COMMISSION STAFF WORKING DOCUMENT Mid-term evaluation of the European Union Guarantee for the EIB External Lending Mandate Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the mid-term review of the application of the Decision N° 466/2014/EU as regards the EU guarantee to the European Investment Bank against losses under financing operations supporting investment projects outside the Union
Date: 2016-09-14
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EIB loan, EU investment, European Investment Bank, adaptation to climate change, credit guarantee, financial loss, investment abroad, investment protection, private sector, project evaluation

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 14.9.2016  SWD(2016) 295 final   COMMISSION STAFF WORKING DOCUMENT Mid-term evaluation of the European Union Guarantee for the EIB External Lending Mandate Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the mid-term review of the application of the Decision N° 466/2014/EU as regards the EU guarantee to the European Investment Bank against losses under financing operations supporting investment projects outside the Union {COM(2016) 584 final} {SWD(2016) 294 final}  
 
 
Contents 

1. Introduction ......................................................................................................................................... 3 

1.1. Purpose of the evaluation ............................................................................................................. 3 

2. Background to the initiative ................................................................................................................ 3 

2.1. Description of the initiative and its objectives ............................................................................. 3 

3. Evaluation Questions ........................................................................................................................... 5 

4. Method ................................................................................................................................................ 6 

4.1. Main phases of the mid-term review ............................................................................................ 6 

4.2. Methodological tools employed ................................................................................................... 7 

4.3 Limitations of the method used ..................................................................................................... 8 

5. Answer to the evaluation questions ..................................................................................................... 9 

6. Conclusion ......................................................................................................................................... 13 

ANNEX 1 – Financial Database and Data Collection ........................................................................... 17 

ANNEX 2 – Set of Conclusions ............................................................................................................ 18 

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1. Introduction 

1.1. Purpose of the evaluation 

The purpose of this evaluation is to assess the application in the first years of Decision No 466/2014/EU ("the 
Decision") adopted on 16 April 2014 by the European Parliament and the Council granting an EU guarantee to 
the European Investment Bank ("EIB") against losses under financing operations supporting investment projects 
outside the Union over the period 2014-2020.  

The  Commission  delivered  a  mid-term  report  evaluating  the  overall  implementation  of  the  External  Lending 
Mandate ("ELM") and a Commission's proposal for amending the Decision.  

The Commission's mid-term report is based on the outcomes of the independent external evaluation. The report 
assesses  the  application  of  the  allocation  policy,  EIB  reporting  and  the  Result  Measurement  Framework 
("REM").  It  also  evaluates  the  potential  activation,  and  geographical  distribution  of  the  optional  additional 
amount of EUR 3 billion.  

The evaluation also contains conclusions and recommendations to improve the processes in the future. 

The independent external evaluation has been executed by a contractor who works under direct monitoring and 
supervision of a Steering Committee consisting of representatives from relevant Commission's DGs, European 
External Action Service ("EEAS") and the EIB. The findings of the final evaluation report of the Contractor and 
contribution from EIB feed into the Commission's mid-term report. 

2. Background to the initiative 

2.1. Description of the initiative and its objectives 

The Decision has the purpose of granting an EU guarantee to the EIB against losses under financing operations 
signed  over  the  period  2014-2020  in  support  of  investment  projects  in  eligible  countries  outside  the  Union 
(Annex III  to  the  Decision). Following  the signature of  the  Guarantee Agreement  by  the  Commission  and  the 
EIB on 25 July 2014, the current ELM entered into force. The EU guarantee is granted as a global guarantee in 
respect  of  payments  which  were  due  to  the  EIB  but  were  not  received  by  it.  These  payments  must  be  in 
connection with loans, loan guarantees and debt capital market instruments granted for or issued for the benefit 
of EIB investment projects outside of the Union. 

The EIB governing bodies are encouraged to take the necessary measures to adapt the EIB activity to contribute 
to  the  Union  external  policies  in  an  effective  manner,  and  to  adequately  meet  the  requirements  set  out  in  the 
Decision.  The  EU  guarantee  is  granted  only  for  EIB  financing  operations  which,  while  complying  with  the 
requirements laid out in the Decision, have added value on the basis of the EIB's own assessment and support 
any of the following high-level objectives, defined in Article 3 of the Decision: 

1.  Development  of  the  local  private  sector,  in  particular  support  to  small  and  medium-sized  enterprises 
("SMEs"); 

2. Development of social and economic infrastructure, including transport, energy, environmental infrastructure, 
information and communication technology, health and education; 

3. Climate change mitigation and adaptation. 

In  addition  to  those  three  high-level  objectives,  regional  integration  among  countries  is  considered  as  an 
underlying  objective, 
integration  between  Pre-accession  countries, 
Neighbourhood countries and the Union.  

in  particular  economic 

including 

The coverage of the EU guarantee allows the EIB to conduct operations outside the Union while limiting EIB's 
risk exposure and thus preserving its creditworthiness. In undertaking financing operations outside of the Union, 
the  EIB  indirectly  contributes  to  the  policy  objectives  of  the  Union,  which  include  reducing  poverty  through 

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inclusive  growth  and  sustainable  economy,  environmental  and  social  development  and  the  prosperity  of  the 
Union  in  changing  global  economic  circumstances.  EIB  financing  operations  must  therefore  be  aligned  with 
those objectives and general principles guiding Union external action and must contribute to the implementation 
of international environment agreements to which the Union is a party.  

To that end, the Commission, the EEAS and the EIB cooperate and ensure alignment of EIB external actions and 
EU external policy objectives with a view to maximising synergies between EIB financing and Union budgetary 
resources,  mainly  through  a  regular  and  systematic  dialogue  and  early  consultation  on  policies,  strategies  and 
project pipelines (Memorandum of Understanding between the Commission and the EIB in consultation with the 
EEAS signed on 12 September 2013). In order to provide practical measures to link the general objectives of the 
EU  guarantee  with  implementation  by  the  EIB,  updated  Regional  Technical  Operational  Guidelines  were 
adopted by the Commission on 8 May 2015. 

The EIB promotes local private sector development by supporting local investment in beneficiary countries and 
investment  projects  by  SMEs  from  the  Union.  The  EIB's  activities  focus  on  promoting  access  to  finance  by 
extending  credit  lines  to  local  financial  intermediaries  (mainly  banks)  for  on-lending  to  small  and  medium 
enterprises,  participation  in  private  equity  funds  and  risk  capital  to  high-growth  potential  companies,  equity 
finance for microfinance providers and direct loans to larger companies. 

Regarding the development of social and economic infrastructure, the EIB supports infrastructure projects in its 
traditional  sectors  of  intervention:  energy,  transport,  urban  development,  and  health  and  education,  as  well  as 
environmental  infrastructure  such  as  water  and  sanitation  and  green  infrastructure,  telecommunications  and 
broadband network infrastructure. 

In the field of climate change mitigation and adaptation, the EIB supports the Union’s aim of promoting low-
carbon  and  climate-resilient  growth  globally  and  contributes  to  the  overall  objective  of  the  United  Nations 
Framework Convention on Climate Change, in particular by avoiding or reducing greenhouse gas emissions in 
the  areas  of  renewable  energy,  energy  efficiency  and  sustainable  transport,  or  by  increasing  resilience  to  the 
adverse impacts of climate change on vulnerable countries, sectors and communities. The eligibility criteria for 
climate action projects are defined in the EIB Climate Change Strategy which has been updated. Over the period 
covered  by  the  Decision,  the  volume  of  those  operations  must  represent  at  least  25  %  of  total  EIB  financing 
operations. 

EIB  projects  contribute  to regional integration by  facilitating  the physical  movement  of goods and  labour, but 
also  by  fostering  international  collaboration  in  the  private  sector,  and  supporting  the  convergence  of 
neighbouring countries’ economies towards the Union. 

The  interaction  between  the  different  components  of  the  ELM  in  terms  of  inputs,  activities,  outputs  outcomes 
and impacts are described in the intervention logic below.  

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Intervention logic 

3. Evaluation Questions 

The primary step consisted in identifying objectives, the design characteristics and the implementation logic of 
the  ELM.  On  that  basis,  the  evaluator  detailed  each  question  with  judgement  criteria  and  related  indicators, 
aiming at making the final judgment explicit and at structuring the final answers to the evaluation questions. 

EQ1:  Are  the  objectives  set  out  in  Decision  No  466/2014/EU  still  relevant  considering  the  changes  in  the 
context,  in  particular  with  regard  to  geopolitics,  emerging  post-2015  development  finance  and  climate 
framework, and the EU external policy agenda, including its external blending mechanism? 

EQ2: Regarding the relevance of design, how does the allocation policy contribute to the effective use of the EU 
guarantee? 

EQ3:  Are  the  methods  used  by  the  EIB  relevant  to  analyse  the  financial  needs  of  the  beneficiaries,  their 
absorption  capacity  and  the  availability  of  other  sources  of  private  or  public  financing  for  the  relevant 
investments? 

EQ4:  How  does  the  EIB  reporting  towards  the  commission  allow  to  assess  the  compliance  of  EIB  financing 
operations  with  the  Decision  No  466/2014/EU  and  what  are  appropriate  measures  for  improvement  (if 
applicable)?  Are  the  reporting  requirements  regarding  greenhouse  gas  emissions  related  to  EIB  financing 
operations being fulfilled? 

EQ5:  What  is  the  relevance  of  the  set  of  indicators  and  criteria  developed  by  the  EIB,  the  REM  for  the 
evaluation of the Programme? 

EQ6: How does the EIB monitoring system contribute to the identification of barriers to effectiveness and allow 
overcoming them and how does the REM framework contribute to the ex-ante assessment of expected project 
results and enhance the EIB’s ability to report on actual results? 

EQ7: Is the programme able to detect and take into account the unintended effects on stakeholders? 

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Intervention logicDialogue, coordination and coherence strengthened between the EC and EIBOutputs (Operational objectives)  Outcomes (High-level objectives)Impacts (global objectives)Regional integration reinforced, in particular economic integration between pre-accession countries, neighbouringcountries and the EU The ELM contributes to achieve the MDGs and the SDGs (post 2015)Reinforcement of beneficiary’s capacity to appraise environmental, socialand development components of investment operationThe ELM contributes to achieve EU external policy objectivesClimate change mitigation and adaptation supportedThe ELM contributes to an inclusive and sustainable growthImproved access to finance for SMEsA multiplier effect on Financial intermediaries’ activities created and enhanced diversification of EIB's financial partnersContributeto targetof 25%of total EIB operationssupportingclimate change mitigation and adaptationLocal private sector development supportedSocial and economic infrastructure strengthenedInputsThe ELM supports the goals of the Aid Effectiveness frameworkEU guarantee for operations outside the EU (fixed  ceiling of EUR 27  bn+ optional 3 bn)Legal basis of the ELMTechnical expertise of the EIBFinancial capacity of the EIBReporting requirementsActivitiesAssess the ex-ante GHG emission of the projectsAssess if operations are in line with the RTOG, REM and the EIB standards, rules and proceduresDevelop and sign  operations outside the EUApply the allocation policy in terms of geographical/risk based allocationCoordinate and cooperate with the EU platform for blending in External CooperationReporting viaan established mechanismConnect with  other EU budget funds and with budgetary resources available under  other instruments and intermediary institutionsExpand the range of innovative financial instrumentsConsistency of the operationsfinanced with the beneficiary country’s own  strategyEnhanced coordination and cooperation with European and international financial institutions  
 
 
 
 
EQ8: Are there overlaps, realised or potential complementarities between the Programme and any other EU, MS 
and  IFI  actions  in  the  relevant  areas?  Could  the  coherence  and  synergies  of  the  Programme  with  other  EU 
and/or  MS  interventions  that  are  designed  to  contribute  to  the  EU  external  policy  objectives  be  further 
improved? What lessons can be learned from interaction between EIB under ELM and the blending facilities  - 
also in terms of complementarity? 

EQ9:  To  what  extent  are  the  desired  effects  achieved  at  a  reasonable  cost  in  comparison  to  other  similar 
organisations/Programmes?  What  aspects  of  the  Programme  are  the  most  efficient  or  inefficient,  especially  in 
terms  of  resources  that  are  mobilised  by  final  beneficiaries,  the  EIB  and  the  Commission  during  the  different 
phases of the project? 

EQ10:  What  is  the  added  value  of  the  Programme  for  beneficiaries  (ref.  EIB  performance  indicators,  incl. 
qualitative and quantitative effects) and in the selection of specific lending activities, how is the highest added 
value to beneficiaries ensured? 

EQ11: What is the volume of climate change lending against the target of 25% and what is the result of the new 
system to ex-ante assess greenhouse gas emission of projects supported by the EU guarantee? How does the EIB 
reinforce  the  climate  resilience  for  all  relevant  financing  operations,  and  integrate  carbon  pricing  in  economic 
cost benefit analysis? 

EQ12: What is the effectiveness of communication efforts of the EIB on the visibility of the EU, including at 
project level? 

4. Method 

4.1. Main phases of the mid-term review 

The evaluation work has been articulated in five phases: 

1. 

Inception phase (23/09/2015 – 14/01/2016). Tasks: 

  Literature review of relevant Commission documentation; 
  Construction of the intervention logic; 
  Analysis of the evaluation questions; 
  Elaboration of the detailed methodology work plan. 

2.  Data collection phase (04/12/2015 – 04/02/2016). Tasks: 

  Collection of the financial data, construction of the financial database; 
  Portfolio analysis; 
  Stakeholders mapping; 
  Workshop on ELM project life-cycle; 
  Preparation of the interviews and the case studies. 

3.  Diagnosis (04/02/2016 – 04/03/2016). Tasks: 

  Update of the portfolio analysis; 
  Stakeholder interviews; 
  Case studies; 
  Analytical summary. 

4.  Draft final report (04/03/2016 – 04/04/2016). Tasks: 
  Cross-analysis of the findings of the study; 

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  Drawing conclusions and recommendations. 

4.2. Methodological tools employed 

Financial database creation 

The task involved close cooperation between the evaluation team and the EIB staff to ensure that the evaluation 
team had possession of and understood all the data available relevant to the study. 

The primary step was the constitution of the database of financial operations of the EIB under the ELM for the 
years  2014-2015,  including,  where  possible,  foreseeable  upcoming  operations,  in  particular  those  awaiting 
signature. 

Since July 2014 (start of the mandate covering the period 2014-2020), 57 financing operations benefitting from 
the  EU  guarantee  have  been  launched  and  contracts  have  been  signed  by  the  EIB.  For  each  of  the  financing 
operations, the financial database comprises in particular: 

  The project title and description (purpose, region, sector, country, etc.); 
  Date of signature; 
  Appraisal time (in months); 
  The stakeholders under consideration (financial intermediaries and final beneficiaries); 
  The financial characteristics of the project (project cost, percentage of the EIB contribution, volume of 

funds disbursed so far); 

  The results of the risk assessment exercise; 
  The  climate  change  indicator  (Climate  Action  Indicator%  for  tracking  climate  change  mitigation  and 

adaptation); 

  Nature of the EU guarantee (Political risk vs. Comprehensive); 
  For  multi-beneficiary  loans:  number  of  final  beneficiaries  (specifying  the  financial  characteristics  of 

each of the loans provided by the financial intermediaries to the final beneficiaries); 

  For  the  framework  loans:  number  of  sub-projects  covered/in  the  pipeline  (specifying  the  financial 

characteristics of each of the sub-projects). 

Portfolio analysis 

The  EIB  provided  the  evaluation  team  with  the  data  for  the  57  financing  operations  signed  under  the  current 
ELM  from  July  2014  up  to  31  December  2015.  The  data  was  extracted  from  the  EIB  database  Serapis  with 
detailed information on each financing operation. 

From  that  database,  the  evaluation  team  performed  a  portfolio  analysis  of  the  57  financing  operations  in  the 
database.  That  analysis  provides  a  descriptive  and  analytical  overview  of  the  ongoing  status  of  the  ELM 
operations, including: 

  Regional distribution; 
  Country distribution; 
  Sector distribution; 
  EIB financing type; 
  Appraisal duration; 
  Coverage of the EU guarantee; 
  Project cost and EIB contribution per projects; 
  Disbursement; 
  Type of final beneficiaries; 
  Climate change indicators. 

That analsysis made it possible to draw a global snapshot of the portfolio and outline some findings and build 
hypotheses, which were addressed more in depth during the case studies. 

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Workshop on ELM projects lifecycle 

A  workshop  was  organised  with  the  EIB  to  present  some  of  the  key  elements  of  the  ELM:  project  lifecycle, 
project  monitoring,  the  economic  and  financial  assessment  of  project,  the  EU  call  for  guarantee  process,  the 
REM framework and a specific case study of the financial operation conducted in Armenia. 

Stakeholders mapping 

The  stakeholders  mapping  consisted  in  the  identification  of  the  various  stakeholders  involved  directly  and 
indirectly in the strategic orientation, the implementation, the reporting and the monitoring of the Programme as 
well  as  stakeholders  from  the  beneficiaries  side.  Their  role  and  interaction  were  defined  to  draw  an  overall 
picture  of  the  stakeholders’  interactions.  The  stakeholder  mapping  was  necessary  to  prepare  the  stakeholder 
interviews, ensuring that the evaluation team identified all the relevant stakeholders. 

Stakeholder interviews 

Interviews  were  conducted  with  a  set  of  relevant  stakeholders  identified  in  the  stakeholders  mapping. 
Stakeholders  are  the  officials  from  the  EIB  and  the  Commission,  country-level  government  officials,  officials 
working  in  international  financial  institutions  and  development  finance  institutions,  private  and  sovereign 
institutional investors, private sector financial intermediaries,   private  and  public  sector  final  beneficiaries  and  
NGOs,  in  particular  those  relevant  to  the  financial  sector  (including  Eurodad,  Counterbalance,  and  CEE 
Bankwatch). 

The  evaluation  team  used  a  semi-structured  interview  approach  that  provided  a  set  of  questions  to  be  tackled 
during  the  interview  while  allowing  the  interviewer  to  ask  follow-up  questions.  That  approach  enabled  the 
evaluation team to obtain the largest possible volume of information during each interview. 

Case studies 

The evaluation team selected 20 financing operations on the basis of specific criteria. Case studies selected were 
representative  in  terms  of  geographical  and  sectorial  coverage,  type  of  financial  instrument  used,  amount  of 
funding provided, objective of the operation and type of guarantee applicable. 

Case studies have been undertaken in several beneficiary States of the specific activities selected for an in-depth 
assessment  of  the  results  /  impacts  achieved  so  far,  as  well  as  the  perception  of  stakeholders.  The  evaluation 
team conducted an in-depth analysis for 20 financing operations by studying the documentation related to those 
projects.  That  documentation  set  the  background  of  the  financing  operation,  the  appraisal  procedure,  the 
contractual specificities and the modalities of the execution of the financing operation. That desk research was 
completed by interviews with relevant stakeholders. 

4.3 Limitations of the method used 

The framework of the evaluation of the External Lending Mandate (“the Programme”) includes:  

a) 

an evaluation of the EIB's external financing activities under EU guarantee.  

an assessment of the wider impact of the EIB's external lending in Programme regions, including in the 

b) 
context of the emerging post 2015 development finance framework. 

The overall approach for the study presents two main constraints: 

First, considering the short operating timeframe of the Programme, a small number of operations have already 
been signed (57) and an even smaller number of operations have already been disbursed (9), which reduces the 
explanatory power of the analysis. Any extrapolation to the whole population of operations (both running and 
upcoming under this ELM period), in particular, would be hazardous. Given that short timeframe, the evaluation 
approach is mainly qualitative, addressing the conditions for success. The judgment on the actual effectiveness, 
efficiency, coherence of the ELM is completed with an analysis of whether the conditions for the Programme to 
achieve its objectives are in place. The evaluation team applied that approach throughout the entire analysis of 
the  ELM  including  the  internal  functioning  of  the  ELM.  It  is  all  the  more  relevant  as  it  helps  to  draw 
recommendations for the improvement of the Programme. 

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Data availability is another issue, in particular as regards data at the final beneficiaries’ level. This is partly due 
to  the  short  operating  timeframe  of  certain  operations  or  the  way  they  are  structured,  in  particular  for  multi-
beneficiary  loan.  However,  at  the  Programme  level,  all  aggregated  financial  and  non-financial  data  have  been 
made available and allowed to produce the required analysis for this evaluation. 

5. Answer to the evaluation questions 

The  operational  approach  for  the  ELM  mid-term  evaluation  seeks  to  answer  the  evaluation  questions  by 
rephrasing and reordering them in a logical sequence that follows the intervention logic of the ELM operations. 

The design of the ELM  

Answer to EQ 1, EQ 2, and EQ 3:  

Regarding the alignment of the ELM with the EU external policy agenda, the analysis has been conducted on the 
reactivity to changes in EU external priorities, namely the Ukraine crisis, the "Arab spring", the support to the 
candidate and pre-candidate countries and the emerging issues. 

  The ELM operations are aligned with the three objectives defined in the Decision. The climate change 
objective  is    still  relevant  in  the  present  context  where  post-Paris  agreement  efforts  towards  climate 
change  mitigation  and  adaptation  objectives  and  pursuit  of  the  Sustainable  Development  Goals 
("SDGs") are contributing to a sustainable and inclusive growth; 

  ELM objectives are broadly aligned with the SDGs and are expected to contribute directly to a number 
of the SDGs, such as Clean water and sanitation, Affordable and clean energy, Industry, innovation and 
infrastructure,  Sustainable  cities  and  communities,  Climate  action  and  Decent  work  and  economic 
growth; 

  The ELM has supported the Union's external policy agenda, showing sufficient flexibility and reactivity 
to upcoming challenges. This is exemplified through the case of Ukraine (the Ukrainian crisis), Egypt 
and Morocco (“Arab spring”), Syria and the ongoing discussion over the  refugee crisis. This includes 
also alignment with climate objectives as they have been agreed in the Paris Agreement; 

  The ELM, above all, has been a tool contributing to the economic stabilisation in the countries hit by a 
political crisis. Its agenda has  been constrained by tough geopolitical challenges, which weigh on the 
regional ceilings and the future capacity of action under the ELM. 

According to the relevance and added value of the geographical distribution and regional ceilings, the conclusion 
was that in some of the regions (Asia; South Africa; Central Asia; Russia, Eastern Europe, South Caucasus), the 
amount committed (approved) after 1.5 years into the Mandate approaches the regional ceiling, which constrains 
the  future  operations  and  significantly  reduces  the  capacity  of  the  ELM  to  respond  to  potential  upcoming 
challenges  or  EU  priorities  in  the  future.  EIB  cooperation  with  Russia  is  restricted  because  of  the  restrictive 
measures  introduced  by  the  European  Union  in  the  context  of  the  Ukraine  conflict.  In  other  regions 
(Mediterranean  countries;  Latin  America,  Potential  candidate  and  candidate  countries),  the  EIB  delivers 
according to the regional ceilings. 

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Funds approved in each region as a% of the amount fixed by the ceiling for this region 

Concerning  the  relevance  of  the  allocation  policy,  specifically  in  the  choice  between  own-risk  financing  and 
financing  under  the  EU  guarantee,  the  conclusion  is  that  the  financing  operations  were  conducted  in  full 
compliance with the Allocation policy of the ELM. The own-risk lending and lending under the EU guarantee 
are  largely  non-rival:  the  ELM  is  used  in  most  cases  for  financing  operations  in  countries  with  a  speculative 
grade.  In  the  three  countries  with  an  investment  grade  (India,  Brazil  and  South  Africa)  where  the  ELM 
operations  have  been  conducted,  the  macroeconomic  environment  is  characterized  by  high  volatility  and 
uncertainty, which justifies the use of the EU guarantee. 

EIB solicitation possibilities of the EU Guarantee for lending outside the EU 

The management of the ELM 

Answer to questions EQ4, EQ 5, EQ 6, and EQ 7. 

With  regard  to  the  ELM  operations  lifecycle,  the  analysis  is  lead  through  all  the  steps,  namely  project 
origination, project appraisal, monitoring of the operations, management cost and reporting. 

  The project appraisal results in a comprehensive analysis of the project and provides the decision-maker 
with sufficient information for assessing the quality and the relevance of the latter. The project appraisal 
is compliant with the requirements of Article 9 of the Decision. 

  The EIB or the local stakeholders perceive the management cost induced by the ELM among the least 

heavy compared to the other international financial institutions. 

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  The reporting from the EIB to the Commission is compliant with Article 11 of the Decision and covers 
effectively  the  main  aspects  of  the  ELM.  However,  some  improvements  in  the  procedure  and 
coordination between the EIB and the Commission could further enhance the reporting system. 

On the assessment of the needs and the results, the REM is analysed, being the structured tool on which the EIB 
relies for estimating the financial needs, monitoring and reporting on the ongoing projects and for evaluating the 
results. 

Organisation of the Results Measurement Framework (REM) 

In conclusion, the REM indicators are considered to be well aligned with the operational objectives of the EIB in 
the framework of the ELM. The REM was developed based on an assessment of indicators and models existing 
among the IFIs. Therefore, it absorbed the existing best practices. 

Answer to questions EQ 8 and EQ9. 

Regarding the complementarity and coordination with other EU financing facilities and International Financial 
Institutions ('IFIs'), the conclusion are reached through the review of the blending ELM loans and grants with a 
particular concern on the pivotal role of the EU delegation and the coordination of the IFIs. 

  Complementarity  and  coordination  with  other  IFIs  are  strengthened  through  the  co-financing  of 
projects.  Coordination  occurs  for  the  identification  of  project  opportunities,  the  appraisal  of  those 
projects and the monitoring; 

  Cooperation  with  other  IFIs  allows  the  EIB  to  leverage  on  their  expertise  of  the  local  markets  where 

EIB has a limited presence, and to structure its own operations; 

  The role of the EU delegation has been crucial in several financing operations in sharing the knowledge 
of  the  local  context,  coordinating  with  other  IFIs  and  ensuring  a  connection  with  the  national 
governments of the beneficiary countries. 

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Blending mechanism ELM loans/grants 

The added value of the ELM  

Answer to question EQ 10. 

Concerning the added value of the ELM, several conclusions are reached through the analysis of the financing 
operations: 

  Without the ELM, the EIB would not have financed most of the projects under consideration (country 

 

profiles too risky for own-risk facilities). 
In several cases, the project could have been realized thanks to alternative sources of financing, mainly 
from the other IFIs, though not necessarily at the same extent. However, there is a probability that some 
of the projects would not have found financing in absence of the EIB as they face their own financial 
constraints. 

  The added value of the ELM financing operations is substantial compared to the commercial loans both 
in  terms  of  financial  advantage  (interest  rate  much  lower,  maturity  much  longer  than  on  any  regular 
commercial debt) and availability of funds. 

  There  is  a  clear  evidence  of  non-financial  benefits  for  the  final  beneficiaries  generated  by  the  EIB 
lending:  technical  assistance,  promotion  of  good  financial  standards  within  the  local  banking  sector, 
procurement standards. In addition to other IFIs, the EIB is supporting EU policies and promoting EU 
standards and principles. 

On the exchange rate risk, the existence of the FX risk is considered to drag on the demand for the ELM loans 
(in USD or in EUR) and partially offsets the financial added value of the ELM. 

12 

 
 
 
 
 
Climate change mitigation and adaptation  

Answer to question EQ 11. 

ELM  strategic  framework  as  regards  climate  action  has  been  analysed  with  the  use  of  specific  cases  and 
according to the ELM contribution to greenhouse gas (GHG) emissions reduction. 

The ELM largely contributes to the climate change-related objectives, especially in terms of mitigation. It largely 
exceeds the quantitative target of 25% and even the future target of 35%, as the climate change-related actions 
account for 39% of the total EIB contribution. The total emission savings of ELM projects over the second half 
of 2014 and 2015 is 1.35 Mt CO2-eq/year. 

The figure for the ELM covering the whole period July 2014-December 2015 is as follows: 

Total absolute emissions  
Total relative emissions 

1.44 Mt/CO2-eq/yr 
-1.35 Mt/CO2-eq/yr 

The communication and the ELM contribution to the visibility of the EU 

Answer to question EQ 12. 

Communication efforts to date have ensured the borrower is informed of the Union support. However, it does not 
ensure that the visibility of the Union is sufficiently enhanced at the final beneficiary level. Communication and 
visibility objective should be further promoted and supported within the ELM. 

6. Conclusion 

The conclusions are defined across five main themes: the design of the ELM, its management, added value, role 
in terms of climate-change mitigation and adaptation and contribution to the visibility of the Union. 

In addition, the conclusions on the Commission's better regulation criteria are as follows: 

-  On efficiency, the evaluation concluded that the external lending mandate provided sufficient flexibility to 
respond to crisis events thanks to sufficient margin in the regional and subregional ceilings in first years of 
implementation, though resulting in overusing the ceilings in some regions (Eastern Neighbourhood, Asia 
and Central Asia).   

-  On  effectiveness,  the  evaluation  concluded  that  the  financing  operations  are  well  aligned  with  Union 
priorities and objectives and that they followed the rules of the allocation policy – though investment grade 
countries benefitting from the EU guarantee being more questionable. 

-  On  relevance,  the  external  evaluation  wrote  that  the  three  overall  objectives  of  the  ELM  as  set  in  the 
Decision are still relevant in the present context. The climate change mitigation and adaptation objectives 
are  ever  more  relevant  after  the  post-Paris  agreement.  Private  sector  and  infrastructure  development 
objectives are drivers of the sustainable and inclusive growth and as such still relevant as key objectives of 
the  ELM.  Furthermore,  while  considering  the  criteria  of  the  Allocation  policy,  the  list  of  the  eligible 
countries  might be  subject  to  revision  –  removing  high  investment  grade  and high-income  countries  from 
the list. 

-  On coherence, the role of the EU Delegations has been crucial in several financing operations in sharing the 
knowledge  of  the  local  context,  coordinating  with  other  IFIs  and  ensuring  a  connection  with  the  national 
governments of the beneficiary countries. Furthermore, the blending frameworks enhanced complementarity 
and  coordination  with  other  IFIs,  further  strengthened  through  the  co-financing  of  projects.  Coordination 
occurs  for  the  identification  of  project  opportunities,  the  appraisal  of  those  projects  and  the  monitoring. 
Furthermore, cooperation with other IFIs allows the EIB to build on their expertise of the local markets. 

-  On added-value, please take note of below remarks in section 'The added value of the ELM'. 

13 

 
 
 
 
 
The design of the ELM  

All  the  operations  launched  under  the  ELM  since  its  inception  in  July  2014  are  fully  aligned  with  the  three 
objectives  stated  in  the  Decision.  Those  three  objectives  themselves  are  aligned  with  the  Sustainable 
Development Goals as defined by the United Nations. Moreover, the ELM has supported the Union's external 
policy  agenda,  showing  sufficient  flexibility  and  reactivity  to  the  geopolitical  challenges  as  demonstrated 
through the cases of Syria,  Ukraine (the Ukrainian crisis), Egypt and Morocco (“Arab spring”) and Jordan (the 
refugee crisis). The ELM has played a role in the economic and political stabilisation of these countries hit by a 
political  crisis.  As  a  result,  in  some  of  the  regions  (Asia;  South  Africa; Central  Asia;  Russia,  Eastern  Europe, 
South Caucasus), the volume of funds allocated so far represents up to 78% of the regional ceiling, which leaves 
limited leeway for responding to potential future challenges. EIB cooperation with Russia is restricted because of 
the restrictive measures introduced by the European Union in the context of the Ukraine conflict. Overall, the 
financing operations were conducted in full compliance with the Allocation policy of the ELM. Lending under 
the EIB own-risk and lending under the EU guarantee proved largely non-rival, as the EU guarantee has usually 
been  solicited for operations in  countries with  a  speculative grade. Even  though,  three  countries  (India,  Brazil 
and  South  Africa)  where  the  ELM  operations  have  been  conducted  had  an  investment  grade  at  the  date  of 
signature, their macroeconomic environment is highly unstable, which justifies the use of the EU guarantee. 

The management of the ELM 

The  management  of  the  ELM  by  the  EIB  has  been  compliant  with  the  requirements  of  the  Decision  and 
contributed  to  the  effective  use  of  the  EU  guarantee.  Indeed,  the  project  appraisal  results  in  a  comprehensive 
analysis of the project and provides the decision-maker with sufficient information for assessing the quality and 
the  relevance  of  the  latter.  Key  part  of  the  appraisal,  the  REM  framework  is  well  adapted  to  the  operational 
objectives  of  the  EIB  in  the  framework  of  the  ELM.  The  REM  was  developed  based  on  an  assessment  of 
indicators and models existing among the IFIs. Therefore, it absorbed the existing best practices. The reporting 
from the EIB to the Commission is compliant with the requirements of the Decision and covers effectively the 
main aspects of the ELM. However, some improvements in the procedure and coordination between the EIB and 
the EU could further enhance the reporting system. Overall, the EIB or the local stakeholders do not perceive the 
management cost induced by the ELM higher than the management cost of other comparable operations. 

Coordination  and  complementarity  with  other  stakeholder  such  as  the  EU  delegations,  other  IFIs  or  blending 
mechanisms has been crucial in several operations prospecting the beneficiaries, sharing the knowledge of the 
local context, coordinating and ensuring a connection with the national governments of the beneficiary countries. 
Some  rationalisation  of  the  blending  process  could  be  envisaged  in  order  to  address  urgent  needs  (e.g.  loans 
targeting refugee crisis-related issues). 

The added value of the ELM  

Without  the  EU  guarantee,  the  EIB  would  not  have  financed  most  of  the  projects  under  consideration,  as  the 
country profiles of the recipient countries are too risky for the EIB to carry out the lending using the own-risk 
facilities. In several cases – with important exceptions –, the project could technically have been realized in the 
absence of the EIB involvement, as the borrower may potentially have found an alternative source of financing, 
mainly from the other IFIs. However, the other IFIs face their own budget constraints and seek to diversify risks: 
thus in absence of the ELM, they would not have been able to fill the gap entirely. The added value of the ELM 
financing operations is substantial compared to private sector both in terms of the interest rate – much lower than 
the  local  commercial  interest  rates  –  and  longer  maturity.  Thus,  it  expands  greatly  the  access  to  funds  for  the 
local SMEs and Midcaps. Moreover, there is a clear evidence of non-financial benefits for the final beneficiaries 
generated  by  the  EIB  lending:  technical  assistance,  promotion  of  good  financial  standards  within  the  local 
banking sector, procurement standards. However, the existence of the FX risk drags on the demand for the ELM 
loans (in USD or in EUR) and partially offsets the financial added value of the ELM. 

Climate change mitigation and adaptation  

The  ELM  has  substantially  contributed  to  the  climate  change-related  objectives,  especially  in  terms  of 
mitigation. It exceeds the quantitative target of 25% and even the future target of 35% by 2020, as the climate 
change-related  actions  account  for  40%  of  the  total  EIB  contribution.  In  addition,  the  ELM  operations  have 

14 

 
 
allowed  saving  an  estimated  1.35  Mt  CO2-eq/year  of  GHG  emissions  through  the  operations  signed  between 
July 2014 and December 2015.  

The communication and the ELM contribution to the visibility of the EU 

The communication efforts allowed informing the borrower of the EU support. However, it does not ensure that 
the  visibility  of  the  EU  is  sufficiently  enhanced  at  the  final  beneficiary  level.  Communication  and  visibility 
objective should be further promoted and supported within the ELM.  

Criteria used to evaluate the need for an activation of the EUR 3 billion of the EU guarantee 

The results of this Mid-Term review are meant to be used to define the criteria for the potential extension of the 
EU guarantee by EUR 3 billion. In line with the scope of the evaluation, those criteria could be summarized as 
follows:  

Is the design of the ELM relevant from the point of view of the EU external policy objectives, that is, 
• 
would the  additional  funds  address relevant  needs?  The  conclusions of  the  Mid-Term  review  allow  answering 
positively to that criterion; 

• 
Is  the  current  management  of  the  ELM  by  the  EIB  sound,  that  is  would  the  Bank  be  able  to  use  the 
additional  funds  in  a  confident  and  efficient  manner?  The  conclusions  of  the  Mid-Term  review  point  that,  in 
spite of some minor inefficiencies, the overall management of the Mandate by the EIB is sound and in line with 
the existing best practices; 

To what extent do the ELM loans bring added value to the final beneficiaries, that is would additional 
• 
funds be expected to generate significant benefits – financial and non-financial – to the local stakeholders? The 
Mid-Term  review  clearly  points  out  that  the  ELM  operations  generate  high  added  value  for  the  final 
beneficiaries; 

Do the current regional ceilings and the overall envelope restrict the EIB activities in a way that could 
• 
be  detrimental  to  the  fulfilment  of  its  objectives?  The  answer  from  the  Mid-Term  review  is  contrasting 
depending  on  the  specific  regions:  in  some  of  them,  the  volume  of  lending  committed  is  proportionally  more 
significant, sometimes moving quite close to the actual regional ceiling defined in the Decision. 

---------------------------------------------------------------------------------------------------------------------------------- 

In light of the evaluation conclusions, the Commission considered the following changes in the mandate in order 
to achieve the specific policy and operational objectives:  

  Review of the eligible countries' list specified in Decision 466/2014/EU according to the country risk 

profile.  

High-income  countries  and  country  having  a  rating  well  above  the  criteria  defined  in  the  Allocation  Policy 
should be dropped from the list of eligible countries: Brunei, Iceland, Israel, Singapore, Chile, South Korea, as 
well as China's Special Administrative Regions (SAR) Hong Kong and Macao. 

  Better target the External Lending Mandate on the EU priorities in order to improve the response 

to external policy objectives:  

   A new horizontal high-level objective covering the response to the migration crisis should be 

introduced.  

   A reference to the Paris agreement adopted under the UN Framework Convention on Climate 
Change should be introduced and the target for climate action projects should be increased to 
35% of the total volume of EIB operations. A reinforcement of the EIB's mandate contribution 
to climate change adaptation should be required. 

   Reinforcement  of  the  added  value  of  EIB  operations  with  a  focus  of  the  lending  under  the 
ELM  on  higher  risk  profiles.  The  operations  under  the  ELM  could  be  restricted  to  countries 
with the credit rating corresponding to the speculative grade (below BBB- (S&P and Fitch) and 

15 

 
 
 
 
 
 
Baa3 (Moody’s). This could be done through a review of the allocation policy annexed to the 
Guarantee Agreement. 

   Activation  of  the  optional  additional  amount  of  EUR  3  billion:  This  optional  mandate  will 
increase  the  regional  ceilings  pro  rata,  including  the  EUR  1.4  billion  of  the  EIB  Resilience 
initiative (EIB's Building Block 2) for operations involving public counterparts.  
Increase of the overall ceiling by EUR 2.3 billion for EIB financing operations to private sector 
(EIB's  Building  Block  3)  applicable  to  projects  in  support  of  refugees  and/or  host-
communities.  In  this context,  and for  the said  amount,  the  coverage  of  the  EU  guarantee  for 
these  operations  should  be  extended  to  all  payments  due  to  the  EIB,  but  not  received  by  it 
(‘Comprehensive  Guarantee’),  rather  than  only  the  political  risk  guarantee  as  per  the  current 
decision.  The  risk  for  the  Union  budget  associated  to  EIB  financing  operations  under  the 
private  sector  lending  mandate  should  be  remunerated  and  revenues  thereof  paid  to  the 
Guarantee Fund for external actions. 
Introduce more flexibility by allowing the EIB to increase the re-allocation of funds between 
regions  and  sub-regions  in  the  course  of  the  mandate.  More  flexibility  is  needed  in  order  to 
enable  addressing  urgencies  that  might  arise  in  one  or  another  region  within  the  mandate 
period.  The  ceiling  for  reallocation  between  the  regions  by  the  EIB  in  the  course  of  the 
mandate  should  be  increased  from  10%  to  20%.  The  flexibility  scheme  should  apply  only 
where it concerns the need to address urgencies and crisis situations that might arise within the 
mandate period, and for which are recognised as high EU external policy priorities. The private 
sector mandate of EUR 2.3 billion and the amount of EUR 1.4 billion for projects addressing 
the migration crisis cannot be reallocated.  

   Enhance EIB support to SMEs from the Union (internationalisation of EU businesses). 
   EIB  mandate  direct  contribution  to  the  achievement  of  some  goals  of  the  SDGs  should  be 
underlined,  such  as  clean  water  and  sanitation,  affordable  and  clean  energy,  industry, 
innovation and infrastructure, sustainable cities and communities, climate action, decent work 
and economic growth. 

 

Improvement  of  the  communication  strategy  for  all  projects  at  country  level  to  reinforce  the 
impact of the ELM and Union visibility. 

Reinforcement of the cooperation between the EIB, the Commission and other entities of the 
EU  working  in  a  specific  country.  The  cooperation  could  include,  in  particular,  joint  visits 
from  Commission  and  EIB  to  the  countries,  joint  communication  strategies  between  the  EU 
delegation  and  EIB  local  offices,  joint  press  releases  putting  the  accent  on  the  Union 
involvement in the country. 

  Update of the Regional Technical Operational Guidelines. 

The  Regional  Technical  Operational  Guidelines  should  reflect  the  evolutions  of  the  Union's 
priorities  and  the  EIB's  alignment  with  them.  The  EEAS  should  continue  to  be  closely 
associated to the elaboration of the Regional Technical Operational Guidelines. 

 

Improvement of the reporting between the EIB and the Commission and new reporting 

Some improvements in the procedure and coordination between the EIB and the Commission 
could  further  enhance  the  reporting  system.  An  assessment  of  the  contribution  of  EIB 
financing operations in response to the migration crisis should be introduced in the context of 
the  EC  annual  Report  to  the  European  Parliament  and  to  the  Council  on  EIB  financing 
operations.  The  EIB  should  also  implement  and  develop  a  set  of  indicators  in  its  Results 
Measurement framework for projects in the public sector and in the private sector directed to 
refugees  and  host  communities;  in  the  context  of  the  Commission's  annual  reporting  to  the 
European Parliament and to the Council on EIB financing operations. 

16 

 
 
  
  
 
 
 
 
ANNEX 1 – Financial Database and Data Collection 

Financial Database 

The preliminary data provided by the EIB have been stored in an excel spreadsheet as illustrated below: 

Data collected for the evaluation 
The evaluation team collected project-specific documentation for each of the twenty case studies: PIN, appraisal report, contracts, REM reports, the financial data (interest 
rate of the loan, maturity, collateral, guarantee arrangement), reporting documents, documents on methods used by the EIB to ex-ante assess projects. 

The evaluation team also collected and analysed the following documents: 

  Legal framework (the Decision, the Guidelines, allocation policy, the Guarantee Agreement and the Recovery Agreement); 
  Strategic documentation (ELM Climate change strategy, various EU strategies as regards climate change, migration or external policies, etc.); 
  Past evaluation report on the ELM; 
  Project cycle guidelines from the EIB and presentation on REM framework, economic and financial analysis and monitoring; 
  Financial data on each of the 57 financing operations. 

17 

Operation numberContract numberOperation nameAvancement (gb)EU Guarantee limited to Political RisksMandate / FacilityFundsRegionCountrySector(s)First signature of the operationSignature within current ELM periodAppraisal duration (months)EIB financing type Project cost EUR  Approved (operation-level) EUR  Signed in EUR  Contract currency  Signed in contract currency Climate Change indicator (%)Climate Change mitigation indicator (%)Climate Change adaptation indicator (%) Disbursed as % of net signed Type of final beneficiaryCo-financing with other IFIsTA / grant component2014045985294NICARAGUA HYDRO DEVELOPMENT AND TRANSMISSIONFully SignedNoELM Latin America 2014-2020EIB own resourcesLatin AmericaNicaraguaEnergy29/12/201529/12/201511Investm. Loan1,090,445,860        145,586,897         146,092,038     USD160,000,000 85             100               0%Sovereign entityYes2010061382167CAIRO METRO LINE 3 (PHASE 3)Approv BoDNoELM MED 2014-2020EIB own resourcesMediterranean countriesEgyptTransport14/11/201229/12/201512Investm. Loan2,417,900,000        600,000,000         200,000,000     EUR200,000,000 100           100               0%Public sector entityYesYes2015047685055UKRAINE AGRI-FOOD APEX LOANFully SignedNoELM East-Ru. 2014-2020EIB own resourcesRussia, E.Europe,Sth. CaucasusUkraineCredit lines28/12/201528/12/20153Multi BI Loan800,000,000           400,000,000         400,000,000     EUR400,000,000 35             11                 24                 0%SMEs / MidCapsYes2015002284434AFFORESTATION AND EROSION CONTROL IIIFully SignedNoELM Pre-Accession 2014-EIB own resourcesCandidate countriesTurkeyAgriculture, fisheries, 28/12/201528/12/20159Investm. Loan330,816,000           120,000,000         120,000,000     EUR120,000,000 100           70                 30                 0%Sovereign entity2015002184433TUBITAK RESEARCH PROMOTION IIFully SignedNoELM Pre-Accession 2014-2020EIB own resourcesCandidate countriesTurkeyServices28/12/201528/12/20159Investm. Loan535,500,000           200,000,000         200,000,000     EUR200,000,000 3               3                   0%Public sector entity2015030884809MODERNISATION ROUTIERE IIFully SignedNoELM MED 2014-2020EIB own resourcesMediterranean countriesTunisiaTransport18/12/201518/12/20151Framewk loan342,900,000           150,000,000         150,000,000     EUR150,000,000 2               2                   0%Sovereign entityYes2015029484794ISTANBUL UNDERGROUND RAIL NETWORKApprov BoDNoELM Pre-Accession 2014-2020EIB own resourcesCandidate countriesTurkeyTransport18/12/201518/12/20154Investm. Loan1,400,000,000        350,000,000         295,000,000     EUR295,000,000 100           100               0%Regional or local authorities2014023283634ROUTE 10 RAIL REHABILITATIONApprov BoDNoELM Pre-Accession 2014-2020EIB own resourcesPotential candidate countriesKosovoTransport08/12/201508/12/201516Investm. Loan208,400,000           80,000,000           42,000,000       EUR42,000,000   100           100               0%Commercial companyYes2014053484869DAMANHOUR CCGT POWER PLANTFully SignedNoELM MED 2014-2020EIB own resourcesMediterranean countriesEgyptEnergy06/12/201506/12/20155Investm. Loan1,207,530,255        537,875,392         550,357,733     USD600,000,000 2               2                   0%Public sector entityYes2012040784944NEPAL GRID DEVELOPMENT PROGRAMMEFully SignedNoELM Asia 2014-2020EIB own resourcesAsia (excl. Central Asia)NepalEnergy03/12/201503/12/20158Investm. Loan65,159,212             30,000,000           30,000,000       EUR30,000,000   84             84                 0%Regional or local YesYes2013058783156VIENTIANE SUSTAINABLE URBAN TRANSPORTApprov BoDNoELM Asia 2014-2020EIB own resourcesAsia (excl. Central Asia)Lao People's Democratic Transport30/11/201530/11/201514Investm. Loan87,760,000             20,000,000           18,905,379       USD20,000,000   100           100               0%Regional or local YesYes 
 
 
 
 
ANNEX 2 – Set of Conclusions 

 

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Conclusion 1: the ELM operations are aligned with the three objectives defined in the Decision. The latter 
are  still  relevant  in  the  present  context  where  post-Paris  agreement  efforts  towards  climate  change 
mitigation  and  adaptation  objectives  and  pursuit  of  the  SDGs  are  contributing  to  a  sustainable  and 
inclusive growth. 
Conclusion 2: ELM objectives are broadly aligned with the SDGs and are expected to contribute directly 
to a number of the SDGs. 
Conclusion 3: the ELM has supported the EU external policy agenda, showing sufficient flexibility and 
reactivity to upcoming challenges. This is exemplified through the case of Ukraine (the Ukrainian crisis), 
Egypt  and  Morocco  (“Arab  spring”),  Syria  and  the  ongoing  discussion  over  the  refugee  crisis.  This 
includes also alignment with climate objectives as they have been agreed in the Paris Agreement. 
Conclusion  4:  the  ELM,  above  all,  has  been  a  tool  contributing  to  the  economic  stabilisation  in  the 
countries hit by a political crisis. Its agenda has been constrained by tough geopolitical challenges, which 
weigh on the regional ceilings and the future capacity of action under the ELM. 
Conclusion 5: in some of the regions (Asia; South Africa; Central Asia; Russia, Eastern Europe, South 
Caucasus),  the  amount  committed  (approved)  after  1.5  years  into  the  Mandate  approaches  the  regional 
ceiling,  which  constrains  the  future  operations  and  significantly  reduces  the  capacity  of  the  ELM  to 
respond to potential upcoming challenges or EU priorities in the future. 
Conclusion  6:  in  other  regions  (Mediterranean  countries;  Latin  America,  Potential  candidate  and 
candidate countries), the EIB delivers according to the regional ceilings. 
Conclusion 7: the financing operations were conducted in full compliance with the Allocation policy of 
the ELM. 
Conclusion 8: the own-risk lending and lending under the EU guarantee are largely non-rival: the ELM is 
used in most cases for financing operations in countries with a speculative grade. 
Conclusion 9: in the three countries with an investment grade (India, Brazil and South Africa) where the 
ELM operations have been conducted, the macroeconomic environment is characterized by high volatility 
and uncertainty, which justifies the use of the EU guarantee. 
Conclusion 10: the project appraisal results in a comprehensive analysis of the project and provides the 
decision-maker with sufficient information for assessing the quality and the relevance of the latter. The 
project appraisal is compliant with the requirements of Article 9 of the Decision. 
Conclusion  11:  the  EIB  or  the  local  stakeholders  perceive  the  management  cost  induced  by  the  ELM 
among the least heavy compared to the other international financial institutions’. 
Conclusion  12:  the  reporting  from  the  EIB  to  the  Commission  is  compliant  with  Article  11  of  the 
Decision  and  covers  effectively  the  main  aspects  of  the  ELM.  However,  some  improvements  in  the 
procedure  and  coordination  between  the  EIB  and  the  Commission  could  further  enhance  the  reporting 
system. 
Conclusion  13:  the  REM  indicators  are  well  aligned  with  the  operational  objectives  of  the  EIB  in  the 
framework of the ELM. 
Conclusion 14: the REM was developed based on an assessment of indicators and models existing among 
the IFIs. Therefore, it absorbed the existing best practices. 
Conclusion  15:  complementarity  and  coordination  with  other  IFI  are  strengthened  through  the  co-
financing of projects. Coordination occurs for the identification of project opportunities, the appraisal of 
those projects and the monitoring. 
Conclusion  16:  cooperation  with  other  IFIs  allows  the  EIB  to  leverage  on  their  expertise  of  the  local 
markets where EIB has a limited presence, and to structure its own operations. 
Conclusion 17: the role of the EU delegation has been crucial in several financing operations in sharing 
the  knowledge  of  the  local  context,  coordinating  with  other  IFIs  and  ensuring  a  connection  with  the 
national governments of the beneficiary countries. 

18 

 
 
 
 

 

 

 

 

 

 

Conclusion  18:  without  the  ELM,  the  EIB  would  not  have  financed  most  of  the  projects  under 
consideration (country profiles too risky for own-risk facilities). 
Conclusion  19:  in  several  cases,  the  project  could  have  been  realized  thanks  to  alternative  sources  of 
financing,  mainly  from  the  other  IFIs,  though  not  necessarily  at  the  same  extent.  However,  there  is  a 
probability that some of the projects would not have found financing in absence of the EIB (it is unlikely 
that the other IFI would have covered the entirety of the corresponding EUR 27 billion gap) as they face 
their own financial constraints. 
Conclusion  20:  the  added  value  of  the  ELM  financing  operations  is  substantial  compared  to  the 
commercial loans both in terms of financial advantage (interest rate much lower, maturity much longer 
than on any regular commercial debt) and availability of funds. 
Conclusion 21: there is a clear evidence of non-financial benefits for the final beneficiaries generated by 
the  EIB  lending:  technical  assistance,  promotion  of  good  financial  standards  within  the  local  banking 
sector, procurement standards. In addition to other IFIs, the EIB is acting as the EU bank, applying EU 
policies and promoting EU standards and principles. 
Conclusion 22: the existence of the FX risk drags on the demand for the ELM loans (in USD or in EUR) 
and partially offsets the financial added value of the ELM. 
Conclusion 23: the ELM largely contributes to the climate change-related objectives, especially in terms 
of mitigation. It largely exceeds the quantitative target of 25% and even the future target of 35%, as the 
climate change-related actions account for 39% of the total EIB contribution . The total emission savings 
of ELM projects over the second half of 2014 and 2015 is 1.35 Mt CO2-eq/year. 
Conclusion  24:  Communication  efforts  to  date  have  ensured  the  borrower  is  informed  of  the  Union 
support. However, it does not ensure that the visibility of the Union is sufficiently enhanced at the final 
beneficiary  level.  Communication  and  visibility  objective  should  be  further  promoted  and  supported 
within the ELM. 

19