrading Montenegro's roads 

This project will improve transport conditions, including safety, through the rehabilitation and 
upgrading  of  six  sections  of  the  national  road  system  which  is  vital  for  international  transit 
traffic as well as to international and national tourist and goods traffic to the Adriatic Coast. 
It will also cover the construction of two city bypasses and a tunnel. These improvements are 
expected to result in 20million hours of time savings and EUR 18million in vehicle operating 
cost savings every year. It will improve safety, contribute positively to economic development 
in  the  country  and  improve  living  conditions  in  two  cities  (Niksic  and  Rozaje)  by  diverting 
transit traffic from inhabited areas. 

Having already been active in financing road rehabilitation in Montenegro, the EIB was able 
to assist in project preparation and is providing a long-term loan of EUR 30million towards a 
total project cost of EUR 65.7million. As part of the project, technical assistance will also be 
provided  in  relation  to  road  safety,  institutional  strengthening  and  project  implementation, 
with  the  EIB  specifically  supporting  the  tender  process.  During  construction,  2400 
person/years of employment will be created. 

• 

Expected results of new projects: Water and sanitation sectors 

Challenges  in  water  and  sanitation  sectors  include  defining  realistic  service  levels,  reducing 
water losses, the institutional strengthening of municipal and regional utilities, and improving 

15 

 
 
  
  
  
  
  
 
regulation.  Rapid  urbanisation,  changing  consumption  patterns  and  climate  change  impacts 
add further to the challenges in this sector. The achievement of the water and sanitation targets 
of  the  United  Nations  Millennium  Development  Goals  is  a  central  component  of  EU 
development policy outside the EU. 

The EIB signed contracts for 6 new projects in the water and sewerage sector in 2014. These 
projects  are  expected  to  improve  access  to  safe  drinking  water  for  3.3million  people,  and 
enhance sanitation services to more than 627 000 people across Bangladesh, Egypt, Mongolia, 
Armenia, and the Republic of Moldova. 

One of the new projects signed in 2014, the Dhaka Environmentally Sustainable Water Supply 
project in Bangladesh, is notable for the very large size of the population that will benefit from 
improved water supply. It is expected to improve the quality and resilience of the water supply 
for some one million households by substituting new sustainable surface water extraction for 
over-exploited groundwater resources. In addition, this project was counted as 15% adaptation 
to climate change because it addresses water supply demands, whilst making the system more 
resilient to extreme weather variations. Given the large proportion of the population in many 
countries that are still without adequate access to safe drinking water and adequate sanitation, 
projects in the water sector often bring important benefits to very large number of people. For 
instance,  the  North  Moldova  Water  project  is  expected  to  benefit  231000  people, 
approximately 8% of the country’s 2.9million population. 

The Kafr El Sheikh Wastewater Treatment project in Egypt involves the construction of two 
wastewater treatment plants, and the expansion of a further three, as well as the laying of 697 
km  of  sewers.  It  will  result  in  an  additional  48  400  000m3/year  of  waste  water  treated  to 
acceptable  standards.  It  will  reduce  the  discharge  of  untreated  sewage  into  the  environment, 
including the Mediterranean Sea, by 85 000 m3/day. 

Table 7: Water and sanitation – new projects overview 

# PROJECTS: 

TOTAL INVESTMENT COST: 

APPROVED EIB FINANCE: 

6 

EUR 1billion 

EUR 270million 

EXPECTED OUTPUTS 

EXPECTED OUTCOMES 

New or rehabilitated water treatment capacity 
(m3/day): 
New/upgraded water storage capacity (m3): 

New/upgraded water mains/pipes: 

New/upgraded domestic water connections: 

533 000  

9 800 

712 km 

175 300 

Population benefitting from improved 
water supply: 

3 306 000 

Average %-point reduction in non-
revenue water:2 

21.5 

New or rehabilitated wastewater treatment 

388 900 

Population benefitting from improved 

627 500 

2 Non-revenue water (%) is the percentage of water supplied that is not billed because of leakage or illegal connections 

16 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
 
capacity (person-equiv./day): 

sanitation services: 

New/upgraded sewer and storm pipes: 

728 km 

Reduction in untreated sewage 
discharged to environment (m3/day): 

New or rehabilitated domestic connections to 
sanitation services: 

21 800 

Additional wastewater treated to 
acceptable standards (m3/year): 

85 000  

48million  

• 

Expected results of new projects: Education and urban development 

Programmes to develop or renew urban areas, to improve quality of life and promote economic 
growth,  often  involve  the  planned  renovation  or  creation  of  new  higher-quality  housing, 
schools  and  hospitals.  New  projects  in  education  and  urban  development  will  allow  an 
additional 36 000 school students in Tunisia to be enrolled. 23 500 households in Morocco and 
Turkey will benefit from improved housing. 

Modernising Tunisia's schools 

This  EUR  213million  programme,  supported  by  an  EUR  70million  EIB  loan,  will  target  a 
quarter  of  all  secondary  schools  in  the  country,  as  well  as  some  primary  schools  and  other 
facilities. In total, it will build 59 new schools and renovate a further 310, creating 36 000 new 
places for students and allowing the number of teachers and support staff to rise by 3 350.As 
well  as  expanding  access  to  education,  the  programme  will  provide  better  facilities  for 
teachers  and  students,  enhance  safety,  allow  more  children  with  special  needs  to  attend 
normal schools and reduce maintenance costs. Particular attention will be paid to schools in 
disadvantaged areas. The ultimate goal of the programme is to ensure that young people leave 
school with better skills in order to help tackle the high youth unemployment in the country.  

The EIB is providing long-term finance – otherwise unavailable in the market – to match the 
economic life of school buildings. 

A  infrastructure  development  programme  is  often  dynamic  and  complex  and  will  require 
financing  through  intermediaries  such  as  public  municipalities,  which  then  channel  funds  to 
finance  a  large  number  of  smaller  projects.  Ex-ante  reporting  on  expected  results  of 
intermediated  loans  is  not  possible  in  all  cases,  and  particularly  in  case  the  intermediary  is 
implementing through a flexible programme of investments, when results can only be reported 
ex post (e.g. the Ukraine Early Recovery programme). 

Table 8: Education and urban development – new projects overview 

# PROJECTS: 

TOTAL INVESTMENT COST: 

APPROVED EIB FINANCE: 

6 

EUR 1.9billion 

EUR 820million 

EXPECTED OUTPUTS 

EXPECTED OUTCOMES 

17 

 
 
 
 
 
 
 
 
 
 
 
New schools constructed: 

Schools refurbished: 

Value of new school equipment: 

59 

310 

EUR 
29million 

Additional students enrolled: 

36 000 

New or refurbished housing units: 

23 500 

Households with improved housing: 

23 500 

Urban streets and associated 
infrastructure built or upgraded: 

29km 

Public employees in new buildings: 

9 000 

New/upgraded sewer and storm pipes: 

Area developed: 

70km 

219ha 

Residents benefitting from increased 
open space and parks: 

300 000 

Multi-sectoral urban development programmes will support the provision of new or improved 
housing and services for nearly 17 000 households in Morocco in a new town near the capital; 
will replace or improve 5 000 residential buildings to improve earthquake resilience in Turkey; 
and will renovate buildings used by 9 000 public employees in Quito, the capital of Ecuador, 
helping to improve the quality of public services.  

The Ukraine Early Recovery programme a EUR 200million framework loan will finance the 
repair  or  replacement  of  small-scale  infrastructure  damaged  during  the  conflict  in  Ukraine. 
This will cover utilities such as water and sanitation systems, electricity and district heating; 
damaged roads and railways; and the repair of administrative buildings, schools and hospitals. 
It will also assist municipalities affected by significant influxes of displaced persons due to the 
conflict. 

Impact of social and economic infrastructure projects on employment 

Infrastructure projects will lead to the creation of nearly 6 500 permanent jobs and around 170 
000  person-years  of  temporary  employment  during  construction.  The  biggest  direct 
contributions to employment will be water and sanitation projects, which will create more than 
55 000 person-years of temporary employment, and health, education and urban development 
projects that will create almost 4 000 permanent jobs. 

Sector  

Energy 

Transport 

Water and sanitation 

Education and urban development 

Total 

Table 9: Job creation - Infrastructure 

Permanent employment 

Employment during 
construction 

(full-time eqiv.) 

(person-years) 

1 132 

151 

157 

3 990 

6 457 

18 440 

39 340 

55 293 

51 305 

170 528 

18 

 
 
  
 
 
 
 
 
  
 
 
 
 
3.3.  Climate change mitigation and adaptation 

3.3.1. EIB's Climate action framework 

The  EIB  supports  the  EU’s  aim  of  promoting  low-carbon  and  climate-resilient  growth 
globally,  engaging  its  technical  expertise  and  financial  strength  to  promote  sustainable 
development  in  line  with  its  sustainability  framework.  It  thus  encourages  low-carbon  and 
climate resilient growth in the EIB mandate regions as well as in all other geographic areas of 
activity (not reported here).  

In November 2013, EIB issued the Statement on Climate Action presenting its objectives and 
approaches in support of EU leadership on climate issues and also acting as a guide for EIB 
activities  and  outlines  the  standards  that  the  EIB  requires  of  the  projects  that  it  finances  to 
promote sustainable development. Within this statement is the objective “to  integrate climate 
considerations  effectively  into  all  EIB  activities  and  practices,  including  those  related  to  the 
project cycle, the sector lending policies and the project-specific performance standards”. This 
objective is pursued through application a number of project standards and practices related to 
climate, whereby: 

  Climate  Action  lending  is  tracked  and  reported  based  on  objective  and  transparent 
criteria - climate action financing is measured in line with definitions agreed with all 
MDBs and published in the MDB Joint Report on Climate Finance.  

  The  promotion  of  risk  management  approaches  to  increase  the  resilience  of  assets, 

communities and ecosystems related to EIB projects. 

  The  measurement  of  the  carbon  footprint  of  the  projects  it  finances  according  to 

international practices.  

Furthermore, the EIB applies an appropriate economic price of carbon in its project- specific 
analyses wherever appropriate, in order to take account of the economic rather than financial 
cost of the GHG emissions, in order to inform EIB financing decisions. 

Review of EIB Climate Strategy  

In late 2014, EIB has launched a review of its approach to supporting climate action aimed at 
formulating strategic orientations and priorities for the future applicable for all regions – inside 
and  outside  the  EU.  A  public  consultation  on  this  review  took  place  from  January  to  March 
2015, with meetings and discussions with stakeholders such as Civil Society Organisations, the 
European  Commission,  the  EEAS  and  many  others.  The  review  process  is  taking  place  in 
parallel to the ongoing climate negotiations on a successor agreement to the Kyoto Protocol. 
Meanwhile  the  new  Climate  strategy  was  adopted  by  the  September  2015  EIB  Board, 
although,  while  appreciating  EIB's  leading  role  in  the  Climate  debate,  the  Commission  and 
shareholders voiced concerns on the level of ambition of the new Strategy. 

Furthermore, Decision  466/2014/EU requires  an update of  ELM Climate Strategy  which has 
been introduced following the mid-term review of the previous ELM in 2011, before the end 
of 2015.  

Biodiversity 

19 

 
 
Together with its MDB peers, the EIB has committed to track biodiversity-related financing in 
its  operations  and  publish  the  first  report  for  the  Convention  on  Biological  Diversity  (CDB) 
Conference  of  the  Parties  (COP)  in  October  2016.  In  consultation  with  its  peers  and  the 
OECD, the EIB is currently working to develop and apply a system for reporting and tracking 
biodiversity-related  lending.  The  methodology  being  developed  will  look  specifically  at 
lessons learned  and  in  particular  the  definition  on  climate  adaptation  financing  and  tracking. 
The Rio markers for biodiversity will be integrated into the performance methodology of EIB-
financed projects. EIB is also part of a working group lead by the OECD DAC ENVIRONET 
Task team looking at refining the biodiversity Rio marker definitions.  

Climate Risk Assessment  

During 2014, EIB has been trialling a second pilot version of a climate risk assessment tool, 
based on the  methodologies  published as  part of the EU’s Adaptation Strategy in 2013. It is 
planned to launch this climate impact assessment tool during 2015. During this trialling stage, 
EIB  undertook  extensive  work  to  support  climate  resilience  in  a  number  of  specific  projects 
and associated systems, and introduced a systematic screening for new projects. 

Carbon Footprint  

The  EIB  applies  its  Carbon  Footprint  Exercise  (CFE)  methodology  to  all  sectors,  not  only 
climate projects. It estimates greenhouse gas (GHG) emissions and reports for projects where 
emissions are expected to be significant, i.e. above defined thresholds, thus enabling to capture 
approximately 95% of emissions from EIB’s investment projects. 

In 2014, CFE was applied to 11 projects signed in the regions covered by the Mandate because 
they had estimated emissions above the Absolute or Relative emissions thresholds. These 11 
projects  represent  total  EIB  signatures  of  EUR  1.4  billion.  The  related  total  absolute  GHG 
emissions  are  estimated  as  2.08  Mt  CO2-eq/year,  with  an  overall  saving  from  the  same 
financing estimated at 0.70 Mt CO2-eq/year.  

Several  of  the  CFE  projects  signed  in  2014  involve  the  development  of  renewable  energy 
power generation and show significant savings in GHG emissions : 

  Megalim  Solar  thermal  plant  (121  MW  capacity  plant  in  Israel  –  38  kt  CO2-eq/year 

absolute  emissions and  129 kt CO2-eq/year savings) 

  Ka Xu CSP project (solar electricity generation in South Africa – 272 kt CO2-eq/year 

savings, 8 kt CO2-eq/year absolute emissions), 

  Renewable  Energy  HPP  Vranduk  (20  MW  new  hydro  plant  –  Bosnia  Herzegovina 

122kt CO2-eq/year savings, zero absolute emissions). 

Table 4: 2014 Carbon Footprint Exercise (CFE) Overview 

Prorated to 2014 financing: CO2-
eq/yr 

Number of projects 

Total  

Other Energy 

RE&EE 

Transport 

11 

3 

7 

1 

20 

 
 
 
Absolute emissions - Mt CO2-eq 

Relative emissions - Mt CO2-eq 

2.08 

-0.70 

0.04 

-0.24 

2.01 

-0.45 

0.03 

0 

The GHG figures are prorated to EIB actual financing in 2014, to avoid double counting of emissions, or emissions savings 
with other co-financiers.  

Some  energy  projects  can  create  emissions  increases,  if  they  are,  for  example,  addressing  a 
suppressed  demand  for  much  needed  power  for  development.  In  the  Tajik  –  Kyrgyz  Power 
Interconnection  project  signed  in  2014,  the  project  emissions  are  estimated  as  13  kt  with  an 
increase in emissions created of 84 kt CO2-eq/year, as the project brings much needed power 
to regions severely lacking in supply. 

Transport  projects  can  also  generate  decreases  or  increases  in  CO2  emissions,  with  savings 
coming  from  modal  shifts  where  the  projects  incentivise  more  climate-friendly  means  of 
transport (typically, from road-based to metro or railway). In the 2014 portfolio, for example, 
the Bosphorus  Tunnel  Tranche B rail project in Turkey is estimated to produce 30 kt  CO2-
eq/year savings (470 kt CO2-eq/year absolute emissions). 

3.3.2. EIB's Climate action in 2014 

As  regards  climate  action,  2014  overall  EIB  signatures  amounted  to  EUR  2.1  billion, 
representing  31%  of  total  EIB  financing  in  the  regions  covered  by  the  Decision  (32%  of 
signatures under the EU guarantee). This proportion is above the EIB’s global target of 25% of 
overall lending. 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. 

The EIB’s support to investment projects in this area has been growing in line with the general 
objectives both inside and outside the EU.  

Many of the world’s least carbon efficient economies are situated in Asia. Therefore, climate 
action lending remained strong in Asia with 68% of signatures contributing to climate action. 
It reached 54% in Latin America. In South Africa where climate-friendly energy projects have 
significant potential, 100% of the new financing volume signed in this country contributed to 
climate action. 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  (21%)  is  less 
there in the light of strong other lending priorities, notably private sector development. In the 
Eastern Neighbourhood, the proportion is limited to 12% of total signatures.  

21 

 
 
 
Chart 2: Contribution to climate change mitigation and adaptation, by sector – 

Total 2014 signatures (in EUR million) 

The energy sector accounted for the largest  part in  terms of  climate financing volume (EUR 
1.4 billion) with 5 projects, reflecting especially the strong demand for investments in energy 
efficiency and renewable energy. Other projects which contributed to the EIB’s climate action 
objective were in the sustainable transport (EUR 455million) and urban development (EUR 10 
million),  water  and  sewerage  (EUR  33  million),  industry  (EUR  76  million),  "natural 
resources"  (EUR  35  million).  An  additional  EUR  78  million  in  credit  lines  were  extended 
through financial intermediaries for on-lending to small and medium sized climate change and 
energy efficiency projects.  

Expected results of new projects: Energy sector. 

EIB  financing  projects  played  an  important  role  by  facilitating  a  shift  to  renewable  or  more 
efficient sources of energy. The 5 new projects will develop renewable sources of energy. The 
591MW  additional  capacity  provided  by  these  projects  will  provide  an  alternative  to  fossil 
fuel-based alternatives in countries where renewables are often only a small proportion of total 
generation capacity.  

Efficiency within the energy sector is often supported by the EIB through intermediated loans 
that  fund  smaller  scale  investments,  such  as  the  framework  loan  for  small  energy  projects 
provided to IREDA in India (see below). Small-scale energy efficiency operations include, for 
example,  investment  in  cogeneration  –  the  simultaneous  generation  of  electricity  and  useful 
heat – to serve for business and household needs. 

Investing in cleaner energy in India 

The  electricity  sector  in  India  suffers  from  chronic  energy  shortages  and  relies  heavily  on 
imports of fossil fuels to meet growing energy demand. India will need an estimated 100 GW 
of  additional  generation  capacity  over  2012-2017,  30%  of  which  should  come  from 
renewables,  according  to  government  targets.  To  help  meet  this  goal,  the  EIB  is  providing 

22 

 
 
 
 
EUR 200million to the Indian Renewable Energy Development Agency (IREDA) for small and 
medium-scale  renewable  energy  and  energy  efficiency  projects,  some  of  which  will  be 
implemented by small and medium-sized enterprises. 

Although it is not possible to quantify detailed outputs and outcomes before allocations to sub-
projects  are  submitted  and  approved,  the  framework  loan  is  expected  to  assist  India  in 
addressing  a  severe  power  supply  deficit,  contributing  to  sustainable  economic  growth  by 
reducing energy imports and carbon emissions. The operation supports the EU-India Strategic 
Partnership, which foresees cooperation in fighting climate change. 

The availability of long-term funding dedicated to climate change mitigation projects is scarce 
in the Indian market. EIB funding will enable IREDA to extend loans tenors provided to the 
final  beneficiaries  so  as  to  match  the  economic  life  of  projects  financed.    IREDA  will  also 
apply  the  EIB’s  eligibility  criteria  and  standards  with  regard  to  technical,  economic  and 
financial  viability,  environmental  and  social  issues  and  procurement,  with  all  allocations 
reviewed ex-ante by the EIB. 

Energy generation projects can also contribute to climate change mitigation by increasing the 
efficiency of production from conventional sources. The conversion of the natural gas-fired El 
Shabab  plant  in  Egypt  to  a  combined  cycle  operation  will  increase  electricity  generation, 
providing much needed extra electricity in the country. The absolute emissions for this power 
plant  after  the  conversion  are  estimated  at  4023kt  CO2-eq/yr;  however  the  power  plant  will 
generate electricity in a far more energy efficient manner after the conversion project, and use 
of  the  waste  heat,  with  an  efficiency  gain  of  1400GWh/year,  is  estimated  to  avoid  GHG 
emissions in the order of 502kt CO2-eq/yr, compared to the likely alternatives for this power 
generation.  Three  other  energy  projects  will  achieve  a  further  294GWh/year  to  bring  total 
energy savings that have been estimated for new projects to 1694GWh/year in total.  

  Expected results of new projects: Transport, industry and water sectors 

Promoting  the  shift  from  high  carbon,  and  often  more  polluting  forms  of  transport,  to  more 
sustainable  modes  also  makes  a  significant  contribution  to  climate  change  mitigation.  Two 
new projects in 2014 will promote a shift from private road transport to rail, with associated 
reductions  in  carbon  emissions.  In  Brazil,  the  acquisition  of  trains  for  use  on  metropolitan 
railway lines in São Paulo (see below) will reduce overcrowding and attract road users, while 
work on the Beskyd railway tunnel in Ukraine will enable the transport of freight containers. 
As a result, an estimate 300 000 tonnes of cargo per year will shift from road to railway. 

Encouraging more commuters on to rail in São Paolo 

The  São  Paulo  regional  rail  network  carries  more  than  2.5  million  passengers  every  day. 
During peak hours, trains are over-crowded, carrying eight passengers per square meter, far 
exceeding the European comfort standards of four passengers per square meter, and deterring 
more commuters from taking the train. 

This EUR 765million project, supported by a EUR 200million loan from the EIB, will finance 
73 eight-car “Electric Multiple Unit” trains to alleviate peak hours overcrowding and allow 
passenger number to rise to a planned 3.6 million passengers a day in 2015. By encouraging a 
modal shift from road transport (particularly buses) to rail, the project is expected to reduce 

23 

 
 
fuel consumption and pollution emissions, achieve operating and maintenance cost savings of 
EUR 11million a year, and to bring wider economic benefits for the metropolitan area of São 
Paulo.  As  well  as  providing  long-term  financing  to  match  the  economic  life  of  the  rolling 
stock, the EIB was also able to enhance the procurement standards used. 

Investment  in  innovative  low-carbon  technologies  also  has  the  potential  to  contribute  to 
climate  change  mitigation.  For  example,  the  EIB  is  funding  research  and  development  in 
Turkey into improving the fuel efficiency of passenger vehicles through Tofas in Turkey.  

Supporting R&D for cleaner, safer vehicles 

A  EUR  55million  loan  will  support  a  EUR  115million  R&D  project  to  improve  the 
environmental  performance  and  safety  characteristics  of  vehicles.  Tofas,  an  automotive 
manufacturer  based  in  Turkey  and  co-owned  by  the  Fiat  Chrysler  Group,  will  focus  on 
improved  fuel  efficiency  and  safety,  electric  vehicle  development,  fuel  storage  systems  and 
advanced manufacturing processes. 

EIB funds will help address financing constraints often encountered for R&D because of the 
high degree of uncertainty inherent this type of investment. An additional 75 engineers will be 
hired by Tofas, which also expects to be able to increase patents applications carry forward its 
collaboration agreements with 11 universities across Turkey and Europe. 

The  water  sector  is  also  important,  both  in  terms  of  energy  efficiency  and  in  terms  of 
adaptation and improved resilience to the effects of climate change. The adaptation impact of 
the  Dhaka  Environmentally  Sustainable  Water  Supply  project  is  particularly  notable  in  this 
regard. It will develop a new sustainable surface water resource based on water intake at the 
Meghna  river  that  will  reduce  extraction  from  over-exploited  groundwater  resources  and 
improve  resilience  of  the  city’s  water  supply  system  to  increasing  droughts  as  well  as  more 
extreme flooding events; both likely to be an increasingly frequent adverse impact of climate 
change. 

Challenges  in  the  water  sector  include  defining  realistic  service  levels  based  on  user 
preferences  and  ability  to  pay,  regulatory  reforms,  proper  phasing  of  investments,  the 
implementation  of  physical  water  loss  reductions  measures,  as  well  as  environmental 
considerations. 

  Expected results of new projects: Agriculture and sustainable land use.  

As  the  effects  of  climate  change  become  ever  more  apparent,  investments  that  support 
adaptation  to  climate  change  and  the  reduction  of  adverse  impacts  for  social  and  economic 
development  will  become  ever  more  important.  In  lower  income  countries,  the  poor  state  of 
existing infrastructure and the fragility of livelihood systems make investments in adaptation 
doubly  important.  This  is  an  issue  that  is  growing  in  importance  for  the  EIB,  and  that  will 
continue  to  do  so.  The  agriculture  sector  is  very  important  in  relation  to  climate  change 
adaptation because of its particular sensitivity to changing weather patterns. Four new projects 
signed  in  2014  are  focused  on  the  agricultural  sector  and  make  a  contribution  to  climate 
change adaptation. The Ziraat Bank credit lines will contribute to the sustainable adaptation of 
the  agricultural  sector  and  rural  areas  in  Turkey,  by  providing  significant  support  to 
environmental,  climate  action  and  resource  efficiency  investments.  In  the  Fruit  Garden  of 

24 

 
 
Moldova  project  (see  below),  the  EIB  will  work  with  both  public  and  private  promoters  to 
support the entire horticulture value chain. 

Revitalising the horticulture sector in Moldova 

The Fruit Garden of Moldova project will support the revitalisation of the horticulture sector, 
an important source of employment in the country. In line with the EU/Moldova Action Plan 
and  Partnership  Agreement,  the  objective  is  to  support  rural  employment  and  income 
generation through developing holistically the entire value chain: from improving the quality 
of fresh produce to the final dispatch of packaged and processed products. 

The  project  will  improve  the  resilience  of  the  horticulture  sector  to  climate  change  impacts 
and reduce the sector’s greenhouse gas emissions by:  

• 

• 

• 

establishing new fruit tree plantations on land exposed to erosion,  

funding drip irrigation systems for fruit orchards and table grape vineyards,  

reducing the use of fertilizers and other inputs,  

replacing  the  existing  old  equipment  with  energy  efficient  technologies  (e.g.  on-farm 
• 
cooling, transport, cold and controlled atmosphere storage and processing) and increasing the 
overall capacity along the value chain, thus reducing the waste, and  

providing  dedicated  training  (including  dissemination  of  knowledge  on  climate 

• 
adaptation measures) to the participants in the value chain. 

The EIB’s EUR 120million long-term loan will be accompanied by a EUR 6million NIF grant 
that  will  fund  partial  loan  guarantees  to  enable  local  banks  to  extend  loans  to  underserved 
agricultural SMEs. The project will finance long-term agricultural loans (mainly for orchard 
and table grape vineyard development), the leasing of plant and equipment, and investments in 
infrastructure such as testing laboratories and training facilities. Around 1 000 loans will be 
provided to SMEs through local intermediaries. Energy efficiency and resource efficiency are 
important climate mitigation elements in this project, and research into crops that will more 
suited to the future climate of Moldova is an important adaptation component. 

Two  directly  financed  projects  will  increase  resilience  to  increasing  climate  and  harvest 
volatility  in  Ukraine  by  expanding  grain  and  oilseed  storage  capacity.  These  loans  will  help 
improve the resource efficiency of the country’s agri-food sector and contribute to better food 
security  and  self-sufficiency.  The  Astarta  investment  highlights  how  additional  storage 
capacity  (714  000  tonnes  for  grain,  200  000  tonnes  for  oil  seed)  will  help  to  buffer  supply 
against  adverse  climate  events,  particularly  droughts.  The  incremental  storage  capacity 
represents 2% of the country’s cereal production and would secure yearly consumption needs 
of 5.8 million people. 

3.4. 

Regional integration among partner countries 

3.4.1. EIB's Regional integration framework 

Improving  links  amongst  partner  countries,  and  between  partner  countries  and  the  EU,  is  a 
cross-cutting  objective  of  the  EIB’s  action  outside  the  EU.  EIB  projects  can  contribute  to 
regional  integration  by  facilitating  the  physical  movement  of  goods  and  labour,  but  also  by 

25 

 
 
fostering  international  collaboration  in  the  private  sector,  and  supporting  the  convergence  of 
neighbouring countries’ economies towards the EU.  

In  that  context,  the  EIB  shall  undertake  financing  operations  in  beneficiary  countries  that 
support  foreign  direct  investments  (FDI)  from  EU  companies  which  promote  economic 
integration with the Union and technology and knowledge transfer. 

As  a  horizontal  priority,  EIB  support  for  regional  integration  often  is  realised  through  its 
lending  in  support  for  other  objectives  such  as  infrastructure  or  private  sector  support.  For 
example, the bank also promotes access to markets and development of value chains, including 
operations specially focused on the EU’s DCFTA policy framework. 

3.4.2. EIB's Regional integration action in 2014 

In 2014, the EIB signed a total of 23 financing contracts worth EUR 1.6 billion contributing to 
regional  integration.  19  new  projects  contributed  to  regional  integration,  for  which  contracts 
worth EUR 1.45 billion were signed in 2014. These projects include the funding of transport 
and energy infrastructure, investment in innovation, as well as credit lines and regional funds 
supporting local financial sector development. 

The majority of projects funded by the EIB in the transport sector do not only upgrade national 
infrastructure but also facilitate mobility across borders. For example, two road operations, in 
Bosnia and Herzegovina and Albania, will improve connectivity along pan-European corridors 
in Eastern Europe. The upgrade of the Beskyd tunnel in the Carpathian mountains in Ukraine 
will  enable  long  distance  freight  movements  in  particular  along  Trans-European  Corridor  V, 
linking Trieste, Italy to Lviv, Ukraine. 

Chart 5: Projects contributing to regional integration by sector (EUR million) 

Note: Projects may contribute to more than one sector. 

Regional  integration  can  be  key  in  enhancing  access  to  energy  in  countries  that  may  lack 
natural  energy  resources  and  may  also  open  up  opportunities  for  further  development  of 
renewable resources. At the same time, cross-country connections provide producers with the 
opportunity to export energy. Two new transmission lines between Kyrgyzstan and Tajikistan 
are part of a wider project to re-establish regional electricity trade, which broke down in 2009 
after  transmission  connections  to  Tajikistan  and  Uzbekistan  were  cut  and  dismantled.  This 

26 

 
 
 
project  highlights  one  of  the  key  issues  in  supporting  the  integration  of  energy  markets:  the 
importance of a conducive economic and political context. Energy projects also contribute to 
regional  integration  by  expanding  generation  capacity,  allowing  cross-border  energy  trade 
using existing connections to improve the cost, reliability and sustainability of energy supplies 
across a region.  

Supporting  eligible  projects  in  the  private  sector  can  also  contribute  to  regional  integration, 
where  the  implementation  of  the  project  involves  or  will  result  in  international  cooperation. 
This is often the case when the EIB co-funds investment in Research and Development (R&D) 
outside the EU.  Innovative  firms  tend  to  have  international  links, as  they  may  attract  skilled 
labour  from  abroad,  and  participate  –  sometimes  formally  –  in  international  R&D  networks. 
Both  of  the  two  R&D  projects  funded  by  the  EIB  outside  the  EU  in  2014  will  strengthen 
cooperation in innovation activities across Europe and the Mediterranean. The firms involved, 
operating  in  Turkey  in  the  consumer  electronics  and  automotive  sectors,  regularly  cooperate 
with firms and research institutions in the EU. 

Cross-border  financial  services  are  an  important  aspect  of  regional  integration,  helping  to 
spread  service  models  and  expertise,  and  achieving  synergies  and  economies  of  scale  across 
markets  that  are  often  small  and  financially  under-served.  This  is  why  many  private  equity 
funds  have  a  regional  rather  than  a  nation-level  focus.  A  regional  perspective  can  also  be 
important  for  identifying  and  capitalising  on  for  cross-border  investment  and  partnership 
opportunities. Six new credit lines will also support regional integration. All but one of these 
projects,  involving  EUR  670million  EIB  lending  in  total,  are  located  in  the  pre-accession 
region  where  they  will  support  convergence  with  the  EU  in  terms  of  local  private  sector 
development, enhancing opportunities for trade and business relationships with the EU. 

3.5.  EIB additionality 

The  EIB  is  not  expected  to  merely  duplicate  what  the  market  is  already  able  to  provide.  Its 
interventions provide more support than just standard loans. For example, EIB’s loans may be 
of longer tenor than is usual in the market, or may be combined with technical advice where 
project  promoters  lack  of  experience  or  institutional  capacity.  The  EIB  may  also  use  higher 
risk instruments. Furthermore, the EIB’s role goes beyond lending and includes the ability to 
attract  finance  from  other  development  institutions  or  private  players,  blending  loans  with 
grants and providing advisory services. 

The ReM framework measures this “additionality” (Pillar 3), 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.  The 
overall EIB additionality is rated on a scale of 1-Low, 2-Moderate, 3-Significant and 4-High, 
taking into account the three dimensions above. 

In  2014,  all  operations  were  expected  to  bring  advantage  to  borrowers  compared  to  market 
finance. None was rated low in terms of additionality; 14 % (9 operations) ranked moderate, 
more  than  70%  (46  operations)  ranked  significant,  and  14%  (9  operations)  featured  high 
expected additionality. The degree of additionality provided in each case reflects the needs of 
projects and promoters – it will be higher for complex projects in less developed regions, and 
less  pronounced  where  the  EIB  deals  with  highly  experienced  promoters  or  sophisticated 

27 

 
 
intermediary  banks.  Significant  or  high  additionality  is  provided  most  frequently  by  the 
characteristics of the “Financial Instruments” provided, followed by “Standards & Assurance” 
(raising  standards,  demonstration  effects  and  mobilising  resources).  Technical  and  sector 
contribution  takes  place  where  needed,  in  consideration  of  the  experience  and  capacity  of 
promoters and Government entities.  

Chart 6: Additionality "pillar 3"ratings – New operations 2014 

  Financial Instruments  

Tenor extension: All operations provide a tenor which exceeds the standard maturity available 
in  the  local  markets  and  matches  the  economic  life  of  the  assets  to  be  financed.  The  tenor 
provided by the EIB is often two to three times the standard tenor available in the local market, 
and sometimes up to 5 times greater. 

Table 14: Average tenor provided, by type of operation 

Type of operation 

Direct and framework loans for  infrastructure projects 

Credit lines for SMEs, mid-caps and micro-enterprises 

Direct and framework loans for industry projects 

Equity-type operations 

Years 

20.7 

11.7 

9.7 

10.2 

Blending loans and grants: The EIB manages grants from third parties alongside its loans. In 
the regions covered by the ELM these typically take the form of investment grants. This is a 
significant  source  of  additionality  particularly  in  the  Neighbourhood  regions.  These  grants 
often  originate  from  the  EC’s  regional  blending  mechanisms,  such  as  the  Neighbourhood 
Investment Facility, and typically are used to support projects that strongly promote EU policy 
orientations,  meeting  more  than  one  policy  objective.  For  example,  two  projects  benefiting 
from grants are the Ouarzazate solar plants in Morocco, which will contribute to infrastructure 
development and climate action, and the Fruit Garden of Moldova project, which contributes 
to private sector development, infrastructure and climate action.  

28 

 
 
 
 
Funding  in  local  currency:  A  number  of  the  EIB’s  credit  lines  for  private  enterprises  and 
microfinance  offer  loans  with  repayment  terms  denominated  in  local  currency.  This  is 
particularly  important  for  enterprises  whose  activities  are  focused  on  domestic  or  regional 
markets and cannot rely on hard currency income. Where allowable, local currency loans for 
infrastructure  projects can  be  also  be  beneficial  for  the  borrower  in  cases  where  the  revenue 
stream  of  a  project  is  based  on  tariffs  in  local  currency,  which  would  otherwise  come  under 
pressure if the financing were in foreign currency. 

In  Turkey,  the  EIB  uses  swap  products  which  are  available  in  the  market  and  contributes  to 
deepening  the  market  for  such  products.  In  the  Mediterranean  region,  the  EIB  has  access  to 
third party funds from the EU’s Neighbourhood instrument, which allow for higher risk taking 
(the  EIB  prices  anticipated  currency  losses,  but  possible  excess  losses  are  borne  by  these 
funds, and possible gains credited to them).  

Innovative features: EIB operations are considered innovative when the EIB can offer certain 
activities or products in a specific market context that other IFIs do not offer, or because the 
structure of the operation provides for a special partnership with project promoters. Innovative 
operations are most frequent in the ALA and MED regions.  

A primary example of innovation is demonstrated through the EIB’s collaboration with Réseau 
Entreprendre in Tunisia, a civil society organisation that promotes the establishment of micro-
enterprises  by  providing  interest-free  loans  combined  with  customised  coaching  for 
entrepreneurs during the early years of their businesses. As part of this collaboration, Réseau 
Entreprendre  will  select  such  enterprises  and  introduce  them  to  the  intermediary  Banque 
Tuniso-Koweitienne  (BTK)  for  possible  financing  at  a  preferential  rate  of  interest  under  the 
EIB  line  of  credit,  as  well  as  providing  continuous  support  to  the  selected  enterprises. 
Similarly,  EIB’s  support  and  innovative  approach  to  private  sector  development  in  Mexico 
through collaboration with commercial banks is described in Project Focus 8.    

Overcoming finance bottlenecks in Mexico 

Mexico’s 4.1 million SMEs account for more than half of the country’s GDP and for 80% of 
employment. Nonetheless, less than 35%  of these  firms have access to  a bank loan or credit 
line.  Bottlenecks  that  prevent  small  businesses  from  getting  essential  credit  include  high 
interest rates, short tenor periods, excess bureaucracy and strict guarantee requirements from 
banks.  

The EUR 150m Mexico Global Loan for SMEs and Mid-Caps will help address the issues of 
availability  and  maturity  of  funding  for  these  companies  by  providing  long-term  funding  to 
Banco  Santander  (Mexico)  SA.,  which  will  pass  on  this  funding  advantage  through  EUR 
300million lending to companies in the manufacturing, services, health and social services and 
tourism industries. The project will be beneficial to entrepreneurs with limited working capital 
and  will  give  them  the  opportunity  to  expand  their  businesses.  Further,  by  making 
entrepreneurs less dependent on informal sources of financing, the project will lead to a more 
level playing field for smaller businesses in the country. 

29 

 
 
  Raising standards and mobilising other sources of finance 

EIB  gives  support  to  raising  the  environmental  or  procurement  standards  for  the 
implementation  of  the  investment  projects  to  be  financed.  In  more  than  three  quarters  of  all 
operations,  this  additionality  dimension  is  rated  significant  or  high.  This  effect  of  EIB’s 
intervention is particularly strong in framework loans in the Pre-Accession region (e.g. TSKB 
Energy, Development Bank Energy) and ALA (e.g. Ireda, Chile CCFL), where intermediaries 
are  bound  to  adhere  to  the  EIB’s  strict  requirements,  notably  in  the  field  of  environmental 
impact assessment and mitigation.  

Mobilising resources: The EIB works with the project promoters and co-financiers in order to 
design the financing package or accelerate financial close. In 40% of the operations, the EIB’s 
role in structuring the financing package is rated significant or high. In 36% of the operations, 
the EIB dedicates significant or high efforts towards 

working with co-financiers in order to reach financial close. This has an impact on mobilising 
finance  from  other  institutions.  In  particular,  private  financiers  participate  in  about  60  %  of 
operations, providing significant amounts of finance (typically between 50% and 100% of the 
EIB financial contribution).  

Demonstration  effect:  In  certain  regions,  primarily  MED  and  ALA,  the  EIB’s  intervention 
has a significant demonstration effect. Notably, the demonstration effect in the Mediterranean 
region  is  rated  significant  or  high  in  94%  of  the  operations.  The  EIB  provides  assurance  to 
other  financiers  about  the  quality  of  projects  which  are  assessed  by  the  EIB  and  thereby 
encourages the participation of other institutions in the financing of these projects, or similar 
projects in future.  

This  is  often  the  case  for  operations  which  promote  environment  protection  where  EIB  may 
contribute  significantly  its  expertise  during  the  assessment  phase  or  in  operations  where  the 
EIB takes a leading role in the financial structuring and coordination of other financiers. It can 
also arise in credit line operations where the EIB works with smaller, second tier or specialised 
banks or in partnership with sector-specific public institutions.  

Complex  infrastructure  projects  such  as  the  Bosphorus  Tunnel,  or  large  urban  infrastructure 
projects  in  the  water  sector,  such  as  the  Ulaanbaatar  Water  Supply  project  (see  below)  is 
another area where the demonstration effect is observed. Overall the EIB has a demonstration 
effect which is rated significant or high in more than three quarters of all operations. 

Ulaanbaatar Wastewater System, Mongolia 

In Mongolia’s capital city, Ulaanbaatar, approximately 800 000 people live in growing peri-
urban  “Ger”  areas.  These  expanding,  unplanned  settlements  of  low  and  medium  income 
households are characterised by unserviced plots, unpaved roads, and limited infrastructure. 
A  large  majority  of  the  population  in  the  “Ger”  areas  can  access  water  through  kiosks 
operated  daily  between  10  AM  and  8  PM.  The  lack  of  wastewater  collection  infrastructure 
means  that  large  amounts  of  pollutants  are  being  released  into  the  ground,  seriously 
threatening the quality of groundwater, the city’s main source of water supply. 

In  parallel  co-financing  with  the  Asian  Development  Bank,  the  EIB  is  providing  a  EUR 
50million  long-term  loan  for  a  multi-sector  urban  development  investment  project  aimed  at 

30 

 
 
improving the living conditions in these informal settlements. It will extend water distribution 
and wastewater collection infrastructure, including 20 000 new domestic connections, to up to 
400  000  inhabitants  of  the  Ger  areas.  This  is  expected  to  reduce  water-borne  diseases  by  a 
third. 

  Technical and Sector contribution 

The  technical  contribution  that  the  EIB  makes  to  projects  includes  involvement  in  project 
preparation  such  as  the  review  of  feasibility  studies  or  environmental  and  social  impact 
assessments;  support  to  project  implementation,  such  as  technical  assistance  to  a  Project 
Implementation  Unit;  and broader  sectoral support such as strengthening the capacity of key 
institutions. Under ReM framework, each of these components is rated and an overall technical 
contribution  rating  is  calculated.  The  EIB  also  contributes  technically  to  financial  sector 
projects,  for  instance  through  representation  in  funds’  supervisory  boards,  thus  effectively 
contributing to the strategic guidance of the corresponding operations. 

In total the technical and sector contribution to operations was rated high or significant in 22 
cases, around one third of operations. Projects in the Mediterranean (9) and Pre-Accession (10) 
countries most often benefitted from a significant technical contribution. 

Technical assistance in action  

Pollution  Abatement  Programme  III,  Egypt  –  EIB-managed  technical  assistance  funds  from 
the NIF, in association to a direct investment grant, to a line of credit financing both public 
and private industrial companies investing in pollution reduction technologies. 

Renewable energy, Bosnia and Herzegovina – WBIF funded support for project preparation of 
a 20MW hydro plant. 

The  EIB  also  often  helps  mobilise  grant  financing  for  technical  assistance,  particularly  from 
the  EU  budget.  In  financial  sector  projects,  a  typical  form  of  technical  assistance  targets 
financial  intermediaries  which  receive  assistance  in  terms  of  applying  eligibility  criteria, 
product design and raising compliance standards. Projects in the energy (7) transport (7), and 
water (6) sectors were the most frequent beneficiaries of technical assistance in 2014. 

4. 

ACTUAL  AND  EXPECTED  RESULTS  OF  EIB  OPERATIONS:  RESULTS  MEASUREMENT 
FRAMEWORK (REM) 

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, results indicators 
are  identified,  with  baselines  and  targets  that  capture  expected  economic,  social,  and 
environmental outcomes of the operation. Performance against these benchmarks is monitored 
throughout  the  project  life  and  reported  at  two  major  milestones:  For  direct  investments, 
results are reported at project completion and again 3 years after completion. For intermediated 
operations results are reported at the end of the allocation period (credit lines) or at the end of 
the investment period (funds). Equity fund results are reported again at the end of life of the 
fund.  

31 

 
 
To the extent possible, ReM indicators have been harmonised with those of other IFIs, EDFIs 
and  EU  development  agencies  to  simplify  client  reporting  requirements  for  co-financed 
operations.  We  continue  to  be  actively  engaged  in  working  with  these  partners  to  further 
improve  coordination  and  harmonisation  of  results  indicators.  Pillar  ratings  are  based  on  a 
four-point  scale  (4-excellent,  3-good,  2-acceptable,  1-marginal)3  .  At  project  appraisal  stage, 
clear,  sector-specific,  standardised  and  measurable  indicators  are  identified  and  projects  are 
rated according to three ‘pillars’. 

Chart 7: ReM Framework 

EIB  provides  long-term  funding  to  investment  projects  that  are  often  financed  in  more  than 
one  tranche,  with  more  than  one  financing  contract.  Therefore,  part  of  the  volume  signed  in 
2014 relates to projects that had their first contract signature in previous years. Accordingly, 
the expected results for those projects have been already described in previous years’ reports. 
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. Where appropriate, these sections will refer to the total approved 
lending for these “new projects”, as well as to the volume actually signed in 2014. For the sake 
of  transparency,  a  breakdown  of  2014  lending  volumes,  including  the  signing  of  operations 
originally reported before 2014, is given in the following table. 

Table 15: 2014 lending volumes 

EUR million 

Total volume signed (72 projects) 
Contracts signed for new operations (64) 
Contracts signed for  operations reported previously (8) 

Primary Objectives 

Infrastructure 

Total 

4.093 
3.706 
388 

6.820 
6.179 
641 

Private 
sector 
2.727 
2.473 
254 

Transversal  
Objectives 

Climate 
Action 
2.112 
1.812 
300 

Regional 
integration 
1.592 
1.451 
141 

3 Pillar 3 ratings for additionality are slightly different: 4-high, 3-significant, 2-moderate, 1-low.   

32 

 
 
 
 
 
 
 
 
 
 
                                                            
In terms of strength of contribution to objectives (ReM Pillar 1), more than 40% of the 2014 
new signatures were rated as “excellent”, meaning that they were not only eligible but seen as 
a  high  priority  for  both  the  local  development  objectives  and  for  those  of  the  EU  policy 
covering the country or region concerned. The remainder of the operations rated “good” under 
Pillar 1. The chart 5 below provides a distribution of ratings by pillar. 

Chart 8: ReM ratings by pillar for new operations signed in 2014 

ReM Indicator 

P1&2: Marginal 
P3: Low 

P1&2: Acceptable 
P3: Moderate 

P1&2: Good 
P3: Significant 

P1&2: Excellent 
P3: High 

Pillar 1 

Pillar 2 

Pillar 3 

6 

9 

36 

49 

46 

28 

9 

9 

As  the  distribution  of  Pillar  1  ratings  shows,  28%  of  the  operations  signed  in  2014  are 
expected to make  an  excellent  contribution to  mandate  objectives, meaning that they are not 
only fully in line with the EIB mandate objectives, but they also are expected to make a high 
contribution  to  both  the  countries'  own  development  objectives  and  the  EU  priorities  for  the 
country and/or region. Those projects that will make a "good" contribution (36%) are in line 
with  mandate  objectives  and  should  make  a  high  contribution  to  either  the  country's  own 
development objectives or those of the EU and a moderate contribution to the other. 

Pillar  2  measures  the  expected  results,  the  quality,  and  the  soundness  of  projects.  9%  of 
operations  signed  received  an  excellent  rating.  This  includes  direct  operations  with  an 
economic  rate  of  return  (ERR)  greater  than  15%,  or  intermediated  operations  (credit  lines) 
which  would  make  an  exceptional  contribution  to  increasing  access  to  finance  as  well  as 
developing  the  financial  sector,  in  a  relatively low  risk  environment.  49%    of  operations are 

33 

 
 
 
 
 
 
 
  
  
  
  
 
 
expected to be "good". These would be direct operations with an average ERR of 10% to 15%, 
or  intermediated  operations  which  contribute  strongly  to  increasing  access  to  finance  and 
financial  sector  development  yet  in  a  high  risk  environment  with  less  likelihood  of  results. 
Only  6%  of  projects,  mainly  intermediated  loans,  were  rated  with  lower  expectations,  as 
"acceptable". 

Chart 9: Pillar 2 Rating by Main Sector - new operations 2014 

Pillar 3 measures the EIB's expected additionality. About 9% of operations signed in 2014 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  46%  are  considered  to  have  good  expectations,  providing 
significant  additionality  -  typically,  combining  significant  financial  additionality  with 
significant  technical  and  sector  contribution  or  standards  and  assurance.  The  9%  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. 

5. 

COOPERATION WITH THE COMMISSION  

The  Mandate  requests  that  the  Commission,  the  EEAS  and  the  EIB  cooperate  and  that  EIB 
strengthens  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 EU policies, EU strategies 
and project pipelines. 

34 

 
 
 
 
 
 
The Mandate reinforces the alignment and complementarity between EIB operations and EU 
policy  objectives.  The  general  objectives  of 
the  previous  Mandate  were  retained, 
complemented by the updated version of the Regional Technical Operational Guidelines (the 
"Guidelines")  which  provides  guidance  for  aligning  the  scope  of  the  EIB’s  interventions  in 
different  regions  with  EU  policies,  programmes  and  instruments.  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.  

In order to reflect and operationalise 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 December 2014, joint efforts by EC and EIB succeeded in securing a good outcome in far-
reaching reform of the ODA concessionality definition, ending long and difficult discussions 
in the DAC, validating the EU position on inventive mechanisms and consolidating the non-
discrimination of EIB loans.  

A principal highlight of the EIB’s operational plan in the Eastern Neighbourhood is the EIB’s 
2014  commitment  to  lend  EUR  3billion  to  Ukraine  during  2014-2016  in  the  context  of  the 
EU’s  initiative  to  provide  support  to  Ukraine.  Furthermore,  following  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. These  countries were  the major  beneficiaries of the EIB’s  lending last year, fully in 
line with the “more for more” principle that predicates the European Neighbourhood Policy. 

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  Policy  .  Under  strict  deadlines  and  conditions  and  in 
line with peer institutions, the addendum to 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. 

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 on in the technical group on climate change financing. 

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. 

35 

 
 
 
LIST  OF  EC-EIB  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).  

The  WBIF  Steering  Committee  allocated  grants  provided  by  the  participating  blending 
partners (the EU budget, the IFIs and 18 bilateral contributors) for a total amount of EUR 342 
million  in  support  of  175  operations  during  the  period  2008-2013.  These  operations  are  co-
financed with loans for a total of EUR 8.7 billion, of which EUR 3.8 billion are signed. EIB 
has provided 74% of the signed loans. Considering that the WBIF blends grants from different 
sources, by including the IPA budgetary funds managed by the EU delegations, the EU grants 
directly  linked  to  EIB-led  or  co-led  WBIF  projects  amounted  to  EUR  226  million  over  the 
period 2008-2014, of which approximately EUR 160 million from the WBIF resources and the 
rest form the budget managed by the EU delegations. The WBIF grants benefitted projects as 
follows: regional projects (45% of the grants), Bosnia and Herzegovina (18%), Albania (13%), 
Serbia (11%), FYROM (7%), Montenegro (5%), and Croatia (3%). 

The EIB remains among the largest financiers in terms of volumes lent for NIF projects: it has 
co-financed more than half of the projects (66 out of 115) approved by the NIF Board since the 
inception  of  the  Facility  with  total  EIB  financing  of  EUR  5.94  billion  of  which  EUR  2.08 
billion for projects where the EIB was the Lead Financier. Last year grants for projects with 
EIB in the Lead were distributed as follows: regional projects (19%), projects in Egypt (21% 
each),  Morocco  (25%),  Tunisia  (13%),  and  Moldova  (22%  ).  In  the  first  year  of  the  new 
financing period EIB was not in the position to approve any projects yet in Georgia, Armenia, 
Lebanon and Jordan – which is expected to change in the near future.  

The  IFCA  Operational  Board  approved  grants  for  a  total  amount  of  EUR  105  million  in 
support  of  19  operations  during  the  period  2010-2014.  Two  grants  totaling  EUR  4.3  million 
were  blended  with  EIB-led  financed  projects,  representing  4%  of  the  total  IFCA  approved 
amounts. These grants are allocated to EIB operations in Kazakhstan in support of the Energy 
and Private sectors, with EIB's associated loans amounting to EUR 162 million. 

The  LAIF  Operational  Board  approved  grants  for  a  total  amount  of  EUR  190.1  million  in 
support  of  25  operations  in  2010-2014.  As  lead  institution,  EIB  financed  3  projects  blended 
with  LAIF  grants  for  an  amount  of  EUR  25  million,  representing  13%  of  the  total  grants. 
These  grants  were  provided  in  support  of  operations  located  in  Nicaragua,  Bolivia,  and 
Paraguay, with EIB's associated loans totaling EUR 166.1 million. 

The  AIF  Operational  Board  approved  grants  for  a  total  amount  of  EUR  68  million  in  2012-
2014. To date, two EIB loans amounting to EUR 100 million were blended with TA grants in 
support of an energy project in Bangladesh, and an urban transport project in Lao PDR. AIF 
support to these EIB-led projects totaled EUR 10.7 million, representing 16% of the total AIF 
approved amount. 

36 

 
 
Pre-Accession Countries 

Energy  Efficiency  Finance  Facilities  (EEFF)  were  launched  in  2006  and  2007  to  tackle  the 
Climate  Change  issue.  The  purpose  of  these  facilities  is  to  support  energy  efficiency  and 
renewable energy investments carried out by beneficiaries of any type in the building and in 
the industry sectors. The EEFF combines EIB lending with incentives to the final beneficiaries 
to  reduce  the  cost  of  the  investment,  fees  to  the  benefit  of  local  financial  intermediaries  to 
encourage them to lend for the purpose of energy efficiency financing, and technical assistance 
paid from the Facility. As at the end of 2014, the total grant contribution made available by the 
EU  amounted  to  EUR  19.5  million  and  the  EIB  lending  commitment  was  at  least  EUR  78 
million.  

Since  2001,  the  Commission  and  the  EIB  have  been  co-operating  under  the  SME  Finance 
Facility (SMEFF), combining grant support with the EIB lending to help developing the SME 
lending capacities of financial intermediaries in the eligible countries. As at the end of 2014, 
the total grant available for the SME FF under the PHARE programme was EUR 46 million, 
and the EIB had committed to provide debt financing of at least EUR 460 million. 

In  July  2011,  an  Energy  Efficiency  window  was  introduced  under  the  SME  FF  programme, 
aiming at supporting energy efficiency and small scale renewable energy investments carried 
out by SMEs. As at the end of 2014, total grants available under this EE window amounted to 
EUR 25 million and the EIB lending commitment was at least EUR 125 million.  

Since  2002,  the  Commission  and  the  EIB  have  been  co-operating  under  the  Municipal 
Infrastructure  Facility  (MIF)  and  the  Municipal  Finance  Facility  (MFF),  combining  grant 
support  with  the  EIB  lending  to  encourage  local  financial  intermediaries  to  extend  loans  to 
municipalities  carrying  out  small  infrastructure  investments.  As  at  the  end  of  2014,  the  total 
grant available for the MIF and the MFF under the PHARE Programme was respectively EUR 
40 million and EUR 55.8 million and the EIB had committed to provide debt financing of at 
least EUR 200 million and EUR 279 million. 

Mediterranean countries 

The EIB manages in the context of FEMIP and on behalf of the EU, a budgetary envelope of 
EUR 32 million per year under the inter-regional ENPI programme for risk capital investments 
and technical assistance. In 2013, six risk capital operations were signed for a total amount of 
EUR 28.8 million while an additional EUR 9.2 million were signed for six technical assistance 
operations. 

The  FEMIP  Trust  Fund  (FTF)  complements  EIB-FEMIP  activities  by  financing  project 
preparation  and  implementation,  capacity  building  and  risk  capital  in  the  Mediterranean 
region. As of end 2014, total paid-in contributions by 16 Member States and the Commission 
amount  EUR  46.7  million,  of  which  EUR  2  million  were  paid-in  in  2014.  In  addition,  the 
United  Kingdom  Department  for  International  Development  (DFID)  pledged  a  significant 
contribution of GBP 15 million to the FTF in support of Climate Action in the Middle East and 
North  Africa  (CAMENA)  to  build  capacity  and  prepare  new  climate  investments  in  the 
Mediterranean  region.  The  FTF  also  channels  grants  from  third  parties  -  notably  from  the 
Deauville Partnership MENA Transition Fund - towards EIB-led regional projects.  As of end 
2014, over USD 25.21 million were thus channelled from the MENA Transition  Fund to the 

37 

 
 
EIB via the FTF for four EIB-led technical assistance in the FEMIP region. Following the start 
of  operations  in  2005,  the  FTF  has  approved  60  operations with  an  aggregate  value  of  EUR 
37.2 million, of which EUR 5.76 million was approved in 2014. 

Global 

The Global Energy Efficiency and Renewable Energy Fund (GEEREF) is an innovative fund 
of  funds  funded  by  the  Commission,  Germany  and  Norway  and  global private investors  and 
advised by the EIB and EIF, to provide clean energy to emerging countries and economies in 
transition. At end of 2014, GEEREF commitments represented EUR 86 million, on a portfolio 
of 7 funds. 

Table 16: Annual signatures on EU budget resources under EIB management in the regions over the period 2007-2014 

REGIONAL BLENDING MECHANISMS (TA, GRANTS APPROVED) 

2007 

2008 

2009 

2010 

2011 

2012 

2013 

2014 

Total 2007 - 
2014 

WESTERN BALKANS INVESTMENT 
FRAMEWORK (WBIF)* 
NEIGHBOURHOOD INVESTMENT FACILITY 
(NIF) 
INVESTMENT FACILITY FOR CENTRAL ASIA 
(IFCA) 

        -    

52.50 

50.25 

8.40 

49.36 

20.72 

47.35  

10.18 

238.76 

        -    

9.80 

4.00 

27.20 

50.00 

80.50 

52.00 

132.7 

356.20 

        -    

        -    

        -    

2.50 

        -    

        -    

1.80 

        -    

LATIN AMERICA INVESTMENT FACILITY (LAIF) 

        -    

        -    

        -    

7.00 

        -    

        -    

18.00 

        -    

ASIA INVESTMENT FACILITY (AIF) 

        -    

        -    

        -    

        -    

        -    

        -    

5.70 

5.00 

4.30 

25.00 

10.70 

OTHER TA AND GRANTS COMPLEMENTING EIB PROJECTS 

STRUCTURAL FUNDS TO EIB PROJECTS - 
WESTERN BALKANS * 
IPA CONTRIBUTIONS TO EIB SME 
OPERATIONS - TURKEY ** 
IPA CONTRIBUTIONS TO EIB FINANCED 
TRANSPORT - TURKEY ** 

        -    

        -    

        -    

        -    

75.00 

51.00 

 119.35  

        -    

245.35 

        -    

        -    

        -    

62.00 

18.00 

        -    

        -    

        -    

80.00 

        -    

        -    

        -    

        -     308.00 

        -    

        -    

        -    

308.00 

MUNICIPAL FINANCE FACILITY (MFF)  

        -    

7.50 

        -    

1.20 

1.00 

12.70 

1.20 

        -    

SME FINANCE FACILITY (SME FF) *** 

        -    

1.00 

3.50 

-1.00 

        -    

1.50 

        -    

0.60 

ENERGY EFFICIENCY FINANCE FACILITY 
(EEFF) 

        -    

        -    

        -    

3.90 

15.60 

        -    

        -    

        -    

TURKEY/FEMIP SUPPORT FUND 

        -    

        -    

1.06 

        -    

        -    

        -    

        -    

        -    

FEMIP SUPPORT FUND (EXCL. TURKEY) 

17.50 

16.90 

12.20 

10.10 

0.81 

1.21 

1.38 

SUPPORT TO FEMIP ENVELOPE (2007-2013) 

        -    

        -    

        -    

4.09 

10.52 

1.03 

11.63 

FEMIP TRUST FUND* (TA SIGNED) 

0.46 

1.96 

3.40 

1.88 

1.17 

6.31 

0.59 

0.27 

8.92 

1.07 

23.60 

5.60 

19.50 

1.06 

60.37 

36.19 

16.84 

RISK CAPITAL SIGNATURES 

MEDA / ENPI RISK CAPITAL 

46.45 

62.00 

25.00 

21.50 

10.00 

19.00 

28.76 

14.50 

227.21 

FEMIP TRUST FUND* 

2.00 

5.80 

5.00 

6.90 

1.20 

5.00 

        -    

1.00 

GLOBAL ENERGY EFFICIENCY AND 
RENEWABLE ENERGY FUND* 

        -    

        -    

22.24 

   10.00  

12.52 

20.23 

     9.00  

        -    

26.90 

73.98 

TOTAL 

66.41 

157.46 

126.65 

165.67 

553.18 

219.19 

296.75 

174.24 

1,759.55 

38 

 
 
 
  
  
NB: figures reported from the MFF, SME FF and EE FF are including Croatia for the period 2007-2012, for a total EUR 19.20million. De-commitment of 
0.50million in 2014. 

* includes other sources of funding than EU budget 

** amount reported on the year of signature of the EIB project 

*** negative value corresponds to de-commitment 

6. 

CO-OPERATION 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. 

The table below shows the evolution of the number of complaints handled by the EIB-CM in 
the  past  5  years.  The  nature  of  the  complaints  refers  to  allegations  related  to  the  projects 
financed  by  the  EIB  in  the  areas  of  Environment  and  Social,  Procurement  as  well  as 
Governance  (legal  and  financial  structure  of  the  project,  EIB’s  general  due  diligence  of  the 
project, implementation of EIB policies by borrowers, etc.). 

Table 17: Project related complaints lodged with the internal part (EIB-CM) of the EIB Complaints Mechanism 
over 2009-2014 

EU Member States 

Non-EU, of which 

in External Mandate Countries 

in ACP, OCTs 

Total 

2010 

2011 

2012 

2013 

2014 

5 years 

14 

16 

12 

4 

30 

9 

16 

13 

3 

25 

15 

17 

15 

2 

32 

13 

18 

16 

2 

31 

13 

16 

13 

3 

29 

64 

83 

69 

14 

147 

The number of annual new project-related complaints has remained relatively stable since 
2010.  New  cases  in  the  External  Mandate  regions  are  located  in  Albania,  Bosnia  and 
Herzegovina,  Egypt,  Georgia,  Moldova,  Morocco,  Serbia,  and  Tunisia.  Of  the  13  cases 
opened  concerning  the  External  Lending  Mandate,  5  are  related  to  Environmental  and 
Social impacts, 7 to Procurement, and 1 to Governance.  

39 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The outcome of the complaints handling process varied from "allegations not grounded" to 
"areas  for  improvement  recommended".  During  2014,  the  EIB-CM  closed  the  case 
concerning  the  upgrade  of  the  Electricity  Network  Upgrading  in  West-Bank,  Palestine4. 
This  complaint  concerned  potential  health  and  environmental  impacts  resulting  from  the 
construction of a 161kV substation in Nablus. The EIB-CM undertook an inquiry and made 
an on-site mission.  The  EIB-CM provided the stakeholders with  a special  report prepared 
by the Technical Assistance team of the project; as no further questions and/or allegations 
were raised by the complainants, the case was settled and closed. 

The  EIB-CM  also  processed  and  closed  several  procurement  complaints  in  different 
projects targeting the development of the water sector in Bosnia Herzegovina. Whilst most 
of  the  allegations  against  the  EIB  were  not  grounded,  in  one  of  the  cases  –  Emergency 
Floods  Relief  –  the  EIB-CM  recommended  the  EIB  not  to  finance  the  procurement  lot 
subject  of  the  complaint  due  to  issues  that  arose  during  the  evaluation  of  bids  by  the 
promoter. The case opened by the EIB-CM concerning the Cairo Metro Line in Egypt was 
closed  in  the  first  quarter  of  2014  as  the  complainants  did  not  accept  the  EIB-CM 
recommendation of facilitating the dialogue with the promoter to solve their concerns. The 
EIB-CM is however following the recommendation made in the initial assessment phase to 
support the promoter to establish its own grievance mechanism. 

Project  related  complaints  escalated  to  external  part  (EO)  of  the  EIB  Complaints 
Mechanism in 2014 

In 2014, the EO processed 4 complaints concerning allegations on possible maladministration 
of  the  EIB.  2  of  those  complaints  concerned  projects  being  implemented  in  ELM  countries, 
Egypt and Bosnia and Herzegovina.  
The Egypt case reviewed by the European Ombudsman in ELM countries refers to the Cairo 
Metro Line in  Egypt. The EO reviewed under her “Own Initiative” the complaints raised  by 
Egyptian residents of the Zamalek District of Cairo. The complainants alleged that the EIB's 
failed to reply to an e-mail of 8 February 2014, which raised issues with  regard to the EIB's 
funding of the construction of metro line 3 in Cairo. On 20 November 2014 the EO closed the 
case with no maladministration found. 
The case in Bosnia and Herzegovina concerns the development of the Corridor V c) project. 
The complainant, a private construction company, alleged that the EIB had failed to review its 
non-objection  in  a  tendering  case  that  had  already  been  handled  by  the  EIB-CM.  In  her 
decision of 23 October 2014, the EO concluded that "The EIB's decision to maintain its non-
objection to the exclusion of the complainant's tender was based on a legally incorrect reading 
of the tender documents. This was an instance of maladministration. Whilst the EIB considers 
that there was no error in its interpretation of the tender documents in this case, it will continue 
to cooperate with the Ombudsman and develop appropriate responses to all the relevant parts 
of the decision. 

4  This  designation  shall  not  be  construed  as  recognition  of  a  State  ofPalestine  and  is  without  prejudice  to  the 

individual positions of the Member States on this issue. 

40 

 
 
 
                                                            
7. 

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. A 
large  portion  of  the  dialogue  between  IFIs  takes  place  within  specialised  working  groups 
meeting  periodically  to  share  best  practices  or  to  address  specific  issues.  Ad-hoc  working 
groups are established to address specific issues, for instance the G-20 and G-8 often call on 
the World bank and MDBs for input. The EIB participates in other dialogue initiatives such as 
the  Heads  of  MDBs  meeting  (January  2014)  which  was  organised  by  the  EIB.  The  EIB  has 
been  working  with  other  MDBs  on  the  post  2015  Development  Agenda  and  particularly  on 
developing a common approach to roles with respect to Financing for Development. In 2014, 
EIB also attended the G20 Infrastrcuture and Investment Working Group meetings. 

The  EIB  Roadmap  for  the  Mediterranean  endorsed  by  the  Ministers  at  the  13th  FEMIP 
Ministerial Meeting held in Athens on 1 April 2014 acts as a guide for EIB cooperation in the 
Southern  neighbourhood.  The  roadmap  foresees  further  contribution  to  the  development  of 
blending  mechanisms  and  will  continue  to  explore  synergies  with  other  IFIs,  including  the 
Islamic  Development  Bank,  with  which  an  operational  agreement  was  signed  in  2012.  In 
addition  to  the  establishment  of  the  new  Neighbourhood  risk  capital  facility  in  cooperation 
with  the  EC/NIF,  another  2014  highlight  was  the  announcement  of  the  CAMENA  Climate 
Action envelope under the FEMIP Trust Fund with GBP 15million 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  (UfM)  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.  In  2015, 
the  EIB  will  be  chairing  the  Deauville  Partnership  international  financial  institutions’ 
cooperation  platform,  through  which  the  EIB  expects  to  be  focusing  on  employment  and 
support for SMEs. 

Job creation is a key factor of economic success and it has long been one of the criteria in the 
EIB’s assessment of its investment projects. The EIB therefore 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 
infrastructure 
Employment-Intensive  Investment.  Based  on  analysis  of  selected  EIB 
investments particularly in Egypt, Jordan, Morocco and Tunisia, the report will be published 
during 2015. 

Under the Mandate, approximately 20% of operations signed in 2014 were associated with a 
blending  component  from  the  EU  budget  –  See  Annex  IV  for  details.  In  addition,  EU 
budgetary  grant  resources  from  the  Asian  Investment  Facility  (AIF)  were  also  mobilised  in 
2014 with respect to approved EIB-led operation (see Annexes II and III). 

Created  in  2008,  the  Neighbourhood  Investment  Facility  (NIF)  is  one  of  the  EU’s  regional 
blending  facilities,  which  provides  catalytic  resources  in  support  of  Europe’s  Southern  and 
Eastern neighbouring countries, especially in the transport, energy, environmental, social and 

41 

 
 
private sectors. In addition to two operations co-financed with the AFD or 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.  

The Neighbourhood Countries are also the geographical area where the EIB works the most in 
cooperation with other IFIs. Main partner IFIs are the EBRD, the World Bank, and KfW. Co-
financing is typically associated with operations related to the development of economic and 
social infrastructure; it appears less frequent in operations aimed at supporting the local private 
sector since multi-beneficiaries intermediated loans are not captured in the classic definition of 
co-financing. The list of co-financed operations signed in the regions covered by the Mandate 
in 2014 is included in Annex IV.  

The  EIB  has  worked  with  other  MDBs  since  2010  on  a  harmonised  approach  to  climate 
finance  tracking  and  reporting.  A  joint  report  including  EIB  Climate  Action  figures  was 
published at the UNFCCC Conference of the Parties in 2012 and 2013; covering financing in 
emerging and developing economies. 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. 

In  another  field,  the  EIB  aims  to  continually  improve  the  carbon  footprint  methodology, 
learning  from  and  exchanging  with  peers  and  partners,  and  so  the  EIB  works  and  takes  an 
active and leading role in the IFI working group on GHG accounting for projects. In particular 
in  2014  essential  harmonisation  discussions  have  focussed  on  RE  projects,  with  EE  projects 
likely to be tackled next. This work has already shown dividends as an increasing interest in 
reporting  on  GHG  emissions  for  Green  Bonds  has  assisted  the  EIB  to  lead  the  way  on 
transparent  reporting  of  both  absolute  and  relative  emissions  for  its  Climate  Action  Bond 
portfolio; to better inform investors in this growing market. 

Also noteworthy is the establishment of the Green Climate Fund (GCF), which is emerging as 
a key vehicle to finance climate action projects in developing countries. The EIB currently has 
observer  status  and  has  applied  for  accreditation  as  an  implementing  entity;  the  EIB  is 
exploring  with  the  Commission  how  best  to  ensure  alignment  of  the  EIB’s  use  of  GCF 
resources with EU policy and priorities for climate investments outside Europe.  

Finally there is significant knowledge sharing work on adaptation and resilience where EIB is 
a  key  contributor  –  both  within  the  EUFIWACC  group  (European  Finance  Institutions 
Working Group on Adaptation to Climate Change) and in the wider IFI community – working 
group on climate risk screening. 

A joint statement by Multilateral Development Banks (MDBs) on climate finance, published 
in  September  2014,  highlights  that  the  MDBs  aim  “to  maintain  the  developmental  role,  in 
order to spur further sustainable growth of the Green Bond market”. The EIB, a signatory to 
the statement, remains committed to this market segment and will continue to grow its Green 
Bond issuance to support market development and remain responsive to investors. 

42 

 
 
ANNEX I - LIST OF OPERATIONS SIGNED IN 2014 

Eastern Europe, Southern Caucasus and Russia 

Signed (EURm) / 
Framework 

Objective supported 

COUNTRY 

OPERATION 

G
u
a
r
a
n
t
e
e

E
L
M

-
C
o
m
p
r
e
h

.

R
i
s
k
G
u
a
r
a
n
t
e
e

E
L
M

-
P
o

l
i
t
i
c
a

l

s
e
c
t
o
r
d
e
v
.

L
o
c
a

l

p
r
i
v
a
t
e

E
c
o
n
o
m
i
c

I

n
f
r
a

S
o
c
i
a

l

&

C

l
i

m
a
t
e
A
c
t
i
o
n

ARMENIA 

ARMENIA 

ARMENIA 

AZERBAIJAN 

REPULIC OF 
MOLDOVA 
REPULIC OF 
MOLDOVA 

UKRAINE 

UKRAINE 

UKRAINE 

UKRAINE 

UKRAINE 

UKRAINE 

YEREVAN WATER SUPPLY IMPROVEMENT 

WATER SECTOR COMMUNAL IINFRASTRUCTURE 

ARMENIA APEX LOAN FOR SMES 

ACCESSBANK AZERBAIJAN LOAN FOR SMES 

NORTH MOLDOVA WATER 

FRUIT GARDEN OF MOLDOVA 

URENGOY-POMARY-UZHGOROD GAS PIPELINE 

BESKYD RAILWAY TUNNEL 

ASTARTA AGRI-FOOD AND CLIMATE CHANGE 
ADAPTATION 

MHP AGRI-FOOD FACILITY  

APEX LOAN FOR SMES AND MID-CAPS 

UKRAINE EARLY RECOVERY 

5 

26 

50 

10 

120 

150 

55 

400 

200 

25 

50 

85 

 X  

 X  

 +  

 X  

 X  

 X  

 X  

 X  

 X  

 +  

 X  

 X  

 X  

 +  

 X  

 +  

 +  

Total 2014 Operations Signed   

1,016 

160 

i

R
e
g
o
n
a

l

I

n
t
e
g
r
a
t
.

X  

 +  

 full contribution  

 partial contribution  

Sector 

Water, sewerage 

Water, sewerage 

Credit lines 

Credit lines 

Water, sewerage 

Credit lines 

 X  

 X  

Energy 

Transport 

Industry 

Industry 

Credit lines 

Energy, Industry, Urban dev, 
Water, sewerage, Composite 
infa. 

 
 
 
 
   
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  
  
  
  
  
  
Pre-Accession Countries 

COUNTRY 

OPERATION 

ALBANIA 

VLORE BYPASS 

BOSNIA AND HERZEGOVINA 

ELECTRICITY DISTRIBUTION BIH B, C 

BOSNIA AND HERZEGOVINA 

RENEWABLE ENERGY HPP VRANDUK 

BOSNIA AND HERZEGOVINA 

CORRIDOR VC POCITELJ BIJACA 

MONTENEGRO 

MONTENEGRO 

MONTENEGRO 

SERBIA 

SERBIA 

SERBIA 

TURKEY 

TURKEY 

TURKEY 

TURKEY 

TURKEY 

TURKEY 

TURKEY 

TURKEY 

TURKEY 

TURKEY 

TURKEY 

TURKEY 

TURKEY 

TURKEY 

TURKEY 

IDF LOAN FOR SMES AND PRIORITY PROJECTS B 

SGME LOAN FOR SMES AND PRIORITY PROJECTS 

ROAD REHABILITATION AND CITY BYPASS 

RLRS LOAN FOR SMES AND OTHER PRIORITIES 

INTESA LOAN FOR SMES AND OTHER PRIORITIES III 

CREDIT AGRICOLE LOAN FOR SME AND OTHER PRIORITIES II 

ZIRAAT BANK IPARD MBIL 

DENIZBANK MUNICIPAL MBIL 

ZIRAATBANK LOAN FOR SMES AND MIDCAPS B 

ING BANK TURKEY SME AND MID-CAP LOAN II 

AKBANK LOAN FOR SMES AND MIDCAPS II 

HALKBANK LOAN FOR SMES AND MIDCAPS II 

VAKIFBANK LOAN II FOR SMES AND MIDCAPS A 

EXIMBANK LOAN FOR SMES AND MIDCAPS II A 

GARANTI BANK LOAN FOR SMES AND MIDCAPS 

DEVELOPMENT BANK ENERGY AND ENVIRONMENT LOAN A 

TSKB ENERGY AND ENVIRONMENT LOAN A 

PETKIM ETHYLENE PLANT 

VESTEL ELEKTRONIK RDI 

TOFAS RDI 

e
e

G
u
a
r
a
n
t

h

C
o
m
p
r
e

18 

35 

38 

100 

30 

100 

Signed (EURm) / Framework 

Objective supported 

O
R
F

d
e
v
.

s
e
c
t
o
r

p
r
i
v
.

L
o
c
a

l

I

n
f
r
a

E
c
o

.

S
o
c
i
a

l

&

A
c
t
i
o
n

C

l
i

m
a
t
e

I

n
t
e
g
r
a
t
.

i

R
e
g
o
n
a

l

Sector 

 X  

 X  

 X  

 X  

 + 

 +  

 X  

 +  

 +  

 +  

 +  

 X  

Transport 

 X  

Energy 

 X  

 X  

Energy 

 X  

Transport 

 X  

Credit lines 

 X  

Credit lines 

 X  

Transport 

     Credit lines 

     Credit lines 

     Credit lines 

 +  

 X  

Agri., fish., fores. 

 X  

Credit lines 

     Credit lines 

 X  

Credit lines 

 X  

Credit lines 

     Credit lines 

 X  

Credit lines 

 X  

Credit lines 

     Credit lines 

 X  

 X  

 X  

 +  

     Ener., Ind., Water, sew. 

     Ener., Water, sew. 

Industry 

 X  

Industry 

 +  

 X  

 X  

Industry 

Transport 

25 

20 

20 

35 

60 

100 

100 

200 

150 

200 

100 

100 

150 

100 

100 

40 

60 

55 

 X  

 +  

 +  

 +  

 +  

 +  

 X  

 +  

 X  

 X  

 X  

 X  

 X  

 X  

 X  

 X  

 X  

BOSPHORUS TUNNEL TRANCHE B A 

200 

 X  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
    
    
    
    
    
    
    
    
    
    
  
    
  
    
  
    
    
  
    
  
    
  
    
  
    
  
    
  
    
    
  
    
    
  
    
    
  
    
    
  
    
    
  
    
    
  
    
    
  
    
  
    
  
    
    
    
  
    
    
  
    
  
    
    
TURKEY 

TURKEY 

ISTANBUL EARTHQUAKE RISK MITIGATION II B 

ISBANK URBAN TRANSFORMATION 

Total 2014 Operations Signed   

100 

621 

200 

1,815  

 X  

 X  

 +  

Urban devt. 

Urban devt. 

 
 
    
    
    
    
  
    
    
  
  
  
  
  
  
Mediterranean Partner Countries 

COUNTRY 

OPERATION 

EGYPT 

EGYPT 

EGYPT 

ISRAEL 

JORDAN 

LEBANON 

LEBANON 

MOROCCO 

KAFR EL SHEIKH WASTE WATER TREATMENT  

EGYPTIAN POLLUTION ABATEMENT(EPAP) III 

EL SHABAB POWER PLANT 

MEGALIM SOLAR THERMAL PLANT 

MICROFUND FOR WOMEN 

FIRST NATIONAL BANK 

PRIVATE SECTOR FACILITIES IV 

PROGRAMME DE MODERNISATION ROUTIERE 

MOROCCO 

ZENATA URBAN DEVELOPMENT PROJECT 

MOROCCO 

MOROCCO 

MOROCCO, REGIONAL - 
MEDITERRANEAN 

OUARZAZATE II (PARABOLIC) (MAROC) 

OUARZAZATE III (TOWER) (MAROC) 

CAPMEZZANINE FUND II B 

MOROCCO 

ATTADAMOUNE (AMSSF II) 

REGIONAL - MEDITERRANEAN 

EUROMENA III FUND B 

REGIONAL - NORTH AFRICA 

ABRAAJ NORTH AFRICA FUND II 

TUNISIA 

TUNISIA 

TUNISIA 

TUNISIA 

ETAP / OMV SOUTH TUNISIAN GAS 

PG VI TUNISIE B 

MODERNISATION ETABLISSEMENTS SCOLAIRES 

TAYSIR 

G
u
a
r
a
n
t
e
e

E
L
M

-
C
o
m
p
r
e
h

.

R
i
s
k
G
u
a
r
a
n
t
e
e

77 

70 

205 

150 

150 

100 

50 

150 

100 

70 

Signed (EURm) / Framework 

Objective supported 

E
L
M

-
P
o

l
i
t
i
c
a

l

O
R
F

3
r
d
p
a
r
t
y
r
e
s
.

s
e
c
t
o
r
d
e
v
.

L
o
c
a

l

p
r
i
v
a
t
e

E
c
o
n
o
m
i
c

I

n
f
r
a

S
o
c
i
a

l

&

C

l
i

m
a
t
e
A
c
t
i
o
n

I

n
t
e
g
r
a
t
.

i

R
e
g
o
n
a

l

 X  

 X  

 X  

 X  

 X  

 +  

 X  

 +  

 X  

 +  

 X  

 X  

 X  

 X  

 +  

 +  

 X  

 X  

 X  

 +  

 X  

 X  

 X  

 X  

 X  

 X  

150 

90 

2 

11 

6 

2 

10 

20 

1 

230 

Sector 

     Water, sewerage 

     Credit lines 

     Energy 

     Energy 

     Services 

     Services 

     Credit lines 

     Transport 

Transport, Urban 
development, Water, 
sewerage 

     Energy 

     Energy 

Services 

 X  

     Services 

 X   Services 

 X   Services 

     Energy 

     Credit lines 

     Education 

     Services 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
    
  
    
    
    
    
    
    
    
    
  
    
    
    
  
    
    
  
    
    
    
    
  
    
    
    
  
    
    
    
    
  
    
    
    
    
  
    
    
    
    
  
    
    
    
  
    
    
    
    
  
    
    
    
    
  
    
    
    
    
  
    
    
    
    
  
    
    
    
    
    
    
    
  
    
    
    
    
  
    
    
    
    
    
  
    
    
TUNISIA 

PARTENARIAT BEI-BTK-RESEAU ENTREPRENDRE 

Total 2014 Operations Signed   

1,122 

20 

260 

230 

52 

 X  

     Credit lines 

Asia and Latin America 

Signed (EURm) / Framework 

Objective supported 

COUNTRY 

OPERATION 

G
u
a
r
a
n
t
e
e

C
o
m
p
r
e
h

G
u
a
r
a
n
t
e
e

BANGLADESH 

DHAKA ENVIRONMENTALLY SUSTAINABLE WATER 
SUPPLY 

BOLIVIA 

ROAD F-21 UYUNI - TUPIZA 

BRAZIL 

CHILE 

SAO PAULO ROLLING STOCK 

CHILE CCFL 

ECUADOR 

ADMINISTRATIVE AND URBAN INFRASTRUCTURE 

INDIA 

INDIA 

INDIA 

IREDA-RENEWABLE ENERGY AND ENERGY 
EFFICIENCY FL 
IIFCL ENERGY SUSTAINABILITY AND CLIMATE 
ACTION FL 

SBI LOAN FOR SMES AND MID-CAPS 

MEXICO 

MEXICO GLOBAL LOAN FOR SMES AND MIDCAPS 

MONGOLIA 

ULAANBAATAR WWS 

TAJIKISTAN 

TAJIK - KYRGYZ POWER INTERCONNECTION 

100 

50 

200 

100 

100 

50 

70 

P
o

l
i
t
i
c
a

l

R
i
s
k

O
R
F

s
e
c
t
o
r
d
e
v
.

L
o
c
a

l

p
r
i
v
a
t
e

     150 

     200 

     200 

      +  

      X  

150 

Total 2014 Operations Signed   

670 

150 

550 

C

l
i

m
a
.

A
c
t
i
o
n

 +  

 X  

 X  

 X  

 X  

 +  

S
o
c
i
a

l

&
E
c
o
n

.

I

n
f
r
a

 X  

 X  

 X  

 X  

 X  

 X  

 X  

 +  

 X  

 X  

I

n
t
e
g
r
a
t
.

R
e
g
o
n

i

.

SECTOR 

Water, sewerage 

 X  

Transport 

Transport 

Energy 

Urban development 

Energy 

Energy 

Credit lines 

Credit lines 

Energy, Transport, Water, sewerage 

 X  

Energy 

 
 
    
    
  
    
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
         
    
    
         
    
    
         
    
    
    
    
    
         
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
         
    
    
    
         
    
  
  
  
  
  
  
 
 
 
 
Republic of South Africa 

Signed (EURm) / Framework 

Objective supported 

COUNTRY 

OPERATION 

SOUTH AFRICA 

ESKOM KIWANO CSP PROJECT 

SOUTH AFRICA 

KA XU CSP PROJECT B 

Total 2014 Operations Signed   

R
i
s
k

G
u
a
r
a
n
t
e
e

G
u
a
r
a
n
t
e
e

E
L
M

-
C
o
m
p
r
e
h

.

75 

100 

175 

E
L
M

-
P
o

l
i
t
i
c
a

l

O
R
F

3
r
d
p
a
r
t
y
r
e
s
.

d
e
v
.

s
e
c
t
o
r

L
o
c
a

l

p
r
i
v
a
t
e

 +  

I

n
f
r
a

E
c
o
n
o
m
i
c

S
o
c
i
a

l

&

C

l
i

m
a
t
e
A
c
t
i
o
n

I

n
t
e
g
r
a
t
.

i

R
e
g
o
n
a

l

SECTOR 

 X  

 +  

 X  

 X  

     Energy 

     Energy 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
    
  
    
    
    
  
 
 
  
  
  
  
  
  
 
 
REGIONAL BLENDING MECHANISMS (TA, GRANTS APPROVED) 

2007 

2008 

2009 

2010 

2011 

2012 

2013 

2014 

Total 2007 - 2014 

ANNEX II - EU BUDGET RESOURCES COMPLEMENTING EIB LOANS IN 2007-2014 

WESTERN BALKANS INVESTMENT FRAMEWORK (WBIF)* 

NEIGHBOURHOOD INVESTMENT FACILITY (NIF) 

        -    

52.50 

        -    

9.80 

50.25 

4.00 

INVESTMENT FACILITY FOR CENTRAL ASIA (IFCA) 

        -    

        -    

        -    

LATIN AMERICA INVESTMENT FACILITY (LAIF) 

        -    

        -    

        -    

8.40 

27.20 

2.50 

7.00 

49.36 

50.00 

20.72 

80.50 

        -    

        -    

 47.35  

52.00 

1.80 

        -    

        -    

18.00 

10.18 

132.7 

        -    

        -    

ASIA INVESTMENT FACILITY (AIF) 

        -    

        -    

        -    

        -    

        -    

        -    

5.70 

5.00 

OTHER TA AND GRANTS COMPLEMENTING EIB PROJECTS 

STRUCTURAL FUNDS TO EIB PROJECTS - WESTERN BALKANS * 

        -    

        -    

        -    

        -    

IPA CONTRIBUTIONS TO EIB SME OPERATIONS - TURKEY ** 

        -    

        -    

        -    

62.00 

75.00 

18.00 

51.00 

 119.35  

        -    

        -    

        -    

        -    

IPA CONTRIBUTIONS TO EIB FINANCED TRANSPORT - TURKEY ** 

        -    

        -    

        -    

        -    

308.00 

        -    

        -    

        -    

MUNICIPAL FINANCE FACILITY (MFF)  

SME FINANCE FACILITY (SME FF) *** 

        -    

        -    

7.50 

1.00 

        -    

3.50 

ENERGY EFFICIENCY FINANCE FACILITY (EEFF) 

        -    

        -    

        -    

TURKEY/FEMIP SUPPORT FUND 

FEMIP SUPPORT FUND (EXCL. TURKEY) 

        -    

        -    

17.50 

16.90 

1.06 

12.20 

SUPPORT TO FEMIP ENVELOPE (2007-2013) 

        -    

        -    

        -    

FEMIP TRUST FUND* (TA SIGNED) 

0.46 

1.96 

3.40 

RISK CAPITAL SIGNATURES 

MEDA / ENPI RISK CAPITAL 

FEMIP TRUST FUND* 

46.45 

2.00 

62.00 

5.80 

25.00 

5.00 

1.20 

-1.00 

3.90 

1.00 

        -    

12.70 

1.50 

1.20 

        -    

        -    

0.60 

15.60 

        -    

        -    

        -    

        -    

        -    

        -    

        -    

        -    

10.10 

4.09 

1.88 

21.50 

6.90 

0.81 

10.52 

1.17 

10.00 

1.20 

12.52 

1.21 

1.03 

6.31 

19.00 

5.00 

1.38 

11.63 

0.59 

0.27 

8.92 

1.07 

28.76 

        -    

14.50 

1.00 

20.23 

     9.00  

        -    

GLOBAL ENERGY EFFICIENCY AND RENEWABLE ENERGY FUND* 

        -    

        -    

22.24 

   10.00  

238.76 

356.20 

4.30 

25.00 

10.70 

245.35 

80.00 

308.00 

23.60 

5.60 

19.50 

1.06 

60.37 

36.19 

16.84 

227.21 

26.90 

73.98 

TOTAL 
NB: figures reported from the MFF, SME FF and EE FF are including Croatia for the period 2007-2012, for a total EUR 19.20million. De-commitment of 0.50m in 2014. 
* includes other sources of funding than EU budget 
** amount reported on the year of signature of the EIB project 
*** negative value corresponds to de-commitment 

157.46 

126.65 

165.67 

553.18 

219.19 

66.41 

296.75 

174.24 

1,759.55 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX III - LIST OF EIB-MANAGED EU BUDGET FUNDED OPERATIONS (TA, GRANTS, EQUITY) APPROVED OR SIGNED IN 2014 

CONTRACT NAME 

INSTRUMENTS 

TARGET COUNTRIES 

2014(EURm) 

WESTERN BALKANS INVESTMENT FRAMEWORK (WBIF) (EC CONTRIB. - APPROVED) 

FLOOD RISK MANAGEMENT IN REPUBLIKA SRPSKA 

WATER & SANITATION PROJECT RS 

FLOOD PROJECTS BIH – URGENT MEASURES 

N9 PRISTINA-PEJE ROAD ROUTE 6A FROM KIJEVE - KLINA TO ZAHA 

JUDICIARY FACILITIES - KATANICEVA BUILDING  

SEECEL CENTRE - IMPLEMENTATION SUPPORT 

TOTAL 

NEIGHBOURHOOD INVESTMENT FACILITY (NIF) 

EGYPTIAN POLLUTION ABATEMENT PROGRAMME III 

CAIRO METRO LINE 3 PHASE 3 

INTEGRATED AND SUSTAINABLE HOUSING AND COMMUNITY DEVELOPMENT PROGRAMME  

MOLDOVA FRUIT GARDEN  

NOOR III: TOWER PLANT OF THE OUARZAZATE SOLAR COMPLEX 

MODERNISATION ÉTABLISSEMENTS SCOLAIRES 

MUNICIPAL PROJECT SUPPORT FACILITY (MPSF) 

RISK CAPITAL FACILITY FOR THE SOUTHERN NEIGHBOURHOOD COUNTRIES 

TOTAL 

ASIA INVESTMENT FACILITY (AIF) (EC CONTRIB. - APPROVED) 

VIENTIANE SUSTAINABLE URBAN TRANSPORT 

TOTAL 

SME FINANCE FACILITY (SME FF) 

IN COMPLEMENT TO LOAN FOR SMES 

TOTAL 

FEMIP SUPPORT FUND (AMENDMENT SIGNED) 

ONAS – UGP 

BOSNIA - HERZEGOVINA 

TA 

6 TA; 4 IG 

TA 

TA 

2.2 TA; 6 IG 

IG 

KOSOVO 

SERBIA 

REGIONAL 

EGYPT 

EGYPT 

EGYPT 

MOLDOVA 

MOROCCO 

7.5 TA; 12.5 IG 

TUNISIA 

TA 

RC 

TA 

GRANTS 

REGIONAL 

 REGIONAL 

LAO PDR 

CROATIA 

TURKEY 

TA 

TUNISIA 

1.50 

1.50 

4.80 

0.80 

0.38 

1.20 

10.18 

10.00 

4.00 

3.50 

8.20 

50.00 

20.00 

12.00 

25.00 

132.70 

5.00 

5.00 

-0.50 

1.10 

0.60 

0.27 

 
 
 
 
  
  
 
  
  
  
 
  
  
 
 
 
 
 
 
 
 
 
 
  
  
 
 
 
  
  
 
  
  
  
 
 
 
  
  
 
  
  
  
 
 
TOTAL 

SUPPORT TO FEMIP ENVELOPE (SIGNED) 

TECHNICAL ADVISORY TO SUPPORT THE SPACE FOR MED ACCELERATION PROGRAM 

FEASIBILITY STUDY FOR THE TRIPOLI - BEIRUTH RAILWAY 

TA TO SUPPORT THE TRANSFORMATION PROCESS - ARAB CENTRE FOR AGRICULTURAL DEVELOPMENT  

ADVISORY PROGRAMME ON WATER WASTEWATER & SOLID WASTE MANAGEMENT SERVICES(MEHSIP II) 

TOTAL 

FEMIP TRUST FUND (SIGNED) 

ENHANCING THE IMPACT OF PRIVATE SECTOR DEVELOPMENT ON DEMOCRATIC TRANSITION IN THE MEDITERRANEAN PARTNER 
COUNTRIES 

FEASIBILITY STUDY ON DIASPORA AND START-UP PROGRAMME PACEIM  

TECHNICAL ADVISORY TO SUPPORT SEED ACCELERATORS IN THE FEMIP REGION 

EVALUATING RENEWABLE ENERGY MANUFACTURING POTENTIAL MED PARTNER COUNTRIES 

TAYSIR 

TOTAL 

ENPI RISK CAPITAL (SIGNED) 

MICROFUND FOR WOMEN 

FIRST NATIONAL BANK 

ATTADAMOUNE (AMSSF II) 

ABRAAJ NORTH AFRICA FUND II 

TOTAL 

TOTAL 

* FINAL APPROVALS FOR EIB LED OPERATIONS 

TA 

JORDAN 

LEBANON 

PALESTINE 

REGIONAL 

TA 

REGIONAL 

EQUITY FUND 

TUNISIA 

EQUITY FUND 

JORDAN 

LEBANON 

MOROCCO 

REGIONAL 

0.27 

0.68 

2.00 

0.25 

6.00 

8.92 

0.15 

0.04 

0.80 

0.08 

1.00 

2.07 

2.00 

5.50 

2.00 

5.00 

14.50 

41.53 

 
 
  
  
 
 
  
  
  
 
 
 
 
 
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
ANNEX IV TABLE ON CO-FINANCING WITH OTHER IFIS AND BLENDING WITH EU BUDGET 

MANDATE / FACILITY 

COUNTRY 

CONTRACT NAME 

PROJECT 
COST (EUR 
m) 

EIB LOAN 
SIGNED IN 2014 
(EUR m) 

Multilateral 
Financing 
Institutions 

European 
Bilateral 
Institutions 

EU budget 
contrib. 

ELM EAST-RU. 2014-2020 

UKRAINE 

URENGOY-POMARY-UZHGOROD GAS PIPELINE 

CLIMATE CHANGE MANDATE 2011-13 

SOUTH AFRICA 

ESKOM KIWANO CSP PROJECT 

ENP EE/SCA/RUS.1/2/07-31/12/13 

UKRAINE 

BESKYD RAILWAY TUNNEL 

CLIMATE CHANGE MANDATE 2011-13 

BOSNIA AND 
HERZEGOVINA 

RENEWABLE ENERGY HPP VRANDUK 

ENP MED. 1/2/2007-31/12/2013 

EGYPT 

KAFR EL SHEIKH WASTE WATER TREATMENT (EGYPT) 

PRE-ACCESSION - 9048M - 07-13 

MONTENEGRO 

ROAD REHABILITATION AND CITY BYPASS 

PRE-ACCESSION - 9048M - 07-13 

ELM MED 2014-2020 

PRE-ACCESSION - 9048M - 07-13 

ENP MED. 1/2/2007-31/12/2013 

ENP EE/SCA/RUS.1/2/07-31/12/13 

ENP EE/SCA/RUS.1/2/07-31/12/13 

CLIMATE CHANGE MANDATE 2011-13 ; RSA 
DEC.1/2/2007-31/12/2013 

TURKEY 

EGYPT 

ALBANIA 

TUNISIA 

ARMENIA 

ARMENIA 

ISTANBUL EARTHQUAKE RISK MITIGATION II B 

EGYPTIAN POLLUTION ABATEMENT(EPAP) III 

VLORE BYPASS 

MODERNISATION ETABLISSEMENTS SCOLAIRES 

YEREVAN WATER SUPPLY IMPROVEMENT 

WATER SECTOR COMMUNAL INFRASTRUCTURE 

SOUTH AFRICA 

KA XU CSP PROJECT B 

ALA DEC.1/2/2007-31/12/2013 

BOLIVIA 

ROAD F-21 UYUNI - TUPIZA 

ELM MED 2014-2020 

MOROCCO 

ZENATA URBAN DEVELOPMENT PROJECT 

CLIMATE CHANGE MANDATE 2011-13 ;  
PRE-ACCESSION - 9048M - 07-13 

TURKEY 

BOSPHORUS TUNNEL TRANCHE B A 

ALA DEC.1/2/2007-31/12/2013 

BANGLADESH 

DHAKA ENVIRONMENTALLY SUSTAINABLE WATER SUPPLY 

ENP MED. 1/2/2007-31/12/2013 

EGYPT 

EL SHABAB POWER PLANT 

ELM MED 2014-2020 

MOROCCO 

OUARZAZATE II (PARABOLIC) (MAROC) 

ALA DEC.1/2/2007-31/12/2013 

MONGOLIA 

ULAANBAATAR WWS & B 

355.00 

856.50 

163.20 

86.40 

163.52 

65.70 

660.00 

149.38 

67.60 

213.00 

17.80 

73.00 

569.00 

129.57 

800.10 

3,749.10 

493.00 

413.30 

1,068.70 

240.00 

150.00 

75.00 

55.00 

37.50 

77.00 

30.00 

100.00 

70.00 

18.00 

70.00 

5.14 

25.50 

100.00 

50.03 

150.00 

200.00 

100.00 

205.00 

100.00 

50.00 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

WBIF 

NIF 

NIF 

IPA 

NIF 

NIF 

NIF 

LAIF 

NIF 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ELM PRE-ACCESSION 2014-2020 

TURKEY 

ZIRAAT BANK IPARD MBIL 

ELM MED 2014-2020 

MOROCCO 

OUARZAZATE III (TOWER) (MAROC) 

ELM EAST-RU. 2014-2020 

ELM PRE-ACCESSION 2014-2020 

MOLDOVA, REPUBLIC 
OF 
BOSNIA AND 
HERZEGOVINA 

NORTH MOLDOVA WATER 

CORRIDOR VC POCITELJ BIJACA 

ELM LATIN AMERICA 2014-2020 

ECUADOR 

ADMINISTRATIVE AND URBAN INFRASTRUCTURE (ECUADOR) 

ELM EAST-RU. 2014-2020 

MOLDOVA, REPUBLIC 
OF 

FRUIT GARDEN OF MOLDOVA 

ELM CENTRAL ASIA 2014-2020 

TAJIKISTAN 

TAJIK - KYRGYZ POWER INTERCONNECTION 

PAF-32200M-2000-2020 

TURKEY 

TOFAS RDI 

SPANISH INITIATIVE - RC MED 

REGIONAL - 
MEDITERRANEAN 

EUROMENA III FUND B 

270.00 

855.00 

30.00 

225.05 

257.13 

300.00 

281.70 

115.00 

115.00 

100.00 

50.00 

10.00 

100.00 

99.98 

120.00 

70.00 

55.00 

10.00 

X 

X 

X 

X 

X 

X 

IPA 

NIF 

NIF 

WBIF 

NIF 

X 

X 

X 

Total, of which EIB financing volume 

- co-financed with other IFIs 

12,782.76 

2,283.15 

2,063.15 

- benefiting from EU grants        833.17 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
 
 
 
 
 
 
ANNEX V – CASE STUDIES 

Completed project case study: Easing funding constraints for FYROM SMEs 

In 2012 the EIB provided a EUR 100million loan to the Macedonian Bank for Development 
Promotion (MBDP) to improve access to finance for the country’s SMEs. The third loan of 
this  kind  with  MBDP,  it  enabled  this  national  promotional  bank  in  the  Former  Yugoslav 
Republic of Macedonia (FYROM) to on-lend the funding to local banks, to provide funding to 
446 SMEs and 4 mid-cap companies. Loans averaged EUR 222 000, with an average tenor of 
5.5  years,  a  significant  improvement  on  the  loans  tenors  typically  available  to  SMEs  in  the 
local market. 

This lending has helped to sustain 16 542 jobs in the beneficiary companies, and to create over 
2 000 new jobs. It has help to finance investments by beneficiary companies worth EUR 171m 
in total. This kind of support is critical in a country where the SME sector makes up 80% of 
employment, but remains relatively stagnant and focused on low productivity activities. Loan 
growth in the country remains weak following the global financial crisis. With regional parent 
banks under pressure, local banks generally need to access liquidity locally and face liquidity 
constraints.  

In this context, the funding and funding conditions provided by the EIB has made a significant 
difference  to  SME  access  to  finance  and  the  conditions  that  are  offered,  enhancing 
competition  among  local  banks  to  finance  SMEs  and  helping  the  productivity  and  export 
performance  of  the  SME  sector.  The  effectiveness  of  the  operation  has  been  improved  by 
having  an  experienced  local  partner  like  MBDP  that  has  established  working  relationships 
with small local banks and can help to enhance the selection of final beneficiaries. 

 
 
 
 
 
 
 
Completed project case study: La Venta III - Wind energy in Mexico 

Electricity generation in Mexico is mostly based on thermal combustion plants, of which 
90%  rely  on  fossil  fuels.  The  country  is  also  experiencing  a  high  growth  in  energy 
demand and the promotion of renewable energy is one of the targets of Mexico’s energy 
policy. The La Venta III Wind Farm project, signed in 2010, provided an opportunity for 
the  EIB  to  promote  the  development  of  clean  energy  supply  through  private  sector 
investment,  the  alternative  being  thermal  power  generation  from  fossil  fuels  with 
associated greenhouse gas emissions. 
The project consisted of the construction of 121 turbines with a generation capacity of 
103MW, and a 10km of  overhead transmission line to connect the wind farm to the grid. 
Located in the State of Oaxaca, it capitalises on the strong winds in the area that blow 
from the Gulf of Mexico in the north to the Pacific Ocean in the south. The promoter, 
Iberdrola S.A., is a leading European  company in the energy sector with experience in 
the  wind  sector  internationally.  The  company  obtained  a  license  for  the  La  Venta  III 
wind farm following an international public tender.  
A good quality Environmental Impact Assessment was carried out to evaluate potential 
impacts  of  the  project,  including  on  migratory  birds  and  local  communities.  Periodic 
monitoring potential impacts is being carried out, while lease arrangements with affected 
land owners where  implemented, providing  them  with  an  attractive revenue  stream for 
30  years,  whilst  also  allowing  continued  use  of  the land  for  agricultural  purposes. The 
promoter  has  also  carried  out  further  investments  in  local  communities,  including  the 
construction  of  a  comprehensive  community  school  in  the  town  of  La  Blanca  and  the 
expansion  of  selected  water  and  sewerage  installations  in  the  town  of  Santo  Domingo 
Ingenio.  

 
 
 
 
The  project  entered  commercial  operation  at  the  end  of  2012.  It  was  delivered  at  4% 
below  original  cost  estimates.  In  its  first  year  of  operation  it  produced  254GWh  of 
electricity  –  enough  to  supply  over  140  000  households  –  with  annual  generation 
expected to reach 267 GWh/year. The cost of electricity production at La Venta III, at an 
estimated  EUR66  to  EUR91  per  MWh  (at  5%  and  10%  discount  rates  respectively)  is 
considerably lower than for mature, grid-connected, renewable energy in the EU. With 
effectively  zero  absolute  emissions,  it  is  estimated  that  GHG  emissions  avoided  by 
electricity  generation  from  this  project  are  120kt  CO2-eq/year  compared  to  the  likely 
alternatives for power generation.  

The added value of EIB involvement in this project was both financial and related to the 
standards  applied.  The EUR 78.5million EIB loan provided long-term financing which 
contributed to the financial sustainability of the project at a time of increased difficulty 
in obtaining this type of financing as a result of the global financial crisis. The other half 
of  the  financing  was  provided  by  the  promoter.  The  concession  agreement  guarantees 
access  to  the  grid  for  the  electricity  generated  by  the  project  for  the  duration  of  the 
concession. Prior to disbursement, the EIB also required specific commitments from the 
promoter and turbine supplier related to the design the foundations and turbines in order 
to mitigate risks from extreme weather and seismic events. Further undertakings related 
to  additional  assessments  of  project  impacts  –  including  cumulative  impacts  -  on 
residential and migratory birds and bat species, and appropriate mitigation measures to 
minimise any residual risk. These requirements were satisfactorily met. 

 
 
 
 
Completed  project  case  study:  Mersin  Wastewater  –  addressing  Mediterranean 
pollution 

In  Mersin,  a  city  of  over  900  000  inhabitants  on  the  south-eastern  coast  of  Turkey, 
wastewater  used  to  be  discharged  into  the  Mediterranean  Sea  with  no  treatment.  This  had 
severe environmental consequences and posed risks to the health of the local population. The 
problem was being exacerbated by the rapid growth of the city. 
The  Mersin  wastewater  project  aimed  to  provide  the  city  with  adequate  wastewater 
collection  and  treatment  infrastructure  to  ensure  compliance  with  national  environmental 
legislation and with the more stringent  environmental standards set by European directives 
on urban wastewater. This operation supported the EU policy to protect the environment in 
the Mediterranean region, as formalised in the EUROMED II Mandate. 
The project consisted of the upgrade of the existing wastewater collection infrastructure and 
the  construction  of  a  wastewater  treatment  plant  with  a  1.1  million  person-equivalent 
capacity, a deep sea outfall and an adequate sludge disposal system. 
Wastewater  from  the  Mersin  area  is  now  no  longer  discharged  in  the  sea  without  prior 
treatment.  As  a  result,  bacteriological  concentrations  near  the  shore  and  the  risk  of 
groundwater contamination are now limited, reducing health risks for the local population. 
The  49  million  m3  of  sewage  water  treated  every  year  represents  a  substantial  annual 
reduction  in  the  discharge  of  various  pollutants:  organic  matter  (9  800  tonnes  in  terms  of 
biochemical  oxygen  deficiency  (BOD5),  nitrogen  (1  850  tonnes),  and  phosphorous  (230 
tonnes). 

This has benefitted the aquatic environment of the bay of Mersin, which serves as the natural 
habitat of sea turtles and of a broad variety of fish species. Improved water quality has made 
the  beaches  and  coastal  waters  in  proximity  of  Mersin  suitable  for  recreation,  potentially 

 
 
 
 
 
 
 
providing a boost to local tourism. The EIB’s EUR 60million long-term loan to MESKI, the 
municipal company responsible for water and wastewater services in Mersin, was essential 
to the realisation of the project, due to the lack of alternative long-term financing sources for 
Turkish municipalities. It covered approximately 50%  of the total EUR 116million cost of 
the investment.  
Due to the limited experience of MESKI with projects of this size, the EIB also helped in the 
preparation  of  the  project  and  in  putting  in  place  the  necessary  conditions  for  satisfactory 
implementation.  Management  of  the  project  was  assigned  to  an  independent  Project 
Management Unit, assisted by consultants with international experience and reporting to the 
EIB. The EIB also ensured that an adequate plan for the disposal of sludge would be in place 
prior to disbursement of the loan. This investment in Mersin is part of wider involvement by 
the EIB in the region’s wastewater sector that includes two other sanitation projects in the 
neighbouring  cities  of  Adana  and  Tarsus.  The  EIB  encouraged  MESKI  to  meet  regularly 
with  the  service  providers  of  the  two  neighbouring  cities,  to  seek  common  technical 
solutions and exchange managerial experience. 
The  expected  outcomes  for  this  project  were  achieved  despite  challenges  in  project 
implementation.  A  long  delay  at  the  beginning  of  implementation  was  largely  due  to 
administrative changes impacting on the scope of the project. After the Project Management 
Unit  was  formed  in  2004,  the  administrative  area  of  Mersin  was  significantly  enlarged  to 
encompass  all  municipalities  and  villages  within  a  20  km  radius  from  the  city  centre, 
enlarging also the responsibilities of MESKI and the scope of the project, and resulting in a 
delay in implementation. The technical support by the Project Management Unit consultants 
and  the  exchange  of  experiences  with  the  neighbouring  areas  proved  to  be  important  in 
overcoming challenges linked to limited local experience in wastewater treatment and in the 
implementation of large scale projects. 

i http://www.eib.org/attachments/strategies/eib_statement_esps_en.pdf