REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON 2015 EIB EXTERNAL ACTIVITY WITH EU BUDGETARY GUARANTEE
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, development aid, institutional cooperation, investment abroad, investment protection, private sector

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 14.9.2016  COM(2016) 585 final   REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON 2015 EIB EXTERNAL ACTIVITY WITH EU BUDGETARY GUARANTEE {SWD(2016) 296 final}  
 
 
INTRODUCTION 

1. 
Decision 466/2014/EU1 of the European Parliament and of the Council of 16 April 2014 grant 
an EU guarantee to the European Investment Bank (EIB) against losses under EIB financing 
operations  for  projects  outside  the  Union  over  the  period  2014-2020  (the  “Decision”  or  the 
"EU guarantee”). That Decision requires the Commission to report annually on EIB external 
activities  with  the  EU  budgetary  guarantee,  building  on  yearly  reports  provided  by  EIB. 
Following  the  adoption  of  the  Decision  466/2014/EU  over  2014-2020,  the  present  report 
covering the year 2015 has been prepared on the requirements of that legal basis. This report 
also  provides  a  summary  of  the  own  risk  operations  carried  out  by  the  EIB  in  2015  in  the 
regions covered by the Decision. The EIB operations in Africa, Caribbean and Pacific (ACP) 
as  well  as  in  Overseas  Countries  and  Territories  (OCT)  are  covered  in  a  separate  annual 
report. 

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

More detailed information  and statistical tables on the above activities, including at  project, 
sector, country and regional level, are provided in the attached Staff Working Document (the 
“SWD”).  Following  the  fourth  year  of  implementation  of  the  EIB  Results  Measurement 
(ReM)  framework,  this  report  provides  information  on  expected  results  based  on  EIB 
financing operations signed in 2015.  

2. 

KEY RESULTS 

In  2015,  the  EIB  signed  a  total  of  EUR  6.7  billion  in  the  regions  covered  by  the  External 
Lending Mandate (ELM) which is almost equal to the signatures of the previous year (EUR 
6.8 billion). Of this, almost three quarters (72%, EUR 4.8 billion)  was carried out under the 
ELM  with  an  EU  guarantee,  an  increase  of  16%  compared  to  2014.  The  share  of  the  loans 
benefiting  from  an  EU  comprehensive  guarantee  covering  sovereign  or  sub-sovereign 
operations  was  EUR  4.4  billion  (92%),  while  EUR  0.4  billion  (8%)  benefitted  from  an  EU 
political  risk  guarantee  for  private  sector  operations.  The  financing  under  EIB  own-risk 
facilities  decreased  by  EUR  0.7  billion  to  EUR  1.9  billion.  Overall  volumes  in  2015  were 
mainly driven by a strong performance in the Eastern Neighbours, Russia and Asia and Latin 
America regions. 

The  EIB  continued  to  demonstrate  its  commitment  to  supporting  the  Union's  climate  action 
agenda.  In  September  2015,  the  EIB  Board  adapted  a  Climate  Action  Strategy  to  guide  all 
EIB actions both within and outside the Union. EIB operations signed in the regions covered 
by the Decision remain well above the threshold of 25% set out in the Decision. By the end of 
2015, the cumulative climate action ratio under the mandate period of 2014-2020 had reached 

1 

OJ L 135, 08.05.2014, p.1 

2 

 
 
                                                            
35%. EUR 2.1 billion was lent in 2015, in ELM regions, in Climate Action. Asia is a major 
contributor to that target, as climate action has been defined as the key priority for that region. 

Moreover, in 2015, 32% of the total amount of operations signed in ELM Regions, or EUR 
2.2 billion will support the cross-cutting regional integration objective, a transversal objective 
of  the  ELM,  through  energy  interconnections,  transport  links,  regional  equity  funds  and 
support to convergence through local private sector development.  

In  2015,  when  it  was  implemented  for  the  fourth  year  in  a  row,  the  EIB  through  the  ReM 
framework noted that 100% of new operations signed in the Mandate regions are expected to 
make  either  an  excellent  or  a  good  contribution  to  the  Mandate  objectives.  Around  88%  of 
new  projects  are  expected  to  achieve  either  excellent  or  good  results  in  terms  of  expected 
impact, quality and soundness of projects. More than 80% of new projects are expected to be 
associated with either high or significant EIB additionality. The EIB's own report on results of 
EIB operations outside the Union (which also includes operations in ACP and OCT countries) 
in 2015 will soon be published on its website. 

The Decision emphasises a strong alignment of EIB external activity and the Union's external 
policies, programmes and instruments and it is worth noting that over the year 2015, the EIB 
continued  to  cooperate  closely  with  the  Commission  and  the  EEAS  to  strengthen  the 
consistency  and  coherence  of  EIB  actions  with  external  Union  policies.  In  that  context,  the 
Commission, together with the EIB and in consultation with the EEAS, updated the Regional 
Technical  Operational  Guidelines  ("RTOGs")  which  were  transmitted  to  the  Parliament  and 
the  Council  in  May  2015.    The  RTOGs  are  applicable  over  the  period  2014-2020  for  EIB 
operations under the EU guarantee. The RTOGs provide guidance for aligning  the scope  of 
the  EIB’s  interventions  in  different  regions  with  the  Union's  policies,  programmes  and 
instruments.  

3. 

FINANCING OPERATIONS 

3.1. 

OVERVIEW OF EIB FINANCING OPERATIONS SIGNED IN 2015 AS PER 
CONTRIBUTION TO Union POLICY OBJECTIVES  

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

Local  private  sector  development,  in  particular  support  to  small  and  medium-sized 

(i) 
enterprises ('SMEs'), 

(ii) 

Development of social and economic infrastructure, 

(iii)  Climate change mitigation and adaptation. 

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

Of the total signed amount in the ELM regions in 2015, 40% (EUR 2.7 billion) will support 
local private sector development, principally through improving access to finance for SMEs, 
microenterprises and mid-cap companies. 60% (EUR 4.0 billion) will contribute to social and 

3 

 
 
economic  infrastructure  development.  All  EIB  operations  outside  the  Union  support  one  or 
both of those objectives. As such the climate change mitigation and adaptation objective can 
be considered as cross-cutting objective. 

32% of lending (EUR 2.1 billion) will support the cross-cutting objective of climate change 
mitigation and adaptation.  

Similarly,  32%,  or  EUR  2.2  billion,  will  support  the  cross-cutting  regional  integration 
objective, both through infrastructure development and through support of local private sector 
access to finance. 

The contribution to the Mandate's objectives is reflected in Chart 1 taking into account both 
the 2015 operations under the Mandate and under the own-risk facilities. 

Chart 1: Contribution to mandate objectives (% and amount contribution)

The  rest  of  the  section  reports  expected  and  achieved  results  on  EU  policies  objectives,  as 
recorded by the ReM framework. The scope of that section with regard to expected results is 
not  all  contracts  signed  in  2015,  but  all  projects  for  which  the  first  financing  contract  was 
signed in 2015 (they are referred to as “new projects”). That approach avoids double counting 
of results for projects with multiple financing contracts signed in successive years. It means 
that  lending  volumes  referred  to  in  that  section  are  the  total  approved  volumes  for  new 
projects  only.  Furthermore,  because  of  the  methodology  used  lending  volumes  and  project 
counts may not always be strictly comparable. 

Local private sector development, in particular support to SMEs 

The EIB's support under local private sector development is about creating the conditions to 
allow  people  in  developing  and  emerging  markets  to  develop  and  expand  businesses  and 
thereby create jobs, fulfil needs for goods and services, overcome poverty and food insecurity 
and  raise  living  standards.  Ultimately,  sustainable  social  and  economic  development  cannot 
take  place  without  that  private  sector  development.  That  support  takes  different  forms: 

4 

 
 
 
 
 
 
extending  credit  lines  to  local  financial  intermediaries  (mainly  banks)  for  on-lending  to 
SMEs;  participation  in  private  equity  funds  and  risk  capital  to  high-growth  potential 
companies; equity finance for microfinance providers; and direct loans to larger companies. 

Twenty-six  new  projects  signed  in  2015  will  support  local  private  sector  development.  The 
total  approved  EIB  financing  for  those  projects  is  EUR  2.9  billion.  20  are  credit  lines 
supporting  SMEs;  1  supports  microfinance  activities  through  a  microfinance  investment 
vehicle; and 5 support R&D activities and investment projects by large companies. 

Development of social and economic infrastructure 

Developing social and economic infrastructure – everything from roads and energy systems to 
healthcare facilities and broadband internet services – is one of the pillars of the development 
process.  It  is  also  a  pillar  where  public  financing  is  often  vital,  infrastructure  goods  often 
being public goods that have large positive spill-overs for the economy, the environment and 
for human well-being. The EIB supports infrastructure projects in a wide range of sectors. 

There  are  29  new  projects  that  contribute  to  the  development  of  social  and  economic 
infrastructure  in  the  ELM  regions  in  2015.  The  total  approved  EIB  financing  for  those 
projects is EUR 3.9 billion.  

The  EIB  signed  contracts  for  11  new  projects  in  the  energy  sector  in  2015,  of  which  5  are 
focused  on  expanding  and  upgrading  power  transmission  and  distribution  networks.  Those 
projects  will  connect  an  additional  273  300  households  to  the  grid.  Electricity  transmission 
projects  also  meet  domestic  demand  by  enhancing  the  capacity  of  existing  networks  to 
integrate electricity generation from renewable energy sources such as wind and hydropower. 
5 projects in 2015 focus on energy generation, three of them on the development of renewable 
sources  of  energy.  Together  they  will  generate  sufficient  electricity  to  supply  2.45  million 
people  in  the  countries  concerned.  In  one  case,  the  EIB  is  taking  over  the  risk  from 
hydropower, transmission system and energy efficiency projects initiated by the World Bank 
in the Ukraine. That step will free-up World Bank lending capacity to help Ukraine finance 
energy imports in the shorter term to avoid the occurrence of a severe energy crisis. 

The  EIB  signed  6  new  projects  in  the  transport  sector.  They  include  developing  inter-urban 
rail  links,  new  urban  transport  systems  and  improving  road  transport  by  upgrading  road 
surface.  

In  the  water  and  sanitation  sector  4  projects  have  been  signed  in  2015.  Together  they  will 
improve  the  access  to  or  the  supply  of  safe  drinking  water  to  some  1.6  million  households. 
That improved access can be expected to have very significant knock-on impacts in countries 
where  poor water supply is  a major  cause of disease, as  well as posing significant  financial 
and time burdens on low income households. 

A single project in the solid waste management sector will make an important contribution to 
managing the environmental impacts of waste disposal. 

There are two projects signed under the framework of agriculture and forestry. The one under 
forestry will support reforestation over 80 000 ha of degraded land and forest rehabilitation on 
20 000ha and erosion control measures on a further 155 000ha. 

Detailed information on financed projects are provided in the SWD. 

5 

 
 
Climate change mitigation and adaptation 

As both the cause and effects of climate change are global, extending and expanding climate 
finance  beyond  the  borders  of  the  Union  is  a  vital  part  of  the  Union's  external  and 
development policy. The EIB plays a central role in those efforts. Its support to climate action 
remained high in 2015, with total signatures of EUR 2 billion, representing more than 30% of 
all signatures in the Mandate regions. That level is similar to the previous year’s figure and is 
well  above  the  EIB’s  global  target  of  25%  of  overall  lending2.  Therefore,  the  Mandate 
contributes significantly to climate change objectives, with a strong focus on climate change 
mitigation operations with 92% of the EIB's operations and 8% on climate change adaptation. 

The vast majority of climate action lending continues to come from projects in the transport 
and energy sectors which together account for 68% of new climate action lending outside the 
Union in 2015. The agriculture and forestry sector also continues to play an important role.  

New  climate  action  projects  in  2015  include  six  transport  sector  projects.  It  includes,  inter 
alia, constructing metro lines and establishing urban mass tranit systems.  

Eight new energy sector projects in 2015 will contribute to mitigation of climate change, as 
will  a  number  of  multi-sector  projects  with  a  component  focused  on  renewable  energy 
generation. 

Investment  in  agriculture  and  forestry  can  play  a  critical  role,  not  just  in  mitigating  climate 
change through carbon sequestration, but also in enhancing the resilience of food production 
systems to changing climatic patterns. The afforestion project contributes not only to climate 
change  mitigation  through  carbon  sequestration  but  also  to  adaptation  to  climate  change 
impacts  by  focusing  on  erosion  control.  That  latter  dimension  of  climate  lending  is  often 
neglected  due  to  the  lack  of  appetite  in  borrowing  for  adaptation  as  well  as  the  limited 
attractiveness that that sector has for private sector investors. However, recognising that the 
regions covered by the Decision are particularly vulnerable to current climate variability and 
to  future  climate  change,  the  EIB  is  increasing  the  integration  of  climate  resilience  into 
projects. It includes supporting technical assistance and appropriate planning measures as well 
as supporting specific adaptation investments such as flood control and defence measures.  

The  EIB's  effort  in  mainstreaming  climate  action  includes  the  Carbon  Footprint  Exercise 
which estimates and reports the grenhouse gas emissions from its projects. In 2015, 23 of the 
projects  in  the  ELM  regions  were  included  in  the  2015  Carbon  Footprint  Exercise.  They 
represent  total  EIB  signatures  or  allocation  approvals  of  EUR  2.7  billion.  The  related  total 
absolute GHG emissions are estimated as 1.4Mt CO2-eq/year (the low absolute figures being 
due  to  a  large  number  of  forestry  projects  which  will  sequester  CO2)  with  saved/avoided 
emissions estimated at 1.3Mt CO2-eq/year overall from the same financing. 

Both the ELM Climate Strategy and the EIB’s recently approved Climate Strategy emphasize 
the  promotion  of  risk  management  approaches  to  increase  the  resilience  of  assets, 
communities and ecosystems related to EIB projects. The EIB is developing a Climate Risk 
and  Vulnerability  Assessment  tool  kit  across  sectors  and  regions  to  identify  and  address 

2 Article 3(7) of Decision 466/2014/EU requires that over 2014-2020, climate change mitigation and adaptation 

projects shall represent at least 25% of total EIB financing operations by volume. 

6 

 
 
 
 
 
 
 
                                                            
project  vulnerabilities.  It  will  allow  the  EIB  to  identify  priorities  and  support  adaptation 
actions in its financing. The EIB has committed to the European Parliament that the Bank is 
systematically screening of all new ELM (and ACP) operations against their climate risks at 
pre-appraisal stage in order to address project vulnerabilities. The system is still under final 
development  but  by  2017  a  fully  integrated  system  is  planned  to  be  in  place.  In  2015,  all 
projects  under  ELM  were  subject  to  that  screening.  The  bulk  of  the  projects  received  a 
medium- to high risk classification. 

Regional integration 

In  2015,  the  EIB  signed  a  total  of  16  financing  contracts  worth  EUR  2.3  billion  (EUR  1.6 
billion  in  2014)  contributing  to  regional  integration.  Nine  credit  lines  (EUR  1  255  million) 
will support regional integration mainly in the Pre-Accession region by fostering international 
collaboration  and  by  supporting  the  convergence  of  economies  towards  the  Union.  In  the 
transport sector, the three projects signed aim at facilitating the mobility across borders (EUR 
524  million).  The  other  4  projects  signed  in  2015  under  regional  integration  are  from  the 
agriculture, water, energy and solid waste sectors.  

3.2. 
BY THE DECISION3 

OVERVIEW OF EIB FINANCING VOLUME IN THE REGIONS COVERED 

Table 1 provides an overview of the volume of EIB financing in 2015 in the regions covered 
by the Decisions.  

Table 1: EIB Financing Operations signed in 2015 

Countries of 
operation 

(EUR million) 

Pre-Accession 
Countries 

Mediterranean 
countries 

Eastern Neighb., 
Russia 

Asia and Latin 
America 

South Africa 

Total 

Operations under EU guarantee 

Comprehensive 
guarantee 

Political 
risk cover 

Total 

EIB own 
risk 
operations 

Total 

957 

1211 

1426 

821 

50 

4465 

0 

65 

55 

150 

100 

370 

957 

1565 

2522 

1276 

141 

1417 

1481 

971 

150 

4835 

0 

150 

0 

1856 

1481 

1121 

150 

6691 

Notes: In addition to the above volumes on EIB own resources, one investment into microfinance fund   
amounting to EUR 2 million was signed on third party resources in the Mediterranean. 

The  share  of  activity  under  the  EU  guarantee  in  total  volume  increased  in  2015  by  16%  to 
reach EUR 4.8 billion (EUR 4.2 billion in 2014) or 72% of total 2015 financing in the regions 
covered by the Decision. The share of activity at EIB own risk decreased by 28% (EUR 1.9 
billion). Around 92% of operations financed at EIB own risk during 2015 have been signed in 

3  

Decision 466/2014/EU 

7 

 
 
 
 
 
                                                            
Pre-Accession and in ALA countries, with the remaining 8% in the Mediterranean region. In 
Eastern Neighbourhood and South Africa, all financing was signed under the EU guarantee.  

In 2015, 92% of the loans signed with the EU guarantee were covered by a Comprehensive 
Guarantee (EUR 4.5 billion), which is used for sovereign and sub-sovereign operations, while 
8% benefited from the political risk cover (EUR 0.4 billion) for private sector operations.  

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

EUR million 

Pre-Accession 

Mediterranean 

Eastern Neighbours, Russia   

Asia and Latin America 

South Africa   

Total in Mandate Regions   

Ceiling 

Net signed (EUR 
million) 

Net signed as % of 
mandate ceiling 

8.739 

9.606 

4.831 

3.407 

416 

27.000 

1157 

1656 

2571 

1386 

             150    

6920 

13% 

17% 

53% 

41% 

36% 

26% 

As  presented  in  Table  2,  after  1.5  years  of  financing  activities  under  the  2014-2020  ELM 
(21%  of  implementation  time  elapsed)  cumulative  signatures  under  the  ELM  reached  EUR 
6.9 billion, corresponding to a utilisation rate of 26% (up from 8% at the end of 2014). The 
utilisation rate in the Eastern Neighbours, Russia region exceeds 50%, followed by Asia and 
Latin America and South Africa with 41% and 36% respectively. 

Defaults on interest payments and loan repayments from the Syrian Government continued in 
2015. At the end of 2015, cumulative payments from the Guarantee Fund related to calls by 
the  EIB  amounted  to  a  total  of  EUR  202.89  million,  of  which  EUR  60.16  million  paid  in 
2015. 

8 

 
 
 
 9.000

 8.000

 7.000

 6.000

 5.000

 4.000

 3.000

 2.000

  67% 

 1.000

 -

Chart 2: Annual evolution of EIB lending volumes on EIB own resources 

7.639 

7.828 

6.495 

6.506 

6.768 

6.691 

7.051 

5.567 

5.542 

78% 

73% 

63% 

61% 

 63%  

 62% 

72% 

47% 

2007

2008

2009

2010

2011

2012

2013

2014

2015

Mandate

EIB own risk Facilities

Total

Chart  2  illustrates  the  evolution  of  lending  under  the  Mandate  and  the  own-risk  facilities 
between 2007 and 2015. Over the whole period, an average of 65% of EIB financing in those 
regions benefits from the Mandate with EU Guarantee, with annual fluctuations between 47% 
and 78%.  

In  terms  of  number  of  projects,  financing  for  38  projects  was  signed  in  2015  under  the  EU 
Guarantee (42 in 2013) and 16 projects under EIB own risk (23 projects signed in 2014).  

Table 3: Number of operations signed by region (all resources), in 2015 

Regions 

Pre-Accession 

Mediterranean4 

Eastern Neighbours, Russia 

Asia and Latin America 

South Africa 

Total 

Third Party 
Resources 

Under EU 
guarantee   

EIB  
own-risk 

Total 

0 

1 

0 

0 

0 

1 

7 

10 

9 

11 

1 

38 

14 

1 

0 

1 

0 

16 

21 

12 

9 

12 

1 

55 

As  shown  in  Table  4,  the  Pre-Accession  countries  remained  the  main  beneficiary  region  of 
EIB financing outside the  Union in  2015 with  EUR 2.5 billion signed, representing 38%  of 
total  financing  in  the  regions  concerned.  A  major  focus  for  the  region  has  been  to  ensure 
adequate  financial  support  for  innovation  and  for  growth,  particularly  of  SMEs  and  private 

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

9 

 
 
 
 
 
                                                            
sector lending. Under the Mandate, a key priority has also been to finance projects integrating 
more fully with European infrastructure networks. 

In the Mediterranean countries, the amount signed reached EUR 1.4 billion. The majority of 
that  amount  was  for  projects  focused  on  providing  support  to  build  social  and  economic 
infrastructure, especially energy projects (53%) and transportation (25%). A total of 12% was 
allocated under credit lines to banks for on-lending to SMEs. 

In  the  Eastern  Neighbourhood,  signatures  totalled  EUR  1.5  billion,  representing  the  highest 
increase  from  2014  (+26%)  among  all  Mandate  regions,  even  in  the  context  of  Union 
sanctions  on  Russia.  Notably  in  relation  to  the  Ukraine  Action  Plan,  EUR  1.3  billion  was 
signed,  including  a  first-time  signature  of  a  guarantee  transaction  (almost  EUR  0.5  billion, 
covering  International  Bank  for  Reconstruction  and  Development  investment  projects  in 
Ukraine) benefiting from the EU comprehensive guarantee. 

In  Asia,  Central  Asia  and  Latin  America,  total  signatures  decreased  by  18%  from  2014, 
totalling  EUR  1.1  billion.  Latin  America  accounted  for  55%  of  the  amount  signed,  with 
special focus on infrastructure and private sector financing in Brazil and Nicaragua. 

In South Africa, three loans, totalling EUR 150 million, were signed to finance private sector 
credit lines to banks for on-lending to SMEs. 

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

EUR m 

Pre-
Accession 

Medi-
terranean 
countries 
175 
758 
350 

125 

2 
10 

- 

- 

- 

Eastern 
Neighbours, 
Russia 

Asia and 
Latin 
America 

South 
Africa 

Total 

505 
477 
151 

260 

- 
- 

- 

48 

40 

250 
545 
233 

93 

- 
- 

- 

- 

- 

150 
- 
- 

- 

- 
- 

- 

- 

- 

2,510 
1,819 
1,296 

500 

202 
145 

120 

61 

40 

1,430 
40 
562 

23 

200 
135 

120 

13 

- 

2,522 

1,419 

1,481 

1,121 

150 

6,693 

Credit lines 
Energy 
Transport 
Water, 
sewerage 
Industry 
Services 
Agriculture, 
fisheries, 
forestry 
Solid waste 
Urban 
development 
Grand Total 

3.3. 

IMPACT AND VALUE ADDED OF EIB OPERATIONS 

The ReM framework provides an assessment of the EIB financing operations throughout their 
lifecycle.  It  helps  to  select  sound  projects  which  are  in  line  with  Union  priorities  based  on 
concrete  results,  and  where  the  EIB  involvement  will  add  value.  At  appraisal  stage,  results 
indicators  are  identified,  with  baselines  and  targets  that  capture  expected  economic,  social, 

10 

 
 
 
and  environmental  outcomes  of  the  operation.  Achievement  against  those  specified 
performance benchmarks is monitored throughout the project's life and reported at two major 
milestones: at project completion and 3 years after project completion ("post completion") for 
direct operations; at the end of the investment period and at the end of life of private equity 
funds; and at the end of the allocation period for intermediated lending. 

Projects are rated according to three "Pillars": 

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

(i) 
eligibility under EIB mandate objectives. 

(ii) 

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

(iii) 

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

The  results  of  the  ReM  Project  Completion  Reviews  along  with  a  case  study  of  the  first 
infrastructure project reaching completion are summarised in the SWD. The expected results 
are presented in this section and discussed for EIB financing operations signed in 2015 in the 
regions covered by the Mandate. In order to avoid double counting of projects and expected 
results, this 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 2015 – 49 new projects. 

Chart 3: ReM ratings by pillar for 2015 new signed operations 

In  terms  of  strength  of  contribution  to  objectives  (ReM  Pillar  1),  33%  of  the  2015  new 
signatures were rated as “excellent”, meaning a high contribution to both the countries' own 
development  objectives  and  the  Union's  priorities  for  the  country  and/or  region  concerned. 
67% of the operations rated “good” under Pillar 1. Those projects that are expected to make a 
"good" contribution are in line with mandate objectives and could make a high contribution to 
either  the  country's  own  development  objectives  or  those  of  the  Union  and  a  moderate 
contribution to the other. 

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

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operations,  the  rating  is  based  on  the  expected  results,  weighted  by  risk  considerations  as 
measured by the soundness of the intermediary and the quality of the operating environment.  

Pillar 2 shows that only one new operation signed is expected to make an excellent rating with 
an  economic  rate  of  return  (ERR)  greater  than  15%.  More  than  85%  of  new  operations  are 
expected to be "good". They are direct operations with an average ERR of 10% to 15% in the 
case  of  infrastructure  projects,  or  intermediated  operations  which  contribute  to  increasing 
access to  finance  and  financial  sector  development  yet  in  a  high  risk environment  with  less 
likelihood of results. Six projects received an “acceptable” rating, primarily because of high 
risk environments that affect the probability of achieving planned results. 

Additionality” (ReM Pillar 3) is measured by the difference between the EIB contribution to 
an  investment  project  and  standard  market  finance,  in  three  dimensions:  the  adequacy  of 
financial resources for the needs of projects; the EIB’s technical contribution; and the impact 
in terms of raising standards and facilitating contributions from other sources.  

In a large majority of the 49 new projects in 2015, the “additionality” of EIB support is rated 
“significant” (33), or “high” (7). 9 received a “moderate” rating. The degree of additionality 
tends to be higher for complex projects in less developed regions, where the needs of project 
promoters  are  greatest,  and  less  pronounced  where  the  EIB  deals  with  very  experienced 
promoters  and  intermediaries.  For  that  reason,  the  most  projects  with  a  “high”  additionality 
rating were in the Eastern neighbours and Mediterranean regions, while the additionality of 5 
projects in the Pre-accession region was rated only “moderate”. 

The ability of the EIB to provide long-term funding that is often otherwise unavailable is one 
of the key elements of the Bank’s contribution. Nearly all new operations in 2015 provide a 
tenor  to  project  promoters  or  financial  intermediaries  which  exceeds  the  typical  maturity 
available in local markets. In most cases, the terms of EIB finance provide a close match to 
the economic life of the assets to be financed. The tenor provided for new projects in 2015 – 
around  15  years  on  average  –  is  estimated  to  be,  on  average,  around  two  and  a  half  times 
greater that available in the local market. 

For  selected  operations,  the  EIB  can  use  different  mechanisms  in  order  to  absorb  foreign 
exchange  risk.  This  can  make  funding  more  attractive  for  borrowers,  including  the  final 
beneficiaries of intermediated operations whose activities are focussed on domestic markets. 
Within the ELM regions, three credit lines benefited from local currency funding. 

The EIB works to mobilise and manage grants from third parties alongside its loans. They are 
a significant source of additionality, particularly in the Mediterranean countries, as well as in 
the Eastern Neighbourhood. Twelve new projects benefitted from grants in 2015. 

The EIB's role proved to be prominent also in terms of raising standards, mobilising resources 
and technical contribution.  

4. 

EIB COOPERATION WITH OTHERS 

4.1 COOPERATION WITH THE COMMISSION  

The Mandate requests that the Commission, the EEAS and the EIB cooperate and strengthen 
the alignment of EIB external actions and the Union's external policy objectives, with a view 
to  maximising  synergies  between  EIB  financing  and  Union  budgetary  resources,  mainly 

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through  a  regular  and  systematic  dialogue  and  early  consultation  on  policies,  strategies  and 
project pipelines. In 2015, the Memorandum of Understanding (revised in 2013) between the 
Commission,  EEAS  and  the  EIB  in  respect  of  cooperation  and  coordination  in  the  regions 
covered  by  the  Mandate  continues  to  be  applied  –  e.g.  through  exchange  of  information  on 
project pipeline and contact information.  

Blending mechanisms result in strong co-financing relations with other International Financial 
Institutions ('IFIs') and alignment with Union policies and priorities in each respective country 
context  in  order  to  maximise  the  intended  impact  financed  by  Union  grants.  Moreover,  the 
governance  structure  of  those  facilities  enables  and  requires  close  coordination  and 
cooperation  with  the  Commission,  the  EEAS  and  other  IFIs  before  presenting  a  project  for 
blending of grant resources with EIB lending. The EIB continued to actively participate in the 
regional  blending  mechanisms  in  2015.  EUR  197  million  of  Union  budget-funded 
contributions  (grants, 
technical  assistance,  risk  capital)  were  approved  or  signed, 
complementing EIB financing in ELM regions (EUR 108 million of Union budget resources 
complementing EIB loans in the Neighbourhood Investment Facility, EUR 62 million in the 
Western  Balkan  Investment  Facility,  EUR  10  million  in  the  Latin  America  Investment 
Facility  and  EUR  2  million  in  the  Investment  Facility  for  Central  Asia).  The  EIB  closely 
cooperated  with  the  Commission  in  the  technical  group  of  experts  of  the  EU  Platform  for 
Blending in External Cooperation (EUBEC). The detailed list of EIB-managed Union budget-
funded operations (TA, Grants, Equity) signed or approved in 2015 can be found in the SWD. 

In January 2016, the Commission adopted a new Anti-Tax Avoidance Package, containing a 
series of initiatives for a stronger and more coordinated EU stance against corporate tax abuse 
–  within  the  Single  Market  and  beyond.  The  package  further  expands  on  the  criteria  that 
constitute  good  tax  governance,  including  measures  on  the  fight  against  aggressive  tax 
planning.  That  Package  reflects  discussions  in  the  Council,  the  recommendations  from  the 
European Parliament as well as the outcomes of the OECD's Base Erosion and Profit Shifting 
project.  In  that  context,  and  in  line  with  the  EIB  Group's  extensive  expertise  and  leading 
position  in  promoting  best  practices  on  tax  transparency  and  effective  taxation,  the 
Commission is actively engaging with the EIB on how the Bank's Non-Compliant Jurisdiction 
policy could evolve to reflect those new anti-tax avoidance measures. 

The detailed aspects of the inter-institutional cooperation between the EIB, the Commission 
and  the  EEAS  to  support the  priorities  both  of  the  Union and  the  partner  countries  in  those 
regions can be found in the SWD. 

4.2. COOPERATION WITH EUROPEAN OMBUDSMAN 

The Memorandum of Understanding signed between the EIB and the European Ombudsman 
in  2008  sets  the  basis  for  the  two  stages  of  the  EIB  Complaints  Mechanism  -  the  internal 
(EIB-CM)  and  the  external  (the  Ombudsman)  -  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 Union, including the External 
Mandates, the 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 Union; 

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The  scope  of  the  Ombudsman's  review,  with  the  recognition  of  the  EIB-CM  as  the 

• 
required prior approach. 

During  2015,  the  Ombudsman  received  no  complaints  related  to  the  EIB  activities  in  the 
External  Lending  Region.  However,  and  following  the  critical  remark  made  by  the 
Ombudsman to the Bank in 2014 concerning the handling of the procurement process of the 
Corridor  V  c)  project  in  Bosnia  and  Herzegovina,  the  Bank  carried  out  an  audit  of  its 
monitoring of its procurement operations in 2015. 

4.3. COOPERATION WITH INTERNATIONAL FINANCING INSTITUTIONS  

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

In 2015, the EIB continued working with other Multilateral Development Banks on the post 
2015 Development Agenda and particularly on developing a common approach to roles with 
respect  to  Financing  for  Development.  The  key  international  events  were  the  Third 
International Conference on Financing for Development (Addis), the UN Summit (New York) 
and  the  UN  Framework  Convention  on  Climate  Change  Conference  of  the  Parties  in  Paris 
(COP  21).  In  that  context,  the  EIB  has  intensified  its  cooperation  with  other  Multilateral 
Development  Banks  and  has  notably  co-authored  several  important  reports  with  the 
Multilateral Development  Banks (MDBs) and the IMF. In  particular, the joint  report “From 
billions  to  trillions:  MDB  contributions  to  financing  for  development”,  which  was  issued 
ahead of the Addis Conference in July 2015 had a significant impact in drawing attention both 
to the joint and individual achievements of MDBs and to the considerable scaling up that is 
needed. 

The  EIB  has  had  the  responsibility  in  2015  of  chairing  the  MDB  working  group  of  the  G7 
Deauville  Partnership  for  which  the  President  of  the  EIB  reported  to  the  G7  Ministerial 
meeting at the WB-IMF Annual Meetings. 

In 2015, the EIB has pursued its cooperation with the G20 through regular participation in and 
contribution to the G20 Infrastructure Investment Working Group (IIWG). The EIB has also 
strengthened its ties with the UN System, with new Memoranda of Understanding signed with 
two institutions, IFAD and UNIDO. The EIB has continued to contribute to the work of the 
OECD  Development  Assistance  Committee  (DAC)  on  the  modernisation  of  Official 
Development Assistance (ODA). 

The  EIB  has  also  continued  to  cooperate  throughout  2015  with  MDBs  and  other  IFIs  and 
relevent groups in order to harmonise climate finance tracking and impact reporting standards. 

Under  the  Mandate,  approximately  41%  of  signatures  were  co-financed  with  other  IFIs  and 
31%  of  operations  signed  in  2015  were  associated  with  a  grant  component  from  the  Union 
budget. The detailed list of EIB operations co-financed with other IFIs in 2015 can be found 
in the SWD. 

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