COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON 2016 EIB EXTERNAL ACTIVITY WITH EU BUDGETARY GUARANTEE
Date: 2017-12-15
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EIB loan, adaptation to climate change, credit guarantee, development aid, financial aid, financial management, institutional cooperation, investment abroad, investment protection, third country

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 15.12.2017  SWD(2017) 460 final  COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON 2016 EIB EXTERNAL ACTIVITY WITH EU BUDGETARY GUARANTEE {COM(2017) 767 final}  
 
 
1. 

INTRODUCTION AND OVERVIEW 

This Staff Working Document ("SWD") reviews the implementation of the current European 
Investment  Bank  ("EIB")  external  mandate  at  project,  sector,  country  and  regional  levels  in 
2016  as  well  as  the  contribution  of  EIB  financing  operations  to  the  fulfilment  of  external 
policy  objectives,  taking  into  account  the  operational  objectives  of  the  EIB.  Article  11(2)  of 
Decision  466/2014/EU  of  the  European  Parliament  and  of  the  Council  of  16  April  2014 
provides  that  for  the  purposes  of  the  Commission's  reporting,  the  EIB  shall  provide  the 
Commission with yearly reports on EIB financing operations carried out under that Decision 
including  all  necessary  elements  allowing  the  Commission  to  report.  Therefore,  facts  and 
figures mentioned in the document are mainly based on information provided by the EIB. 

2 

EIB CORPORATE RESPONSIBILITY 

Corporate  Social  Responsibility  is  an  important  part  of  EIB  strategy,  policies  and  activities. 
The  EIB  continues  to  reaffirm  its  commitment  to  Environmental,  Social  and  Governance 
(ESG) standards throughout its financing operations as well as its internal activities including 
through  its  sustainability  and  environmental  reporting.  For  instance,  the  EIB  Group  2016 
sustainability  report  will  be  published  in  accordance  with  the  GRI  Standards  comprehensive 
option in line with best practice. 

The  EIB  Group’s  commitment  to  measure  and  manage  its  footprint  is  consistent  with  its 
environmental  and  social  policies,  principles  and  standards  for  the  projects  it  finances. 
Understanding its carbon footprint also allows the EIB to identify and implement measures to 
reduce emissions resulting from its internal activities. The EIB Group carbon footprint report 
prepared in accordance with the GHG Protocol Corporate standard provides a comprehensive 
picture of the GHG emissions resulting from its internal activities and provides the appropriate 
environmental  indicators  required  by  the  GRI  content  index  in  respect  of  the  sustainability 
report.   

The  EIB  promotes  EU  policies  through  its  financial  and  other  support  of  sustainable 
investment projects. The growing importance given to environmental and social considerations 
is underlined through regular review and revision of its environmental and social requirements 
and operational practices throughout the Bank reflected in its priority lending objectives. 

The environmental and social policies, principles and standards of the Bank derive from and 
reflect the  evolving  EU  approach  towards  the  promotion  of  environmental  sustainability  and 
social  well-being,  in  the  broader  context  of  sustainable  development.  They  are  developed, 
maintained and disseminated by the Bank’s Environment Climate & Social Office, ECSO. In 
particular  human 
rights,  gender,  conflict  sensitivity,  biodiversity  and  ecosystems 
considerations as well as climate change standards are integrated into the lending policies and 
practices of the Bank.  

2.1  Human rights 

The  EIB  is  legally  bound  to  the  provisions  of  the  Charter  of  Fundamental  Rights  of  the 
European  Union,  including  the  commitment  to  upholding  human  rights.  Human  rights 
considerations feature also in the EIB Statement of Environmental and Social  Principles and 
Standards  which  provides  that  the EIB  “restricts  its  financing  to  projects  that  respect  human 

1 

 
 
 
rights”. This is achieved partly by excluding specific types of projects or activities from EIB 
lending, and partly by comprehensive due diligence processes. 

The Bank’s Environmental and Social Standards, revised and effective since 1st January 2014, 
further advanced the Bank’s commitment by effectively integrating human rights in their scope 
and by promoting human-rights-responsive due diligence processes. They draw guidance from 
the  EU  Charter  for  Fundamental  Rights,  the  EU  Strategic  Framework  and  Action  Plan  on 
Human  Rights  and  Democracy  (2012),  the  UN  Guiding  Principles  for  Business  and  Human 
Rights (2011), the Renewed EU Strategy 2011-2014 for Corporate Social Responsibility and 
the  OECD  Guidelines  for  Multinational  Enterprises  (2008),  as  well  as  from  the  evolution  of 
best practice in this domain.  

2.2  Gender 

Gender  equality  is  firmly  established  as  a  core  value  and  objective  of  EU  development 
cooperation  and  external  action.  It  leads  to  more  just,  fair  and  prosperous  societies.  It 
contributes to faster economic growth, higher income per capita, more efficient and effective 
businesses, more sustainable management of natural resources, social cohesion, peace-building 
and, overall, more stable societies.  

Understanding  the  significant  costs  generated  by  discrimination,  the  barriers  to  full 
participation  in  the  economy  and  how  best  to  harness  women  and  men’s  potential  is 
fundamental  to  contributing  to  ELM  key  objectives,  including:  local  private  sector 
development,  social  and  economic  infrastructure  and  climate  change  mitigation  and 
adaptation. Recent events, such as the migration and refugee crises in the Western Balkans and 
Southern Neighbourhood, have inherent gender dimensions. These have highlighted the need 
to invest in women’s economic empowerment as a viable strategy for building more resilient 
economies. 

The EIB has committed to supporting the achievement of SDG 5; to “achieve gender equality 
and empower all women and girls” by 2030. The EIB Group Strategy on Gender Equality and 
Women’s  Empowerment  was  endorsed  in  December  2016.  It  concentrates  on  three  priority 
areas:  

  The  protection  of  women’s  rights  through  the  application  of  the  Bank’s  social 
standards  and  in  the  requirements  of  its  clients  and  promoters.  A  mandatory  and 
systematic  assessment  of  gender-related  risks  and  the  protection  of  the  rights  of 
women,  men,  girls  and  boys  will  be  an  integral  part  of  the  application  of  the  EIB 
Environmental and Social Standards. This will seek to highlight the vulnerabilities and 
risks that are gender and/or age specific and to identify ways to effectively mitigate or 
remedy against them.  

 

Increasing  their  operations’  positive  impact  on  gender  equality,  by  working  with 
willing  and  interested  project  promoters  to  incorporate  a  gender  perspective  into  the 
design, implementation and operation of projects.  

  Working with clients actively investing in women’s economic empowerment, such as 
efforts to increase access to employment (e.g. through investment in the care economy) 
and to credit/financial services, as well as support for female entrepreneurship.  

2.3 

Conflict sensitivity 

2 

 
 
Conflict weakens democracy, human rights and the rule of law, which are core values of the 
European Union (EU). The Lisbon Treaty directs the EU to “preserve peace, prevent conflicts 
and strengthen international security.”   

Insecurity is also a primary development challenge. One and a half billion people live in areas 
affected by fragility, conflict or  very high  levels of criminal  violence.   Conflict and fragility 
have multiple, long and short term impacts on development, both in the countries experiencing 
it and on its neighbours, as clearly illustrated by the recent refugee and migrant crisis. Indeed, 
migration and conflict are tightly intertwined, with mass displacement often being a result, and 
at times a trigger, of conflict.  

Adopting a conflict sensitive approach is of relevance for EIB operations. Violent conflicts and 
fragility  carry  substantial  operational,  financial,  security  and  reputational  risks  for  EIB-
financed projects.  

In  2015,  EIB  developed  an  institutional  approach  to  conflict  sensitivity  with  the  aim  to 
improve  the  understanding  of  potential  interaction  of  EIB  lending  and  violent  conflict  and 
provide guidance on how to make EIB activities more conflict sensitive. The EIB’s approach 
to conflict sensitivity seeks to contribute to systematic: (i) flagging and mitigating institutional 
risks  to  EIB  and  specific  operational  risks  to  EIB  investments  in  targeted  conflict  affected 
situations;  (ii)  avoiding  doing  harm  or  aggravating  conflict,  and  (iii)  whenever  possible  and 
depending  on  context,  seeking  to  indirectly  contribute  to  conflict  prevention,  recovery  and 
peacebuilding  efforts  through  its  project  investments.  The  approach  is  aligned  with  relevant 
EU policies as well as international good practice.  

The developed approach was progressively piloted in 2016 and will be refined further in 2017. 
The EIB's intention  is  to selectively integrate the conflict  sensitive approach in relevant EIB 
operations  keeping  in  mind  that  for  the  EIB,  given  its  current  portfolio  allocation,  this  will 
concern  a  small  number  of  operations  every  year,  predominantly  non-EU.  While  most 
additional  analysis  and  expertise  will  be  obtained  through  cooperation  with  other  EU 
institutions, some of it will require further strengthening of EIB in-house expertise and access 
to external expertise on context, sector or issues specific needs.  

2.4 

Biodiversity 

In line with its EU and international commitments and its own standards and requirement on 
biodiversity,  the  EIB  is  in  the  process  of  developing  a  comprehensive  and  mainstreamed 
approach, system and processes to biodiversity risk screening and management. 

Together  with  its  Multilateral  Development  Bank  (MDB)  peers,  the  EIB  has  committed  to 
track biodiversity-related financing in their operations and to publish the first related report by 
end of 2018. EIB is coordinating the work with the other MDBs and in consultation with its 
peers and the OECD, is currently working to develop and apply a methodology for reporting 
and  tracking  biodiversity-related  lending.  The  methodology  being  developed  will  look 
specifically at lessons learned and in particular at the definition of climate adaptation financing 
and tracking. EIB is also part of a working group led by the OECD DAC ENVIRONET Task 
team, looking at refining the biodiversity and anti-desertification Rio marker definitions. 

3 

 
 
 
 
EIB has also been working with its Micro Financial Institutions (MFI) peers, the Cross-Sector 
Biodiversity  Initiative,  NGOs  and  IGOs  on  developing  good  practice  guidelines  for 
biodiversity baseline studies and biodiversity-inclusive impact assessment and management.  

2.5 

Climate change 

The  EIB  Climate  Standards  require  that  the  EIB's  financing  as  a  whole  is  aligned  with  EU 
climate policy. Specifically, and as outlined in its global 2015 Climate Strategy, the EIB has 
committed to: 

  Making  its  lending  portfolio  more  climate-friendly  by  promoting  climate  change 
mitigation  projects  in  various  sectors  and  promoting  the  adoption  of  energy  efficient 
solutions in the projects financed. 

  Mainstreaming  climate  risk  considerations  generally  into  the  project  cycle  and 
promoting adaptation projects or projects with adaptation components and measures, in 
the interests of long term sustainability. 

  Assessing and reporting the carbon footprint of EIB financed investment projects, the 
annual  aggregate  GHG  emissions  and  savings  published  in  the  EIB’s  Annual  Report 
for each year’s finance contract signatures. 
Including  Climate  Action  in  the  Key  Performance  Indicators  for  the  Corporate 
Operational Plan with currently an annual percentage target for lending of > 25% based 
on  a  consistent  set  of  definitions  regarding  climate  action  investments  and  activities, 
harmonised with other MDBs. 

 

  Reflecting  the  value  of  carbon  –  both  financial  and  economic  –  in  its  financing 

 

decision-making requirements and processes. 
Increasing  transparency  and  accountability,  advocacy  and  working  with  other 
institutions,  including  MFIs,  Banks  and  Financial  Institutions  (BFIs)  (“mutual 
reliance”), NGOs, the European Commission and the academic community on climate-
related matters: in particular adapting standards, polices and reporting to align with the 
Paris Agreement, wherein it is agreed that “finance flows should be consistent with a 
pathway towards low greenhouse gas emissions and climate-resilient development”. 

2.6 

Transparency, governance and accountability 

2.6.1 EIB Group Transparency Policy 
On 6 March 2015, the EIB Group adopted a new EIB Group Transparency Policy1 following a 
public  consultation2  process  to  which  civil  society  organisations,  EU  and  international 
institutions, the private sector, consultants, academia and members of the public participated. 

Compared to the previous one, the new policy brings improvements to its structure and clarity. 
It has been further aligned with applicable EU legislation, as interpreted by the case law of the 
Court of Justice of the European Union regarding transparency and access to information. As 
with  the  previous  EIB  Transparency  Policy,  the  new  policy  continues  to  apply  the 

1 http://www.eib.org/infocentre/publications/all/eib-group-transparency-policy.htm 
2 http://www.eib.org/about/partners/cso/consultations/item/public-consultation-on-eibs-transparency-policy-2014.htm 

4 

 
 
 
 
 
 
                                                            
“presumption  of  disclosure”  principle  to  all  information  held  by  the  EIB,  with  well-defined 
exceptions  based  on  applicable  EU  legislation  and  case-law.  The  Bank  publishes  an  annual 
report on the implementation of its Transparency Policy. 

2.6.2 International Aid Transparency Initiative ("IATI") 

The EIB has continued to regularly publish data and information on its operations outside the 
EU based on the IATI reporting standard. The EIB updates its IATI data on a monthly basis 
and remains among the top publishers in terms of the frequency and timeliness of publication.  

2.6.3 Transparency and monitoring of investment projects  

Projects financed by the EIB are published on its website at least three weeks before they are 
considered for approval by the EIB Board of Directors. On 2 January 2014, the EIB officially 
launched its Environmental Public Register of documents,3 which has been established under 
the  EC  Regulation  1367/2006  regarding  public  access  to  environmental  information  of 
Community  institutions  and  bodies.  The  Register  contains  key  project-related  environmental 
and social information/documents held by the Bank such as the Environmental and Social Data 
Sheets (ESDS) of all concerned projects approved since 2012, including those financed under 
the  ELM,  and  is  continuously  updated.  All  documents  are  linked  with  the  corresponding 
project summaries to put them into context. 

The EIB monitors the projects it finances throughout their life cycle, with financial monitoring 
from the loan signature through the project implementation and operation phase until the end 
of  the  contractual  relation  with  the  project,  i.e.  final  repayment.  Physical  monitoring  of  the 
project  continues  after  completion,  to  follow  up  on  results  and  outcomes  after  one  year  and 
then after three  further years  of operation. If deemed necessary, the physical  monitoring can 
continue for longer. When projects financed under the new ELM reach completion, the EIB is 
preparing  to  make,  where  possible,  relevant  Project  Completion  Reports  (PCRs)  available  to 
the  public,  excluding  confidential  information.  In  addition,  monitoring  information  provided 
by project promoters is also being made publicly available when promoters agree. Finally, the 
EIB  has  started  publishing  on  the  Public  Register  so-called  Environmental  and  Social 
Completion  Sheets  (ESCS) 
the  Bank’s  assessment  of  project-related 
environmental and social aspects at project completion stage for all the investment projects it 
finances, including those financed under the ELM. 

that  provide 

2.7 

Compliance 

Compliance is integral to the Bank’s professional and business approach. The independent EIB 
Compliance function promotes high standards of integrity and ensures that they are applied to 
all  of  the  Bank’s  activities,  as  outlined  in  their  integrity  policy  and  compliance  charter.  The 
Bank adheres to the Basel Committee on Banking Supervision’s definition of compliance risk 
as “risk of legal or regulatory sanctions, material financial loss, or loss to reputation” to which 
an EIB Group member may be exposed, arising from a failure to comply with applicable laws, 
rules and regulations. Reputational and compliance risk as well as mitigation of such risk are 
critical for the EIB.  

3 http://www.eib.org/register 

5 

 
 
 
 
                                                            
The  EIB  Group  is  committed  to  high  standards  of  anti-money  laundering  (AML)  and 
combating  the  financing  of  terrorism  (CFT)  in  line  with  the  principles  and  standards  of 
applicable  EU  legislation,  best  banking  practices  and  applicable  market  standards  including, 
where relevant, other international financial institutions’ standards. 

A comprehensive EIB Group AML-CFT Framework, approved on 15 July 2014 was revised 
on 12 October 2016 and the updated version is published on the EIB website. It contains key 
principles regulating AML-CFT and related integrity aspects in EIB Group activities and is in 
line with the principles of relevant EU legislation as amended and supplemented from time to 
time . The EIB Group AML-CFT Framework aims at preventing the EIB Group, its governing 
bodies,  staff  and  counterparties  from  being  associated  with  or  used  for  money  laundering, 
financing of terrorism or other criminal activities. 

The  EIB  is  committed  that  its  policies  and  procedures  avoid  the  misuse  of  EIB  Group 
operations for purposes of tax fraud, tax evasion, tax avoidance, aggressive tax planning and 
harmful tax practices have to be updated to take account of best standards and practices as well 
as the recent evolution of EU policies. Having regard to the above, the EIB has reviewed and 
further  enhanced  its  due  diligence  processes  with  the  aim  that  the  risk-based  tax  assessment 
identifies  potential  tax  avoidance  schemes  in  line  with  the  OECD  Base  Erosion  and  Profit 
Shifting  action  plan  (BEPS)  and  EU  Anti-Tax  Avoidance  Package  (ATAP).  This  addresses 
considerations  raised  by  EIB  stakeholders,  including  the  EIB  Board  of  Directors,  European 
Commission, European Parliament and Civil Society Organisations. Further developments will 
be  needed  to  draw  the  consequences  of  the  publication  of  the  EU  list  of  non-cooperative 
jurisdictions for tax purposes once agreed by the Council. 

In  terms  of  monitoring,  the  Compliance  function  deals  with  the  on-going  monitoring  of 
compliance  risk  in  operations/  business  relationship  to  detect  possible  ML,  FT  or  related 
integrity risks throughout the life of the business relationship. In line with EIB Group AML-
CFT  Framework  and  the  applicable  standards  and  principles  of  the  4th  AML  Directive,  the 
compliance  monitoring  plan  includes  on-going  monitoring  not  only  of  counterparties  with 
which  the  EIB  enters  into  business  relationship,  but  also,  where  applicable,  their  beneficial 
owners,  key  persons  and  shareholders.  On-going  monitoring  activities  also  include  sanctions 
screening,  monitoring  of  Politically  Exposed  Persons  and  alerts  on  adverse  media,  or 
monitoring of transactions via Compliance clearance for certain types of payments. 

In  addition  to  Compliance  of  operations,  the  Compliance  function  also  strongly  supports  a 
corporate culture based on ethical values and professional conduct for its staff and governing 
bodies.  

3. 

OVERALL CONTRIBUTION TO UNION POLICY OBJECTIVES 

The  objective  of  EIB  operations  under  the  Mandate  is  to  support  relevant  external  policy 
objectives of the Union. In particular, Decision 466/2014/EU maintains specific policy goals to 
be addressed through EIB external operations in all regions covered by the Union budgetary 
guarantee:  

(i) 

local private sector development,  

(ii) 

social and economic infrastructure development,  

6 

 
 
(iii) 

climate change mitigation and adaptation,  

Additional  underlying  objectives  include  the  contribution  to  the  general  principles  guiding 
Union external action, as referred to in Article 21 TEU and regional integration among partner 
countries,  including  economic  integration  between  pre-accession  countries,  neighbourhood 
countries and the Union (Article 3(3) of Decision 466/2014/EU). The EIB is required to also 
undertake  financing  operations  in  eligible  countries  within  areas  covered  by  the  general 
objectives by supporting foreign direct investments that promote economic integration with the 
Union. 

The ELM Mid-Term Review proposed to introduce a new general objective on migration into 
theELM.  The  reporting  on  this  new  objective  will  take  place  once  the  corresponding 
amendment has been adopted. 

Chart 1: Contribution to Mandate objectives of EIB financing operations (all resources) on ELM 
Regions (% and amount contribution) 

d
e
n
g
i
s

t
n
u
o
m
a

l

a
t
o
t

f
o
%

60%

50%

40%

30%

20%

10%

0%

 3.383  

 3.457  

% of total amount signed

 1.921  

 1.824  

 4.500

 4.000

 3.500

 3.000

 2.500

 2.000

 1.500

 1.000

 500

 -

)

m
R
U
E
(
n
o
i
t
u
b
i
r
t
n
o
c

t
n
u
o
m
A

Local private sector
development

Econ & Social
Infrastructure

Climate Action

Regional
Integration

Note: A single project may contribute to more than one Mandate objective. The objectives on Climate Change and Regional 
Integration  are  cross  cutting  objectives  applying  to  all  projects  and  therefore  cannot  be  added  to  the  two  others.  Signature 
volume  for  Local  private  sector  development  and  Economic  &  Social  infrastructure  can  be  added  to  give  total  signatures 
volume. 

7 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comment  on  chart  1:  Of  the  total  signed  amount  in  the  ELM  regions  in  2016,  EUR  3.4  bn 
(49%) will support local private sector development, principally through improving access to 
finance  for  small  and  medium-sized  enterprises  (SMEs),  microenterprises  and  mid-cap 
companies  (35  projects).  EUR  3.4  bn  (51%)  will  contribute  to  social  and  economic 
infrastructure  development  (43  projects).  All  EIB  operations  outside  the  EU  support  one  or 
both  of  these  objectives.  As  such  the  climate  change  mitigation  and  adaptation  objective, 
although a primary objective of the ELM, is tracked and reported as cross-cutting objective. 

EUR 1.9 bn (28%) of lending signed in 2016 will support the cross-cutting objective of climate 
change  mitigation  and  adaptation.  This  support  is  spread  over  a  large  number  of  individual 
projects  this  year  (50),  taking  into  account  the  contribution  to  this  objective  made  by  many 
operations  that  are  focused  on  multiple  sectors  (for  example,  credit  lines  where  a  small 
proportion  of  lending  is  estimated  to  support  investments  in  renewable  energy  or  energy 
efficiency measures by SMEs).  

Similarly, EUR 1.8 bn (27%), will support the cross-cutting regional integration objective (21 
projects), both through infrastructure development and through support of local private sector 
access to finance. 

3.1. 

Local private sector development, in particular support to SMEs  

3.1.1. EIB's SME support framework 

The  2030  Development  Agenda  cannot  be  achieved  without  the  growth  of  a  vibrant  private 
sector to provide decent employment and incomes to the majority of people in our societies, 
and to provide many of the basic services that we need. The private sector is also an essential 
part of the partnerships that need to be fostered to make this vision a reality.  

Yet people trying to establish and grow a business in emerging and developing countries face 
many  constraints,  not  least  in  terms  of  access  to  appropriate  finance.  The  most  severe 
difficulties are faced by the poorest in society who often lack access to the most basic financial 
services such as formal opportunities for saving, getting insurance or borrowing the financial 
capital they need to establish, conduct and expand their business activities.  

More  established  businesses  also  face  constraints  that  inhibit  investment  and  expansion  and 
put the jobs of their employees at risk. In these contexts, small and medium-sized enterprises 
and  even  mid-cap  companies  face  greater  financing  challenges  than  large  firms  and  this 
problem  is  greatly  exacerbated  in  countries  with  an  underdeveloped  financial  sector,  where 
banks  themselves  face  enhanced  funding  constraints  and  find  it  hard  to  meet  the  financing 
needs of most companies. Another gap is in the provision of risk-absorbing equity finance that 
can be critical in achieving a breakthrough for companies with a high potential for growth and 
job creation. 

3.1.2. Local private sector development in 2016 

Under the mandate objective of supporting local private sector development, outside the EU, 
the EIB uses a number of different instruments. In 2016, the EIB provided EUR 3.5bn through 
22 credit lines for local financial intermediaries to enable them to go further in addressing the 
finance needs of small and medium-sized enterprises and mid-cap companies. There were also 

8 

 
 
4 loans for private sector-implemented infrastructure and R&D projects that also contributed to 
local private sector development. Among the new projects in 2016, there were no microfinance 
or private equity projects in the regions covered by the ELM. 

Chart 2: Contribution of new projects to local private sector development by type of operation 

Number of new projects: 

Lending volume: 

4 

26 

22 

196 

EUR 3 702m 

3506 

Credit
lines for
SMEs and
mid-caps

Infrastruc
ture and
R&D

Note:  Lending  volumes  are  prorated  by  degree  of  contribution  to  the  local  private  sector  development  objective.  Many 
operations also contribute to the cross-cutting climate and regional integration objectives. 

Credit lines for private enterprise 

Credit lines are an important instrument for strengthening the capacity of financial sectors in 
developing  and  emerging  countries  to  provide  finance  for  local  companies.  It  particularly 
enhances  access  to  longer-term  funding  for  smaller  businesses,  helping  to  create  and  sustain 
jobs.  In  underdeveloped  financial  systems,  even  medium-sized  and  mid-cap  companies  can 
face financing constraints because of information asymmetries such as a lack of credit history.  

The new credit lines for SMEs and mid-caps provided in 2016 will allow local intermediary 
banks  to  make  almost  9  600  loans,  averaging  around  EUR  369  700  each.  Of  these,  nearly  8 
600  are  expected  to  go  to  SMEs  with  an  estimated  average  size  of  just  23  employees.  This 
funding will also enable local banks to extend the duration of the loans they offer to SMEs and 
mid-caps,  with  the  average  loan  tenor  (weighted  by  loan  size)  expected  to  be  4.3  years,  a 
substantial  increase  on  the  loan  durations  typical  for  developing  contexts.  In  fact,  it  is 
estimated that the loan tenor provided will be on average 132% higher than the local market 
norm, and will match the economic life of the SME investments financed in the great majority 
of cases. In the end, it is expected that these 22 credit lines will help sustain some 544 700 jobs 
in final beneficiary companies.  

Credit lines are not just a means of extending credit, through intermediaries, to SMEs and mid-
caps; they also have more indirect impacts on access to finance by supporting the development 
of local financial sectors that have to capacity to serve previously underserved sectors of the 
economy.  Six  of  the  new  credit  lines  in  2016  are  rated  “good”  or  “excellent”  in  terms  of 
support  to  banks  operating  in  very  shallow  markets  where  credit  to  the  private  sector  is  less 

9 

 
 
 
 
 
 
 
than  33%  of  GDP.  Four  provide  support  to  second  tier  banks  (smaller  banks  with  a  lower 
credit rating than the leading banks in  a country), helping to improve competition and client 
services  in  local  markets.  Six  have  a  specific  focus  on  increasing  access  to  finance  for 
underserved markets such as women or rural businesses. 

Table 1: Supporting local private sector development – overview of key expected results 

SME/mid-cap 
credit lines 

Expected outputs 
Total loans (EUR m) 
Total loans # 
Average loan size (EUR) 
Average loan tenor (years) 

3 542 
9 580 
369 700 
4.3 

Expected outcomes 
Jobs sustained (total) 
In SMEs 
In mid-caps 
In other 

544 700 
198 600 
343 900 
2 200 

Table 2: Credit lines for private enterprise – expected results by region and firm size 

Expected outputs 

  ALA 

EAST  MED 

PA 

SMEs 

Mid-caps  Other 

Number of projects 

2 

4 

5 

11 

- 

- 

- 

Total loans (EURm) 
Total loans # 
Average loan size (EUR 
‘000s) 
Average loan tenor (years) 

Infrastructure and R&D 

200 
807 
248 
4.0 

595 
1 326 
449 
2.8 

867 
798 
1 086 
4.6 

1 880 
6 694 
281 
4.6 

2 478 
8 558 
290 
4.1 

1 048 
1 007 
1 041 
3.9 

15 
15 
1 000 
10.0 

Some  EIB  loans  for  larger  industrial  or  infrastructure  projects  also  support  private  sector 
development through direct lending to private sector actors, or through intermediated lending 
to companies for specific infrastructure improvements. Four such projects in 2016 include one 
investing in grain  transportation and storage  in Ukraine and two projects focused on smaller 
renewable  energy  projects  in  the  Maldives  and  Turkey.  Sector  specific  indicators  for  these 
projects  are  reported  in  the  following  section.  One  new  operation  will  fund  research  and 
development by the ICL company, involving research collaboration spanning research sites in 
Germany, the Netherlands and Israel, that is expected to achieve economic and environmental 
improvements  in  the  fertilizer  industry.  The  project  will  create  1  480  person-years  of 
employment. 

The results achieved: 
The  completed  (fully  allocated)  credit  lines  include  4  in  Turkey,  1  in  Azerbaijan  and  1  in 
Brazil. In total, EUR 1.2bn was lent through 1 883 loans that went predominantly to small and 
medium-sized  enterprises.  In  total,  these  loans  thereby  supported  companies  employing  136 
600  people.  59%  of  these  jobs  were  actually  in  mid-caps  which  usually  receive  larger  loans 
and where each loan supports a larger number of employees. The average tenor of the loans 
provided  to  final  beneficiaries  (weighted  by  loan  size)  was  5.1  years.  This  is  considerably 
higher than these companies are typically able to obtain in local markets. It is slightly longer 
than the average tenor reported for completed credit lines last year, reflecting the fact that the 

10 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
credit lines completed this year are in emerging economies with relatively developed financial 
sectors. 

Table 3: Ex post results for six completed credit lines 

Results achieved 

All SMEs  Micro 

Small 

Medium  Mid-caps  All 

Total loans (EURm) 

Total loans # 

Average loan size (EUR ‘000s) 

Average investment size (EUR 
‘000s) 

478 

876 

546 

54 

139 

386 

122 

336 

363 

302 

402 

752 

247 

130 

1 203 

1 883 

1 900 

639 

974 

314 

642 

1 487 

5 220 

1 522 

Average loan tenor (years) 

4.4 

5.6 

3.8 

4.5 

5.3 

5.1 

Jobs sustained 

56 283 

476 

8 766 

47 041 

80 319 

136 602 

These  aggregate  results  are  largely  in  line  with  expectations.  The  total  number  of  jobs 
sustained  expected  at  appraisal  was  156  000,  a  12%  difference.  In  terms  of  the  targeting  of 
different sizes  of firms,  for one of the operations in  particular there was a tendency to  over-
estimate  lending  to  smaller  firms.  Average  tenor  duration  was  slightly  underestimated  at 
appraisal in many cases. This kind of data from actual loan allocations can be used to inform 
future results estimations at appraisal. 

Box 1: Completed project - Supporting rural SMEs in Armenia 
The Armenian economy has  seen strong growth  and decline in  poverty  in  recent  years, but 
there  is  a  need  to  diversify  the  economy  and  strengthen  the  SME  sector,  particularly  in 
relatively  underdeveloped  rural  areas.  Yet  SMEs  suffer  from  limited  access  to  finance, 
reflecting they fact that local banks themselves do not have direct access to capital markets 
and are largely reliant on short-term funding sources.  
The Armenia Apex Loan, signed in 2014, has helped to address this situation, providing long-
term  finance  for  local  banks  through  the  Central  Bank  of  Armenia.  This  funding  was  fully 
allocated by the end of 2016, reaching 113 companies employing a reported 6357 people (56 
employees  on  average),  and  overwhelmingly  in  the  agriculture,  food  processing  and 
accommodation  and  catering  sectors.  With  an  average  maturity  of  over  5  years,  the  loans 
provided  are  much  more  advantageous  for  financing  productive  investments  than  the  terms 
typically available for SMEs. It is estimated that these loans may help create just over 2 000 
additional jobs. 
To enhance the effectiveness of the project and increase the lasting benefits, the EIB was able 
to mobilise EUR 500 000 from the Eastern Partnership Technical Assistance Trust Funds for 
capacity-building.  Local  intermediary  banks  received  training  on  how  to  develop  products 
that  meet  the  needs  of  agricultural  and  tourism  SMEs,  how  to  assess  environmental  and 
climate  risks  of  agricultural  investments,  and  on  complying  with  EIB  selection  criteria. 
Training on financial literacy was provided to final beneficiary SMEs.  

11 

 
 
 
 
The  Araks-2  cooperative  employs  around  24  people,  utilising  local  milk  production  to 
manufacture a range of cheeses. They used 5-year EIB-funded loans totalling EUR 95 000 to 
acquire  a  new  pasteurizer,  casting  forms  and  inputs,  allowing  them  to  step-up  production. 
Looking  forward,  they  plan  to  invest  to  triple  production  capacity  and  expand  the  export 
share of sales to at least 35%.  
A loan of EUR 180 000 with a 7 year duration financed the renovation of Hotel Alpina in the 
popular tourist town of Tsakhkadzor, and enabled the purchase of the hotel minibus. With 35 
employees, the hotel has already achieved a 20% increase in the number of guests. 

3.2. 

Development of social and economic infrastructure 

3.2.1. EIB's social and economic infrastructure framework 

Developing  the  infrastructure  needed  to  provide  essential  services  and  support  economic 
growth is a key pillar of the development process. Whether considering water and sanitation 
systems, public transport and roads, energy systems or health care facilities, they are dealing 
with  vital  building  blocks  of  social,  economic,  and  sustainable  development.  And  because 
infrastructure are often public goods with positive spill-overs for society, the environment and 
the economy, public financing often has a vital role to play.  

In  2016,  the  EIB  invested  a  total  approved  amount  of  EUR  3.6bn  in  33  new  infrastructure 
projects  in  the  ELM  regions.  Transport  projects  were  a  particular  focus  with  12  projects 
representing over EUR 2.1bn in lending, and expected to benefit around 1.2 million passengers 
every  day.  But  EIB  projects  also  covered  a  wide  range  of  sectors.  Alongside  energy 
investments  and  projects  in  the  water  and  sanitation  sector,  there  are  also  significant 
investments  in  mixed  urban  infrastructure,  the  renovation  of  education  facilities,  hospital 
construction and other areas.  

Chart 3: Contribution of new projects to strategic infrastructure objective by sector 

Number of new projects: 

Lending volume: 

33 

EUR 3 583m 

Note:  Lending  volumes  are  prorated  by  degree  of  contribution  to  strategic  infrastructure  objective.  Many  operations  also 
contribute to the cross-cutting climate and regional integration objectives. 

Direct employment impact  

12 

 
 
 
 
  
 
 
 
In total, new infrastructure projects in 2016 are expected to create 143 000 person-years of 
temporary employment during construction phases. The operation of the completed 
infrastructure is expected to create the equivalent of 10 000 full-time jobs. The temporary 
employment effect is largest in the transport and water sectors. The largest numbers of 
permanent jobs associated with completed infrastructure are in the education and urban 
development sectors which reflects the numbers of staff that will use new and renovated 
facilities for education and other public services. Among other sectors, Transport has the most 
notable direct permanent employment impact. 

Table 4: Infrastructure projects - direct employment impact 

Transport 
Water and sanitation 
Energy 
Urban development 
Education 
Health 
Waste management 
Agriculture 
Telecommunications 

Employment during construction  
(person-years)  
73 268 
- 
10 930 
18 400 
16 400 
11 240 
10 500 
2 150 
270 

Employment during operation  
(full-time equivalent) 
1 630 
- 
85 
1 700 
5 670 
0 
40 
887 
0 

Total 
N.b. Totals do not cover operations for which no figures could be estimated at appraisal. 

143 158 

10 012 

Energy 

With six new projects receiving EUR 493m in EIB lending, the energy sector is less of a focus 
than  last  year.  There  are  less  large-scale  energy  generation  projects  and  a  larger  focus  on 
smaller  schemes  involving  generation  from  renewable  sources  of  energy.  In  fact,  the  only 
generation capacity from fossil fuels will be modern diesel generators installed in the Maldives 
as a part of a new system involving solar-voltaic generation to replace older and less efficient, 
purely diesel-based generation (Box 2). The largest energy generation projects are in Turkey: 
the  Fina  Enerji  wind  power  project  (Box  3)  and  a  credit  line  with  Isbank  that  will  target 
specifically  renewable  energy  and  energy  efficiency  schemes  expected  to  generate  enough 
energy to serve some 105 000 households. In total, new projects in 2016 will result in energy 
generated for the equivalent of around 338 000 households. 

Box 2: Reducing diesel dependence in the Maldives 
Power generation represents a challenge for the Maldives, as an archipelago of 26 atolls. The 
country has relied substantially on old and inefficient diesel generators. As recently as 2012, 
oil  imports  made  up  35%  of  GDP.  A  EUR  45m  EIB  loan  is  supporting  a  project  to  help 
change this situation by installing at least 50 MW of solar-diesel hybrid energy systems, with 
about 25 MW of roof-top and ground mounted solar PV panels and about 27 MW of more 
efficient  diesel  generator  capacity,  as  well  as  the  rehabilitation  of  about  430  km  of 
distribution lines and the installation of lithium-ion batteries and control system equipment. 
This will allow about 37 MW of obsolete diesel generator capacity to be retired.  

13 

 
 
 
 
 
The project will supply enough energy to  meet the needs of  about 110 000 households and 
will  enable  some  14 500  new  connections  to  the  network.  It  will  save  the  country  an 
estimated EUR 13.6m a year in reduced fuel imports and will also have an impact in terms of 
lower  emissions  of  CO2  and  other  pollutants.  During  operation,  the  project  will  result  in 
estimated  GHG  emissions  of  76  kt  CO2-eq/year.  However  relative  to  predicted  emissions 
without the project, it is expected to result in a reduction of 34 kt CO2-eq/year.  

Box 3: Expanding wind power capacity in Turkey 
Turkey  is  experiencing rapidly-growing  demand  for  electricity  and  has  excellent  renewable 
resource potential. Renewable energy sources only account for about 25% of total electricity 
supply,  20%  of  which  is  hydropower.  The  government  has  set  a  target  of  increasing  the 
contribution of renewable to 30% by 2023. The EIB is contributing to this goal with a EUR 
33m loan to Fina Enerji to construct three wind farms located in different regions of Turkey, 
with  a  total  capacity  of  106  MW.  The  funding  has  allowed  the  project  to  go  ahead  more 
quickly than would otherwise have been possible. It will produce enough electricity to supply 
the  equivalent  of  123 000  households  And,  with  zero  estimated  absolute  emissions,  is 
expected toachieve an emissions reduction relative to the alternative power generation mix in 
the country of 148 ktCO2-eq/year. 

Energy networks are the main focus of two new projects in 2016. Together it is expected that 
new  projects  will  install  3  239km  of  power  lines  and  connect  743  000  new  customers  to 
electricity networks. One project expected to have impacts at a particularly large scale is the 
Neoenergia Electricity Distribution 2 project which will connect 728 000 new households and 
businesses in the State of Bahia in Brazil, including 68 337 in rural areas under the Luz para 
todos programme. The bank is also financing the Ungheni-Chisinau Gas Pipeline which will 
connect  gas  consumers  in  the  Moldovan  capital  to  gas  supply  from  Romania,  helping  to 
diversify and ensure security of supply. 

Table 5: Addressing infrastructure needs – overview of key expected results  

 Expected outputs 

 Expected outcomes 

Generation capacity 

373 MW 

Annual electricity production  960 GWh 

        From renewables 

346 MW 

Households potentially served  338 000 

Energy 

New/upgraded substation 
capacity 

1 440 MVA 

Annual energy transported 

7 900 GWh 

New/upgraded power lines  

3 200 km 

New households connected 

743 200 

Transport 

Length of road built/upgraded  

863 lane  
km 

Additional vehicles benefiting, 
per day 

41 100 

Time savings (hours/year) 

7.9 million 

Annual vehicle operating cost 
savings 

EUR 4.5m 

14 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New/upgraded urban transport 
route (bus/tram/metro) 

59 km 

Additional passengers 
benefiting, per day 

New/upgraded urban stations or 
stops 

34 

Passenger time savings 
(hours/year) 

1.2 million 

42 million 

Vehicles or rolling stock 
purchased 

176 

Additional rail cargo carried 
(tonnes/year) 

22 million 

Railway track built or upgraded  323 km 

New/upgraded railway stations 

12 

New/upgraded water mains/pipes  94 km 

Water & 
sanitation 
and solid 
waste 

New/upgraded wastewater 
treatment capacity (person-eq.) 

1.9 million 

Population benefiting from 
improved sanitation services 

1.5 million 

New/upgraded sewer/storm pipes  563 km 

New sanitary landfill capacity 
(m3) 

550 000 m3 

Population served by new 
sanitary landfill 

469 000 

Telecoms 

Population covered by new 4G 
network 

67% 

Additional cellular data users  64 900 

Beds in new/rehabilitated 
hospitals 

5 341 

Patients treated per year in new 
or rehabilitated hospitals 

150 000 

Health, 
education 
and urban 
development 

New places in new or 
rehabilitated higher education 
facilities 

54 814 

Additional students enrolled 

37 054 

Pop. benefitting from other 
new/ upgraded urban 
infrastructure 

4.0 million 

Transport 

EIB lending to the transport sector outside the EU increased over the previous year in terms of 
both  the  number  of  new  projects  and  the  volume  of  lending.  Urban  public  transport  and 
railways accounted for around half of this lending by volume. Major projects include the first 
metro line in the city of Lucknow, India (Box 4), a framework loan for urban public transport 
investments in Ukraine, a further extension of the metro system in Istanbul, which builds on 
previous EIB investments in that system, and additional rolling stock for the metro system in 
Cairo. EIB lending will also support the upgrading of 323km of railway lines in Ukraine and 
Moldova  to  allow  for  increased  capacity  and  reduced  travel  times,  and  helping  to  prevent 
increases in road traffic. Together, these metro and rail projects will benefit some 1.2 million 
passengers every day, save 42 million hours of travel time every year, and enable 22 million 
tons of cargo to be carried.  

15 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New  road  sector  projects  include  three  projects  to  improve  trade  connections  within  and 
between Georgia and Armenia along parts of the extended Trans-European Transport Network 
(Box 12).The bank is also supporting road modernisation in Bosnia Herzegovina. One project 
is notable for the significant impact it is expected to have on congestion in the city of Bizerte 
in Tunisia. The two parts of the city, which straddles the mouth of Lake Bizerte, are currently 
linked by a single  lifting bridge. The project will construct a new bypass with  a 2.1km long 
bridge across the lake. It is expected to save 6.5 million hours of travel time and to be used by 
26 000 vehicles per day.  

Box 4: Transport-led sustainable development in Lucknow, India 
Urban  public  transport  is  a  key  driver  of  environmentally  sustainable  social  and  economic 
development.  But  when  populations  in  cities  grow  too  quickly,  it  can  present  a  barrier  to 
mobility  and  significantly  impact  people’s  quality  of  life  by  restricting  access  to  public 
services as well as safety due to overcrowding of the existing transport infrastructure. 
In  2016,  the  EIB  signed  a  new  EUR  200m  loan  in  India  to  finance  the  first  metro  line  in 
Lucknow, the more than three million-inhabitant capital of India’s most populous state, Uttar 
Pradesh. The project is the first phase of a two-phase plan to construct a 34km-long metro line 
and the first step towards increasing the modal share of public transport within the city from 
currently 10% to 27% by 2030. The current project will build the first 23km line which will 
run from the airport in the south of the city, through dense residential areas, the city centre and 
to  the  north,  serving  22  stations  along  the  route  and  serving  13 500  passengers  per  hour  per 
direction, or around 300 000 a day. 
The  project  will  form  the  backbone  of  the  city’s  mobility  network  by  providing  public 
transport that  is  reliable,  safe,  fast  and  affordable.  The  metro  will also  substantially improve 
the urban environment by facilitating the densification of development, and additionally will 
contribute to climate change mitigation through reductions in greenhouse gas emissions. 

Water, sanitation and waste 

There were two new water and sanitation projects in 2016, involving EUR 129m EIB lending, 
and a further EUR 15m targeting solid waste management. Two wastewater treatment projects 
in  Panama  and  Tunisia  will  serve  a  total  population  of  about  1.5  million,  as  well  as 
contributing to a reduction in pollution of the water of Panama bay and the Mediterranean sea 
(Box 5). Another new project in the sector will support a number of water supply, wastewater 
treatment and solid waste management schemes in the Kyrgyz Republic. Whilst most of these 
schemes  are  still  to  be  determined,  it  is  expected  that  they  will  include  the  rehabilitation  of 
landfill sites, to allow nearly half a million people to be served by improved sanitary landfill 
facilities.  Another  such  framework  loan  will  support  schemes  to  improve  solid  waste 
management in Morocco. 

Box 2: Reducing pollution of the Mediterranean Sea 
The overall objective of the DEPOLMED initiative in Tunisia is to combat the pollution of 
the  Mediterranean  Sea,  whilst  bringing  benefits  to  local  communities.  It  involves  a  EUR 
140m  investment  program  aimed  at  rehabilitation  and  expansion  of  sewerage  networks  and 
water  treatment  installations  along  the  coastal  zones  of  Tunisia.  Working  with  the  Agence 
Française de Développement, the EIB is contributing EUR 70m. The initiative also benefits 

16 

 
 
 
 
 
 
from a grant from the EU Neighbouring Investment Facility of EUR 10.4m. 
By  improving  the  environment,  as  well  as  the  effectiveness  of  the  public  sanitation  service 
provided by ONAS, the programme aims at improving the living conditions of those living in 
the coastal zones of the Mediterranean, both in Tunisia and beyond. The project is expected 
to  have  positive  impacts  on  all  the  sectors  affected  by  pollution  –  especially  fishery  and 
tourism  –  and  will  allow  for  the  connection  of  60  000  additional  persons  to  the  sewerage 
network, while improving services for close to 1.2 million people who are already connected. 
In  addition,  there  will  be  a  positive  impact  in  terms  of  climate  change  mitigation  as  the 
treatment  of  wastewater  will  result  in  a  reduction  in  emissions  of  methane  and  will  reduce 
reliance on already stressed water resources.        

Telecommunications 

In Tunisia, the EIB is funding a major roll-out of the 3G and 4G networks. It is expected to 
install  2520  3G  sites  and  1557  4G  sites  to  benefit  a  large  proportion  of  the  population, 
including an expected 1.2 million additional cellular data subscribers.   

Health, education and urban development 

Three  new  projects  support  urban  reconstruction  or  development  schemes  that  will  cover  a 
range  of  different  infrastructure  sectors.  Responding  to  the  terrible  earthquake  that  struck 
western parts of Ecuador in April 2016, one EUR 159m project will finance the repair and re-
establishment  of  damaged  infrastructure  such  as  roads,  water  and  electricity  systems, 
telecommunications and municipal buildings (Box 6). Similarly, EUR 100m will support the 
repair  of  infrastructure  damaged  by  recent  floods  in  Tbilisi,  the  capital  of  Georgia.  A  third 
project  will  provide  support  to  local  authorities  throughout  Georgia  to  upgrade  local 
infrastructure and improve service delivery for local residents. 

Box 3: Rebuilding after the Earthquake in Ecuador 
On  the  16  April  2016,  an  earthquake  struck  that  ravaged  large  parts  of  western  Ecuador. 
Widespread  damage  was  caused  across  Manabi  province,  with  buildings  and  infrastructure 
collapsing.  Almost  700  people  died,  more  than  6  000  were  injured  and  over  100  000  were 
displaced. Livelihoods in these areas were severely affected with businesses having to close or 
temporarily lay off workers. The tourism industry was also severely affected as  many hotels 
collapsed or were severely damaged. 
Funds  available  for  early  reconstruction  are  very  limited  in  Ecuador  due  to  the  country’s 
economic problems. The EIB responded to the Ecuador government’s call for support with a 
EUR 162m loan (actually provided in USD) that will cover 100% coverage of cost of eligible 
sub-projects. These will reconstruct or upgrade basic infrastructure such as water and sewerage 
systems,  roads  and  social  and  administrative  facilities,  bringing  benefits  to  an  estimated  1.5 
million  people  in  the  project  areas.  A  grant  from  the  EU  Latin  America  Investment  Facility 
will be  blended with the EIB loan to finance technical assistance to improve governance and 
to develop the institutional and technical capacities of the local authorities with regard to  the 
design, procurement, implementation and monitoring of the projects. Throughout there will be 
close co-operation with other key donors such as the WB, IDB and the UN.  

17 

 
 
 
 
In  the  education  sector,  the  Technical  and  Technological  Institutes  programme  will  build  13 
new  technical  institutes  in  different  regions  of  Ecuador,  and  will  also  remodel  8  existing 
school  campuses  to  equip  them  to  deliver  post-secondary  technical  training.  In  Ukraine,  a 
project  will  focus  on  renovating  higher  education  facilities,  both  improving  facilities  for 
students and significant energy efficiency improvements (Box 7). In the health sector, the bank 
is supporting the construction of two new hospitals in Turkey. 

Box 4: Renovating Ukraine’s Universities 
Ukraine has the highest per-capita energy consumption rate in Europe and part of the reason 
lies in the low energy-efficiency of many buildings. At the same time, the country needs to 
investment  in  education  and  skills  to  enhance  economic  competitiveness  and  long-term 
economic  prospects.  The  Ukraine  Higher  Education  project  will  respond  to  both  these 
challenges, increasing energy efficiency through the refurbishment of teaching, research and 
supporting  facilities  in  several  universities  using  the  latest  energy-saving  technologies.  The 
intervention should help reduce running costs, improve the quality of teaching, and enhance 
the  quality  of  learning  spaces  and  research  facilities.  It  will  help  the  universities  to  make 
progress  towards  the  standards  of  the  European  Higher  Education  Area  and  the  European 
Research  Area,  and  thus  replicates  EU  actions  to  increase  investment  in  research  and 
education facilities to achieve the EU 2020 strategy objectives.  
With  a  first  phase  targeting  147  buildings  with  a  combined  floor  surface  of  820 000m2 
planned  to  be  built  or  renovated.  Works  will  create  some  14 200  person-years  of 
employment. The EIB loan of EUR 120m represents almost three quarters of the total project 
cost,  providing  financial  resources  for  the  project  that  would  be  difficult  for  the  Ukrainian 
authorities  to  raise  on  their  own,  given  the  difficult  situation  in  the  country.  The  project 
benefited from a first grant from the Eastern Partnership Technical Assistance Trust Fund to 
finance energy audits. It will also benefit from a grant from the Neighbourhood Investment 
Facility  (NIF)  to  provide  technical  assistance  for  further  preparation  and  implementation 
support. 

Agriculture  

Aside from one credit line which focuses on agriculture sector SMEs and mid-caps in Georgia, 
the  EIB  is  also  supporting  a  project  in  Ukraine  focused  on  upgrading  possibilities  for  the 
storage and transport of grain and oils seeds. This will include constructing storage elevators at 
river terminals on the Dnipro river, the renovation of a shipyard and the construction of vessels 
for  river  transport  of  agricultural  produce.  By  encouraging  a  modal  shift  from  road  to  river 
transport,  the  project  will  support  climate  change  mitigation,  and  by  improving  capacity  to 
cope with climate variability it will also contribute to adaptation to climate change 

Completed infrastructure and industry projects 

The  three  infrastructure  projects  completed  under  the  ReM  framework  include  the  Ka  Xu 
concentrated  solar  power  project  in  South  Africa  (Box  8)  and  the  CA  CCFL  II  solar 
photovoltaic project in Honduras. The latter has successfully installed 81MW capacity, so far 
producing 145GWh of electricity per year at a considerably lower cost than the alternative of 
diesel-powered  generation.  The  Armenia  Water  sector  project  focused  on  the  repair  of 
essential water and sewage treatment systems in small towns around the country (Box 9).  

18 

 
 
 
The  two  other  ReM  Framework  projects  competed  in  2016,  one  is  an  upgrade  to  plastic 
production  facilities  Petkim,  chemical  industry  firm  in  Turkey,  which  has  supported  local 
private sector development and jobs, including by increasing the domestic supply of inputs to 
local downstream manufacturing industries. In line with the Pre-Accession Facility for Turkey, 
the  other  project  was  also  focuses  on  local  private  sector  development,  enabling  the  Arcelik 
company  to  carry  out  research  and  development  on  more  energy  efficient  home  appliances 
based  on  advanced  materials,  innovative  technologies  equipped  with  smart  connectivity 
features 

Box 5: Completed project – South Africa’s first concentrated solar power plant 
With 360,000 parabolic trough mirrors and 2.5 hours storage capacity, the 100 MW Ka Xu 
CSP power plant is the largest in the Southern hemisphere. It is already helping to address the 
rapidly  growing  need  for  more  clean  energy  in  a  country  suffering  from  aging  coal-fired 
power  stations  and  with  a  commitment  to  reduce  carbon  emissions.  With  production  being 
ramped up since early 2015, the plant had reached 100% of the eventual expected output by 
the  end  of  2016,  and  will  provide  enough  output  to  power  at  least  75 000  households. 
Working  through  local  banks,  the  EIB  was  able  to  provide  not  only  long-term  financial 
resources, but local currency funding to reduce the risks for the project. 

Box 6: Restoring water supplies in Armenia 
With the fall of communism, Armenia’s drinking water system fell into a state of disrepair and 
has  required  considerable  new  investments.  When  the  Armenia  Water  Sector  project  was 
conceived, Armenians still typically only benefited from around 14 hours of water supply each 
day,  existing  facilities  risked  spreading  bacterial  infections  and  sewage  was  routinely 
discharged into lakes and rivers without treatment.  
Against this background, the Armenia Water and Sewerage Company called for financial and 
technical assistance to improve the country’s water system and in 2012 the EIB approved EUR 
6.5m loan for works which were completed in 2014, with co-funding from the EBRD and the 
Neighbourhood Investment  Facility. The programme of works covered the rehabilitation and 
upgrading of the water supply, sewerage and wastewater treatment facilities in 17 small towns 
around the country. This included the rehabilitation of the water distribution network, namely 
the replacement of old pipes and installation of new pumping mains and distribution pipes; as 
well  as,  the  protection  of  spring  sources  with  creation  of  sanitary  zones,  rehabilitation  and 
construction  of  boreholes,  wells,  pumping  stations,  reservoirs  and  chlorination  facilities;  and 
finally,  the  construction  of  new  waste  water  treatment  plants  and  rehabilitation  of  existing 
sewers in the towns of Dilijan and Jermuk. 

3.3.  Climate change mitigation and adaptation 

3.3.1. EIB's Climate action framework 

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

19 

 
 
 
 
As both the cause and effects of climate change are global, extending and expanding climate 
finance beyond the borders of the EU is a vital part of EU external and development policy. As 
the  bank  of  the  EU,  and  as  the  worlds’  largest  single  provider  of  climate  finance  in  volume 
terms, the EIB plays a central role in these efforts, particularly after the ground breaking global 
agreement  made  in  Paris  in  2015  which  came  into  force  at  the  UNFCCC  conference  in 
November 2016. The Bank already has a strong track record in mobilising financial resources, 
which it offers to support countries both inside and outside the EU, supporting their Nationally 
Determined  Contributions,  national  mitigation  and  adaptation  plans  and  strategies,  and  low 
carbon energy and transport policies. 

3.3.2. EIB's Climate action in 2016 

Of the new project lending signed for the ELM regions in 2016, EUR 1.9bn will contribute to 
the  cross-cutting  policy  objective  of  climate  change  mitigation  and  adaptation.  This  will  be 
achieved through a large number of projects across almost all sectors. All of these projects also 
contribute  to  either  local  private  sector  development  or  the  development  of  social  and 
economic infrastructure. 

In  many  cases,  only  part  of  a  project  contributes  to  the  climate  change  objective  and  only  a 
proportion  of  that  project’s  lending  total  is  therefore  reported  as  contributing  towards  the 
objective. Analysis of the results of past EIB projects has revealed that many projects make a 
small  contribution  to  action  on  climate  change  even  if  this  is  not  the  main  objective  of  the 
project. Such small contributions add up to make a significant difference. A typical example is 
a  credit  line  for  SMEs  in  which  some  investment  projects  by  beneficiary  businesses  involve 
achieving  greater  energy  efficiency  in  buildings  or  installing  small-scale  renewable  energy 
generation capacity, such as  solar panels.  Accordingly,  some 50 of the new projects in  2016 
contribute to the Climate Action objective. This includes 21 credit lines. The Bank applied in 
2016 an  estimate  of 2%  as  the likely climate  content that will be found in  future  allocations 
under credit lines signed in 20164.  

Overall,  by  far  the  largest  sector  within  Climate  Action  is  from  lower  carbon  transport, 
accounting for 64%, with renewable energy and energy efficiency contributing a further 21% 
of new non-EU climate action lending in 2016. Mitigation such as methane avoidance in waste 
and  wastewater  sector  also  continues  to  play  an  important  role,  while  adaptation  contributed 
3.5%. 

4 The 2% is based on an ex-post analysis of earlier credit lines, namely of the activities financed at allocation level 
(financial  intermediaries’  on-lending  to  final  beneficiaries)  under  similar  non-dedicated  credit  lines  in 
2013-2015 of all EIB operations (including EU and non EU). 

20 

 
 
                                                            
Chart 4: Climate Action in ELM region (EUR mn) 

1,910 

EUR 2 041m 

Box 10: Mainstreaming Climate Action: the ELM region portfolio carbon footprint 

The  EIB  Carbon  Footprint  Exercise  (CFE)  estimates  and  reports  Greenhouse  Gas  (GHG) 
emissions  from  projects  (not  only  climate  action  projects)  where,  in  one  standard  year  of 
operations:  

    -  absolute  emissions  (actual  emissions  from  the  project)  exceed  100  000 t  CO2-eq/year; 
and/or 

    - relative emissions (estimated emissions increases or avoidance compared to the expected 
alternative) exceed 20 000 t CO2-eq/year. 

Absolute emissions refer to the direct emissions of the project itself (Scope 1 emissions) plus 
emissions from generation of the power supply used by the project (Scope 2 emissions). Scope 
3 emissions (other indirect emissions) are not normally included in project data; however, they 
are  included  for  physical  infrastructure  links  such  as  roads,  railways  and  metros.  Relative 
emissions  are  estimated  by  comparing  the  absolute  emissions  with  the  emissions  from  a 
baseline identified as the expected alternative.  

Whilst relative emissions are important for comparing technologies and projects, at the heart of 
the EIB’s footprinting approach are the absolute emissions from each project, as these are what 
will  ultimately  affect  our  climate.  Individual  project  GHG  data  is  assessed  at  appraisal,  and 
reported  on  the  Bank’s  Environmental  and  Social  Data  Sheets  (ESDS).  For  the  purposes  of 
aggregated annual reporting, project emissions are prorated to the volume of EIB funding of 
each project that year, thus avoiding possible double counting with the reporting of other IFIs. 

In  2016,  17  of  the  projects  in  the  ELM  regions  (including  signed  operations  and  large 
allocations  approved  during  the  year)  were  included  in  the  2016  Carbon  Footprint  Exercise. 
They  represent  total  EIB  signatures  or  allocation  approvals  of  EUR  0.9bn.  The  related  total 

21 

 
 
 
 
 
 
 
absolute  GHG  emissions  and  sequestered  GHGs  are  estimated  as  -0.2Mt  CO2-eq/year  (the 
negative figure  being due to  a number of large forestry  projects which will sequester CO2)5. 
The  related  reduction  in  emissions  due  to  the  2016  financing  of  the  projects  included  in  the 
analysis is estimated at 0.6Mt CO2/year. 

All  climate  action  data  and  GHG  figures  will  be  subject  to  EIB's  2017  Sustainability  Audit 
(EIB Sustainability Report 2016). 

Box 11: Mainstreaming Climate Action: Climate Risk Screening  
In line with EIB’s commitment to the European Parliament to systematically screen all new 
ELM operations for climate change risk in order to address project vulnerabilities, the EIB has 
continued to advance its work on Climate Risk Screening of ELM projects in 2016. 
A triage of all 2016 ELM projects was carried out by EIB’s Environment, Climate and Social 
Office (ECSO). The projects are grouped into three categories enabling targeted action: 

1. Low climate risk, plus Framework loans and credit lines 
2. Projects under appraisal or within next 12 months: Medium- to high risk 
3. Projects with expected appraisal 12 months or later 

Firstly, projects considered low climate change risk, as well as intermediated loans where the 
underlying subprojects are still unknown (e.g. credit lines and framework loans), are addressed 
by researching and sharing country level information on climate change impacts. This 
information is highlighted to the project teams for discussion with the promoters and clients: 
plus larger subprojects under Framework loans are treated as stand-alone operations with 
separate climate risk screening. Some low risk projects are also identified for further follow up 
by project teams if they could have opportunities to benefit from climate change or to seize 
low cost interventions to make projects more climate-resilient.  
Secondly, the operations with potential medium and high climate risks are controlled for 
whether a climate risk assessment has already been carried out by the promoter or another co-
financier, such as another MDB or IFI. Thirdly, the remaining projects identified as not yet 
having a climate risk assessment, are grouped in two categories according to their expected 
appraisal programme. Projects with an expected appraisal within the next twelve months are 
screened with either a commercial online climate screening tool, by EIB’s own experts, or by 
external consultants. This is an amendment to EIB’s approach made during 2016. This new 
approach enables an early dialogue on projects with expected medium- and high-risk 
sensitivity to climate change, which may require changes to the project scope to address 
identified climate change risks and vulnerabilities. 
The results of the triage phase in 2016 are highlighted below. Out of the 133 ELM operations 
created in the management information system: 

1. 

Framework Loans, Credit lines and low climate risk: 56 projects – country risk 

information approach. 

5  The  overall  aggregate  figure  of  -0.2MtCO2-eq/year  is  derived  from  total  emissions  of  0.1MtCO2-eq/year  and 

sequestration of 0.3MtCO2-eq/year. 

22 

 
 
 
                                                            
2. 

Medium- to high climate change risk: 43 projects – climate risk assessment by 

promoter, other IFI or EIB team. 

3. 

Projects with expected appraisal 12 months or later and cancelled projects: 34 

projects – for future follow up. 
Project teams are being engaged and informed by the ECSO Climate team and specialised 
consultants during and after this triage phase, with the aim to communicate potential climate 
vulnerabilities of the projects and understand how these potential vulnerabilities are possibly 
already being tackled, or could be tackled, by the promoter with the aim to ensure that the 
residual risk is low.  
Along with current manual screenings for climate risk, the EIB has advanced its work on 
mainstreaming and integrating climate risk within internal procedures and management 
information systems, building the foundation for a Bank wide climate risk management 
system. The climate risk management system will cover not only ELM but the full EIB project 
portfolio for climate risk: as set out in, EIB’s Climate Strategy, where the planned action is for 
all EIB operations to be screened for climate risk by 2020. 

3.4. 

Regional integration among partner countries 

3.4.1. EIB's Regional integration framework 

Improving links amongst partner countries, and between partner countries and the Union, is a 
cross-cutting  objective of  the  EIB’s  action  outside  the  Union.  EIB  projects can  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.  

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

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

3.4.2. EIB's Regional integration action in 2016 

The  EIB  signed  15  new  projects  in  2016  that  contribute  to  regional  integration.  The  total 
approved EIB finance for these projects was EUR 1.6bn. These projects cover transport links, 
support 
local  private  sector  development  and  an  energy 
interconnection. 

to  convergence 

through 

Chart 5: Contribution of new projects to the regional integration objective, by sector 
Number of new projects: 

Lending volume: 

23 

 
 
 
 
15 

EUR 1 560m 

Note: Lending volumes for multi-sector projects are prorated by sector where allocation by sector is defined at appraisal. The 
regional  integration  objective  is  cross-cutting:  all  projects  also  contribute  to  the  private  sector  development  or  social  and 
economic infrastructure objectives.  

Credit lines and R&D 

The  majority  of  EIB  lending  for  new  regional  integration  projects  in  2016,  EUR  1bn  is  for 
credit  lines  supporting  access  to  long-term  finance  for  SMEs  and  mid-caps,  thereby  aiding 
economic  convergence  with  the  EU.  Six  of  these  are  in  Turkey  and  one  is  in  Bosnia  and 
Herzegovina. A further credit line is targeting specifically SMEs in the agricultural and food 
sector  value  chain  in  Georgia,  and  is  here  counted  under  agriculture.  Together,  these  credit 
lines are expected to enable financing for some 3 500 SMEs and mid-caps that employ some 
280  000  people.  One  new  operation  will  fund  collaboration  in  research  and  development 
between Germany, the Netherlands and the ICL company in Israel. The research is expected to 
achieve economic and environmental improvements in the fertilizer industry. The project will 
create 1 480 person-years of employment. 

Transport, energy and agriculture 

Four  transport  projects include  rail modernisation  projects in  Ukraine  and  Moldova  that  will 
expand capacity for passenger and cargo services and help to facilitate trade across the region 
and  with  the  EU.  Two  road  projects  developing  the  East-West  Highway  in  Georgia  and  the 
Armenia  M6  Interstate  road  will  be  similarly  important  in  linking  the  region  to  markets  in 
Europe and elsewhere (Box 12). In the energy sector, the Ungheni-Chisinau Gas Pipeline will 
connect  gas  consumers  in  the  Moldovan  capital  to  gas  supply  from  Romania,  helping  to 
diversify and ensure security of supply. Finally, the Nibulon Cereal production and transport 
project (here counted under agriculture) will not only support grain storage facilities but invest 
in river transport infrastructure, improving links between the Ukrainian agricultural sector and 
wider markets.  

Box 12: Connecting Georgia and Armenia 

Three inter-linked projects in Georgia and Armenia will upgrade strategic road links on the 
extended  Trans-European Transport Network  (TEN-T),  supporting the growth  of trade  and 

24 

 
 
 
 
 
 
 
 
 
regional integration. One will develop the East-West Highway in Georgia, located along the 
historic Silk Road that facilitated trade and cultural exchange between Europe and Asia. The 
road  corridor  is  also  located  on  a  modern-day  Silk  Road,  the  European  Route  E-60,  the 
second largest road corridor in Europe spanning from France to the Kyrgyz Republic, and an 
important route for regional and international trade. Alongside the World Bank, the EIB is 
financing a key section of the E-60 that currently presents a main bottleneck to trade. A loan 
of nearly EUR 50 million will provide the needed finance to renew 24 structures, including 
the bridges, tunnels and retaining walls. To support road safety, the design of the tunnels was 
guided  by  the  EC  Tunnel  Safety  Directive  and  a  road  safety  audit  was  undertaken  that 
follows the principles of the EU Road Safety Directive. 
At the same time, the EIB is financing a programme of projects to construct and rehabilitate 
around  250km  of  priority  sections  of  Georgia’s  road  network  to  further  enhance 
connectivity. In addition, the bank is financing the rehabilitation of the M6 Interstate road in 
Armenia  which  is  also  part  of  the  extended  TEN-T  network.  As  the  key  transit  road 
connecting central Armenia to Georgia, it is also complementary to the projects in Georgia in 
fostering  trade  links  and  regional  interconnections.  The  East-West  Highway  and  the  M6 
Interstate road projects together are expected to upgrade 236km of road lane, benefitting 10 
325 vehicles a day. 

3.5.  EIB additionality 

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

The ReM framework measures that “additionality” (Pillar 3), the difference between the EIB 
contribution  to  an  investment  project  and  standard  market  finance,  in  three  dimensions:  the 
adequacy of financial resources for the needs of projects; the EIB’s technical contribution; and 
the impact in terms of raising standards and facilitating contributions from other sources. The 
overall EIB additionality is rated on a scale of 1-Low, 2-Moderate, 3-Significant and 4-High, 
taking into account the three dimensions above. 

Using a refined methodology in 2016, the overall EIB contribution to 7 of 54 projects in the 
ELM regions have been rated as “4  - high” and to 39 as “3 - significant” (see Chart 6). The 
overall ratings were highest on average in the Eastern Neighbourhood where the contribution 
in terms of technical advice was particularly strong.  

25 

 
 
 
 
 
Chart 6: Additionality (Pillar 3) ratings – new projects 

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

7 

39 

11 

38 

0 

25 

29 

8 
0 
Pillar 3 rating

4 
1 
Financial
Contribution

0 
Financial
Facilitation

10 

13 

19 

12 

Advice

4 - High

3 - Significant

2 - Moderate

1 - Low

Note: Pillar three assesses the additionality of EIB involvement. The P3 rating aggregates the three sub-components: financial 
Instrument, standards and assurance and technical and sector contribution.  

Responding to financing needs 

The Results Measurement Framework tracks the contribution made by the financial conditions 
offered by the EIB. This includes blending with grants (subsidies), the provision of financing 
in  local  currencies,  and  the  length  of  the  loan  tenor  period  relative  to  the  local  market 
alternative, and the economic life of the investment financed.  

The tenor periods offered were rated very highly across financial instrument types, matching 
the  economic  life  of  the  investments  financed  in  the  great  majority  of  cases.  Relative  to 
alternatives  in  local  markets,  the  extension  of  tenor  was  substantial  for  both  infrastructure 
projects  and  credit  lines,  particularly  the  former  which  typically  involve  very  long-term 
investment.  Blending  EIB  loans  with  investment  grants  or  interest  rate  subsidies  is  also  an 
important contribution. The EIB was able to provide such subsidies for 9 projects, nearly all 
for infrastructure development, with 7 in the Eastern Neighbourhood. 

Catalytic effect  

The financial facilitation role of the EIB involvement in the ELM regions was rated on average 
to be moderate to significant – the EIB’s role in innovative financing and in helping to attract 
private sector finance tends to be stronger in the ACP region were local financial markets are 
often  less  well-developed.  Nonetheless,  29  ELM  projects  were  rated  significant  in  terms  of 
attracting  private  sector  finance,  while  7  ELM  projects  were  rated  significant  for  innovative 
financing, including for example the Ukraine DCFTA Support Facility which is the first EIB 
trade finance facility in the Eastern Neighbourhood.  

A  good  example  of  EIB’s  role  in  raising  standards  is  the  Georgian  Agri-food  Value  Chains 
credit  line  which  will  support  SMEs  in  agriculture  and  food  processing.  EIB  involvement  is 
ensuring higher standards both with regard to the eligibility of financial intermediaries and the 
environmental  and  social  screening  of  SMEs’  investment  projects.  A  technical  assistance 
component  is  also  likely  to  contribute  significantly  to  the  adaptation  of  EU  standards  in  the 
sector.  Overall,  EIB  financing  for  new  projects  in  2016  will  equal  42%  of  the  total  amount 
invested in projects, a multiplier of 2.38. 

26 

 
 
 
Providing advice  

The  EIB  contributes  technically  to  projects  both  in  terms  of  advice  on  financial  design  and 
structuring,  and  in  terms  of  advice  by  EIB  sector  experts  on  elements  of  the  projects 
themselves.  In  many  cases,  additionally,  a  high  technical  contribution  is  achieved  through  a 
specific grant-funded technical assistance component that EIB is able to help secure. In 2016, 
the Eastern Neighbourhood benefitted particularly from both financial and technical advice. In 
terms of instruments, the EIB technical contribution was higher for infrastructure projects than 
credit lines.  

Table  6:  EIB  Technical  and  Financial  Contribution  to  the  project  –  average  values  for 
different instrument types 

Loans for 
infrastructure 

Credit lines for 
SMEs and mid-
caps 

Number of projects 

EIB contribution - overall rating 

Overall rating 

(1) 

Subsidy (%) 

Subsidy (rating) 

Local currency funding (rating) 

Extension of tenor (%) 

Extension of tenor (rating) 

Match with economic life (%) 

Match with economic life (rating) 

Overall rating 

Innovative financing 

Attracting private sector financiers 

Working with public sector partners 

Raising standards 

Overall rating 

n
o
i
t
a
t
i
l
i

c
a
f

n
o
i
t
u
b
i
r
t
n
o
c

l

i

a
c
n
a
n
F

i

l

i

a
c
n
a
n
F

i

i

e
c
v
d
A

Financial advice & structuring 

Technical contribution & advice 

32 

3.1 

3.2 

2.2 

1.7 

1.1 

162 

3.3 

90 

3.7 

2.4 

1.4 

2.2 

2.4 

3.1 

2.8 

2.2 

2.9 

22 

2.9 

3.0 

0.2 

1.1 

1.1 

133 

3.5 

95 

3.9 

2.5 

1.5 

2.5 

3.1 

1.8 

1.5 

1.9 

Weighted average tenor provided (years) 

23.1 

10.1 

EIB  contribution  ratings  for  individual  projects:  4=  high;  3  =  significant;  2  =  moderate;  1  =  low.  The  above  table  shows  simple 
average  ratings  (or  %  values  where  appropriate)  across  projects.  For  rating  indicators,  shading  is  used  for  visual  clarity  only, 
based on average rating groups ≤1.4 (palest); 1.5 – 2.4 (pale); 2.5 – 3.4 (dark); ≥3.5 (darkest). 

Box 13: Technical assistance in action 

Armenia M6 Interstate Road – The EIB mobilised a Technical Assistance grant from the 

27 

 
 
 
 
 
 
 
 
 
 
 
 
Eastern  Partnership  Technical  Assistance  Trust  Fund  to  fund  the  feasibility  and  design 
studies, as well as the Environmental Impact Assessment.  

technical  assistance  for  capacity-building,  helping  DAMU  and 

DAMU Green loan for SMES and Mid-caps, Kazakhstan – The EIB will provide DAMU 
with 
the  financial 
intermediaries 
the  bank’s  eligibility  criteria  concerning  climate 
change/environmental  protection  measurement  methodologies,  as  well  as  environmental, 
social and procurement standards. 

implement 

to 

Bizerte  Bridge,  Tunisia  –  EIB  advisory  services  supported  project  preparation  and  the 
bank’s projects department is providing technical support to implementation. 

4. 

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

The ReM framework provides an assessment of the EIB financing operations throughout their 
lifecycle.  It  helps  to  select  sound  projects  which  are  in  line  with  Union  priorities  based  on 
concrete results, and where the EIB involvement will add value. At appraisal, results indicators 
are  identified,  with  baselines  and  targets  that  capture  expected  economic,  social,  and 
environmental outcomes of the operation. Performance against those benchmarks is monitored 
throughout  the  project  life  and  reported  at  two  major  milestones:  For  direct  investments, 
results are reported at project completion and again 3 years after completion. For intermediated 
operations results are reported at the end of the allocation period (credit lines) or at the end of 
the investment period (funds). Equity fund results are reported again at the end of life of the 
fund.  

To the extent possible, ReM indicators have been harmonised with those of other IFIs, EDFIs 
and  EU  development  agencies  to  simplify  client  reporting  requirements  for  co-financed 
operations. The EIB continues to be actively engaged in working with these partners to further 
improve  coordination  and  harmonisation  of  results  indicators.  Pillar  ratings  are  based  on  a 
four-point  scale  (4-excellent,  3-good,  2-acceptable,  1-marginal)6  .  At  project  appraisal  stage, 
clear,  sector-specific,  standardised  and  measurable  indicators  are  identified  and  projects  are 
rated according to three ‘pillars’. 

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

28 

 
 
 
 
 
 
 
 
 
 
                                                            
Chart 7: ReM Framework 

The  “new  projects”  reported  in  the  section  on  project  results  are  those  for  which  the  first 
financing contract was signed in 2016. For each of these projects, the full approved financing 
volume  and  the  expected  results  associated  with  this  expected  lending  are  reported.  This 
covers both the amount “signed” in 2016 and any approved balance planned to be signed under 
future contracts.  

To  avoid  double  counting  of  project  results,  the  results  associated  with  follow-up  contracts 
signed  under  projects  that  have  already  been  reported  in  previous  reports  (because  earlier 
financing  contracts  were  signed  under  them  in  previous  years)  are  not  reported  above. 
However, for the sake of transparency, a break-down of 2016 lending volumes, including the 
volume of such follow-up contracts, is given in Table 7.  

This  methodology  is  different  from  that  used  in  the  reports  before  2014.  For  that  reason 
lending volumes and project counts may not always be strictly comparable. 

29 

 
 
 
 
 
 
 
 
 
 
 
 
 
Table 7.1: 2016 lending volumes (EUR m) 

New projects (first signed in 2016) 

Funding 
approved 

Contracts 
signed in 
2016 

Volume to 
be signed 

1188 
2 026 
1 396 
2 674 

943 
1 616 
1 336 
1 933 

3 702 

2 829 

3 583 

2 999 

250 
413 
69 
746 

884 

593 

Older projects 
(first signed 
before 2016) 
Contracts signed 
in 2016 

Total 
contracts 
signed in 2016 

41 
1 
249 
722 

554 

458 

984 
1 616 
1 585 
2 655 

3 383 

3 457 

1 874 

1 555 

323 

367 

1 921 

ALA 
EAST 
MED 
PA 
South Africa 
Local private sector 
development 

Development of 
social and economic 
infrastructure 

Climate change 
mitigation and 
adaptation   

Regional integration 

1 560 

1 324 

240 

501 

1 012 

1 824 

6 840 

Total 

7 284 

5 828 

1 477 

Table 7.2: Total investment cost for new projects first signed in 2016 

Pillar 1 checks eligibility under EIB mandates and rates the contribution to the EU and 

Under the ReM Framework, projects are rated at the time of Board approval according to three 
pillars:   
• 
country priorities. 
• 
• 
alternative. 

Pillar 2 rates the quality and soundness of the operation, based on the expected results. 
Pillar 3 rates expected EIB financial and non-financial additionality, beyond the market 

30 

Total Investment Cost (in EUR m)ALA3,042EAST4,244MED2,836PA6,844South AfricaTotal16,966 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratings  are  based  on  a  series  of  objectively  measureable  indicators  and  guidelines,  while  a 
process  of  quality  control  ensures  that  all  ratings  are  checked  for  consistency  across 
operations. 

Chart 8: ReM ratings by pillar for new operations signed in 2016 

Pillar 1 

In 2016, all new projects were rated at least “good” under Pillar 1, signifying that they are in 
line  with  Mandate  objectives  and  make  a  high  contribution  to  either  national  development 
objectives  or  those  of  the  EU,  and  a  moderate  contribution  to  the  other.  19  were  rated 
“excellent”  for  making  a  high  contribution  to  both  EU  priorities  and  national  development 
objectives.  

Pillar 2 

The  Pillar  2  rating  is  based  on  project  soundness,  financial  and  economic  sustainability  and 
environmental  and  social  sustainability  in  the  case  of  directly  financed  projects.  For 
intermediated  operations,  the  rating  is  based  on  the  expected  results,  weighted  by  risk 
considerations  as  measured  by  the  soundness  of  the  intermediary  and  the  quality  of  the 
operating  environment.  50  projects  were  rated  “good”  under  Pillar  2,  with  an  average 
economic rate of return (ERR) of 10% to 15% in the case of infrastructure projects. 4 projects 
received  an  “acceptable”  rating,  often  because  of  high  risk  environments  that  impact  on  the 
probability  of  achieving  planned  results.  These  include  projects  in  Ukraine  and  Kyrgyz 
Republic. 

31 

 
 
 
 
 
 
 
 
 
Chart 9: Pillar 2 ratings by sector 

Environmental  and  social  impacts  are  also  assessed  under  Pillar  2,  for  infrastructure  and 
industrial private sector projects. The rating is based on both the nature of the impacts and the 
magnitude  of  risks.  This  thus  includes  an  underlying  assessment  of  the  robustness  of 
arrangements to mitigate risks. Projects are rated on a scale of:  
1.  Marginal: Not Acceptable, for environmental and/or social reasons – not suitable for EIB 

financing. 

2.  Acceptable: Acceptable with major negative residual environmental and/or social impacts. 
3.  Good: Acceptable with minor negative residual environmental and/or social impacts. 
4.  Excellent:  Acceptable  with  positive  or  neutral  residual  environmental  and/or  social 

impacts. 

Chart 10: Average environmental and social ratings by sector 

Ratings for the assessed projects in the ELM regions ranged from “2” (4 projects) to “3” (19 
projects). Sector average ratings were similar across most sectors at around 3. The two hospital 

32 

 
 
 
 
  
 
projects are notable for having only a “2 – Acceptable” rating link to the fact that construction 
is taking place on greenfield sites.  

Pillar 3 ratings are presented in the chapter on additionality.  

5. 

COOPERATION WITH THE COMMISSION  

5.1 The ELM mid-term review 

Article 19 of the ELM Decision stipulates that by end  2016, the EC, in cooperation with the 
EIB, shall submit to the EP and the Council a mid-term report evaluating implementation of 
the ELM in the first years, accompanied, where appropriate, by a proposal for its amendment. 

In  early  2016,  the  Commission  appointed  an  external  consultant  to  carry  out  the  evaluation. 
The  EIB  was  involved  and  invited  by  the  Commission  to  participate  as  an  observer  to  the 
Steering  Committee  responsible  for  leading  the  evaluation.  In  addition,  a  broad  range  of 
departments  of  the  Bank  were  interviewed  by  and  provided  information  to  the  consultants 
throughout their information gathering and analysis. Further, as required by the ELM decision, 
EIB provided the Commission with a detailed report on its own contribution to the ELM mid -
term review.  

The next steps are working to review the guarantee agreement and if necessary the recovery 
agreement, as well as update the Regional Technical Operational Guidelines (RTOGs). 

5.2 The EIB implementing the EU Global Strategy and the New European consensus for 
Development 

5.2.1 The EIB and the EU global Strategy 

The  EU  Global  Strategy  (EUGS),  adopted  in  June  2016,  provides  a  vision  for  Europe’s 
engagement with the world. The EUGS explicitly recognises that the EU’s objectives beyond 
its borders can be best met through enhanced coordination and joint action between “the EU, 
Member States and the EIB”.  

5.2.2 The EIB implementing the New Consensus for Development 

Following  a  public  consultation,  to  which  the  EIB  contributed,  the  Commission  tabled  a 
proposal  for  a  new  European  Consensus  on  Development  on  22  November  2016.  The  new 
Consensus  seeks  to  incorporate  and  adapt  to  the  2030  Agenda  and  all  17  Sustainable 
Development  Goals  (SDGs),  balancing  the  economic,  social,  environmental  dimensions  of 
sustainable  development.  It  is  structured  around  the  five  core  themes  of  the  2030  Agenda: 
People, Planet, Prosperity, Peace and Partnership.  

The Commission proposal foresees that the new Consensus will provide the framework for a 
common  approach  to  development  policy  shared  by  and  applied  by  the  EU  and  its  Member 
States.  Agenda  2030  will  be  implemented  through  shared  analysis,  common  strategies,  joint 
programming, joint action and improved reporting to increase the credibility, effectiveness and 
impact of EU and Member States development cooperation. 

33 

 
 
 
The  revision  of  EU  development  policy  to  incorporate  the  2030  Agenda  provides  an 
unprecedented  opportunity  for  the  EU  to  redefine  how  it  works  together,  ensuring  better 
coordination of the full range of EU expertise and resources to the benefit of all countries. The 
2030  Agenda  is  well  aligned  with  the  EIB  mandate  and  core  areas  of  activity.  Indeed,  as 
outlined in the current report, EIB is actively contributing on a number of priorities identified 
in  the  proposal  for  a  new  Consensus  notably  development  and  the  SDGs,  but  also  climate 
action, migration and mobility, sustainable growth and jobs, trade and economic prosperity.  

Pursuant  to  Article  209  (3)  TFEU,  the  EIB  has  a  Treaty-based  obligation  to  support  EU 
development  policy,  rendering  the  Bank  the  natural  partner  of  the  EU  institutions  and  EU 
Member States in the delivery thereof. The new comprehensive approach is fully in line with 
EIB’s  core  expertise  and  mandate,  and  the  EU  Bank  will  contribute,  through  its  instruments 
and  products  to  the  implementation  of  this  renewed  development  policy.  The  objective  is  to 
ensure  coherence  and  complementarity  at  EU  level,  to  allow  for  enhanced  efficiency  and 
performance of EU funding. 

5.3 EIB external offices and decentralised cooperation with EC and EEAS 

5.3.1 External offices 

Figure 1: EIB external offices in the regions covered by the ELM guarantee 

34 

 
 
 
The EIB has several external offices in the regions covered by the ELM guarantee. This helps 
to  make  the  Bank  more  visible  and  more  responsive  at  local  level,  enabling  greater  contact 
with potential and existing borrowers, as well as with a broad range of public, local authority 
and business stakeholders. 

The EIB and EEAS have taken forward the principle of co-location of EIB offices within EU 
Delegations. New EIB external offices have been located in Delegations. The office in Beijing, 
previously opened, was formally inaugurated on 30 May 2016, during EIB President Werner 
Hoyer’s official visit to China. The opening of their office in Beijing, which covers China and 
Mongolia, is a reflection of EIB commitment to strengthen their presence in the two countries, 
and  the  goal  of  the  office  is  to  promote  the  Bank’s  mission  and  support  its  activities  in  line 
with the objectives of the EIB Group. 

In addition, in the first quarter of 2017, the office in New Delhi, India will be inaugurated. 

5.3.2 Regional cooperation with EC and EEAS 

The  EIB  continued  to  strengthen  its  coordination  with  DG  NEAR,  DG  DEVCO  and  the  EU 
Delegations,  as  requested  in  the  ELM  mid-term  review  evaluation  report.  Joint  EIB/EC 
initiatives  ensured  greater  visibility  of  EU  support  throughout  the  region  and  enhanced 
cooperation  along  the  EIB  project  and  EC  programming  cycles.  The  inclusion  of 
communication components in the new delegation agreements signed between EIB and the EC 
to implement programme such as the DCFTA East initiative in Ukraine, Moldova and Georgia 
are  facilitating  much  closer  cooperation  and  coordination  on  communication  and  visibility 
events and products.  

These efforts were supported by the instigation of more systematic consultations between DG 
NEAR,  EEAS  and  the  EIB  on  a  regional  basis.  This  includes  regular  meetings  between  the 
Brussels  office  and  officials  in  the  EC  and  EEAS  as  well  as  more  regular  ad  hoc  meetings 
between  directors  of  the  two  institutions.  Of  particular  note  is  the  organisation  of  “regional 
days” where DG NEAR, line DGs and EEAS meet with EIB on a specific region. A one-and-
a-half  day  meeting  focused  on  the  Eastern  Neighbourhood  was  held  in  Luxembourg  in 
September and the DG NEAR/EIB Regional Day Neighbourhood South was held in October. 
The EIB also participated in the DG NEAR IFI Workshop in November 2016, and is actively 
participating  in  the  DG  NEAR  led  initiative  to  boost  activities  in  energy  efficiency  in  all  its 
regions  (Western  Balkans,  Eastern  and  Southern  Neighbourhood).  These  Brussels  and 
Luxembourg  meetings  complement  the  regular  EIB  meeting  and  events  with  local  EU 
Delegations, like the DG NEAR / EIB Ukraine Day in Kiev. 

5.4  Commission  and  EIB  partnerships  in  the  regions  covered  by  the  external  lending 
mandate 

Cooperation between the Commission and the EIB is daily and pervasive throughout much of 
the EIB activities. A substantial part of operational cooperation and coordination between the 
Commission  and  the  EIB,  involving  also  other  IFIs  and  European  Bilateral  Financing 
Institutions,  takes  place  within  the  various  regional  blending  mechanisms  set  up  by  the 
Commission 
("WBIF"), 
Neighbourhood  Investment  Facility,  Asia  Investment  Facility  ("AIF"),  Latin  America 
Investment Facility and Investment Facility for Central Asia ("IFCA"). 

Investment  Framework 

the  Western  Balkans 

including 

35 

 
 
The figure below presents the EIB lending outside the EU.  

Figure 3: EIB financing outside the EU in 2016 

5.4.1 Pre-accession countries 

5.4.1.1 Turkey 

EIB operations signed in 2016 and key realisation 

Operating in Turkey since the 1960s, the EIB is the largest international financier in Turkey, 
with current annual lending volumes of the order of +/- EUR 2bn. Part of the EIB’s lending in 
Turkey is backed by the guarantee provided by the EU under the External Lending Mandate. 
Turkey continues to be the largest recipient country of EIB funds outside the Union.  

2016  lending  amounted  to  EUR  2.2bn,  of  which  slightly  above  10%  was  under  the  ELM. 
Support for SMEs & Midcaps contributed most to EIB lending in Turkey in 2016 amounting 
to EUR 1.6bn, which demonstrates EIB’s active support to the country’s main job providing 
sector.  In  2016,  EIB  continued  to  provide  financing  in  support  of  essential  infrastructure 
sectors, including sustainable urban transport (EUR 250m), energy (EUR 230m), health (EUR 
170m) and transport (EUR 70m). The Bank signed its first PPP operation in the health sector 
in Turkey in 2016 to support the Gaziantep hospital campus near the Syrian Border (see Box 
13).  

EIB  lending  under  the  own  risk  Pre-Accession  Facility  increased  strongly  in  2016.  This 
development  is  to  a  large  extent  due  to  an  increased  volume  of  SME  related  lending  to  the 
Turkish banking sector. Similar to 2015, 2016 was a strong year for disbursements to SMEs & 
Midcaps  by  their  financial  intermediaries:  about  EUR  1.2bn  were  disbursed  under  SME& 

36 

 
 
 
 
Midcap  credit  lines  in  favour  of  production  expansion  and  modernization  investment  by 
Turkish SMEs and Midcaps. 

The EIB closely cooperates with the European Investment Fund (EIF) in Turkey. The EIF has 
been  active  in  Turkey  since  2005,  supporting  private  equity  funds  investing  in  Turkey  and 
providing guarantees and securitisation – for example through the management of the Greater 
Anatolia Guarantee Facility. In 2016, EIF committed EUR 128m in equity and EUR 102m in 
guarantee operations, which aim to mobilise EUR 2.2bn and EUR 174m respectively. In 2016, 
the Turkish Growth Innovation Fund advised by the EIF completed its first three investments 
and  the  first  guarantee  transactions  under  the  EU’s  COSME  and  Erasmus+  Master  Student 
Loan Guarantee Facility in Turkey were signed. 

Trends for 2017 

In 2016, significant efforts were made to develop EIB lending prospects for 2017 and beyond, 
particularly in large flagship infrastructure projects, many of which are projects of EU interest. 
The  Bank  is  currently  appraising  flagship  energy  projects  in  Turkey  for  gas  storage  and 
pipeline  infrastructure  (TANAP)  which  aims  to  transport  natural  gas  from  Azerbaijan  to 
European markets. The Bank is also evaluating the opportunity to co-finance with the EC the 
railway connection to the Bulgarian border, which would modernise and develop the railway 
connection  from  Istanbul  to  the  Bulgarian  border  and  would  complete  the  missing  link 
between  Turkey’s  rail  and  TEN-T  (Corridor  IV).  Once  materialized,  these  financings  will 
significantly increase the share of the ELM backed financing in overall EIB lending operations 
in the country.   

For  2017,  innovative  financing  will  be  a  particular  area  of  focus  for  the  EIB.  The  EIB 
financing to support innovative enterprises in Turkey will be combined with an EIF Guarantee 
under the InnovFin programme and will be implemented in the context of EIB’s participation 
to covered bond issues of their private banking partners.  

Finally,  the EIB  Group  is  in  close  contact  with  Turkish  authorities, the  Commission  and  the 
EU  Delegation  in  Ankara,  on  defining  the  following  operations  contributing  to  the  EU’s 
Refugee Crisis agenda: 

• 
Financing  of waste water  and  solid waste infrastructure investments of  municipalities 
along  the  Syrian  border  through  the  EIB’s  banking  intermediary  in  the  municipal  sector 
(ILBANK) (cf. box below). 

Support  for  Microenterprises  and  SMEs  located  in  these  cities,  e.g.  to  expand 

• 
production capacity and create employment opportunities. 

Inter-institutional cooperation 

To date, EIB lending combined with the IPA funds made available for Turkey has significantly 
contributed  to  strengthening  the  impact  of  the  EU  support.  In  the  2014-2020,  IPA  2 
programming period, the EIB is actively seeking to intensify further its cooperation with the 
EU, particularly with the EU Delegation and local managing authorities in the environmental 
sector and urban transport.  

37 

 
 
After  a  long  preparatory  phase, the  EIB  helped to  bring  JASPERS  to  Turkey.  Following  the 
first  kick-off  meeting  in  the  fall  of  2015  for  the  environmental  sectors,  experts  have  been 
working  with  the  Ministry  of  Environment  and  the  EU  Delegation  (4  visits  in  2016)  on  a 
portfolio  of  6  projects  with  the  aim  of  speeding  up  absorption  of  some  EUR  150  m  IPA  2 
funds  in  the  water,  wastewater  and  solid  waste  sectors.  Discussions  are  ongoing  to  expand 
JASPERS to the transport sector. The climate change (renewable and energy efficiency) is also 
a  potential  field  where  EIB-EU  blending  mechanisms  could  be  developed  in  Turkey. 
Moreover,  the  EIF  is  working  on  designing  and  managing  new  financial  instruments  under 
IPA 2, mostly in supporting equity investments for regional competitiveness, better access to 
education and to inclusive finance as well as supporting agricultural investments.  

In 2016, dedicated refugees facilities have gained momentum: the EIB Group had intensified 
cooperation with  the  EC  and  the  EUD  in  Ankara  to  manage  grants  from  the  EU  Trust  Fund 
(EUTF or the MADAD Fund) and the Facility for Refugees in Turkey (FRiT).   

Box 15: EIB’s response to the refugee crisis in Turkey 

The EIB Group’s operational response to the Syrian refugee crisis in Turkey is composed of 
two streams: (i) financing waste and water municipal infrastructure investments alongside the 
Syrian border through EIB’s banking intermediary in the municipal sector, ILBANK. The EIB 
will implement the Municipal Resilience Facility I (MRF I) under the EUTF whereby it will 
manage  EUR  70m  grants  for  Technical  Assistance  (project  preparation,  supervision)  and 
investments  (project  implementation)  to  realise  8-10  projects  located  in  Southern  Eastern 
provinces of Turkey,  heavily affected by the Syrian Refugees  influx. Similarly,  the EIB will 
implement the Municipal Resilience Facility II (MRF II of EUR 50m grants), scaling up MRF 
I to a larger pipeline of water and wastewater and solid waste projects under FRiT. (ii) support 
for  Microenterprises  and  SMEs  located  in  these  cities.  The  EIB  Group  proposal  -Greater 
Anatolia  Guarantee  Facility  for  Resilience  (GAGFR)  -  will  support  Micro-enterprises  and 
SMEs  through  EIB  SME  loans  and  EIF  guarantees,  and  increase  occupational  and 
entrepreneurship  skills  of  the  refugee  community.  EUR  25m  grants  are  allocated  for  this 
project to the EIF under FRiT. 

5.4.1.2 Western Balkans 

EIB Operations signed in 2016 and key realisation 

The  EIB  is  among  the  leading  international  financiers  in  the  Western  Balkans,  having  been 
active in the region since 1977. In 2016, new signatures in the region amounted to EUR 427m, 
bringing  the  total  amount  financed  over  the  past  10  years  to  EUR  7.2bn.  The  2016  split  of 
operations was at EUR 196m in Serbia, EUR 130m in Bosnia and Herzegovina, EUR 56m in 
Montenegro and EUR 45m in the former Yugoslav Republic of Macedonia respectively. These 
interventions  support  the  EU’s  objective  of  helping  the  countries  on  their  paths  towards 
accession and rapid integration into the Union.  

In  2016,  the  majority  of  the  Bank’s  activity  focused  on  financing  the  development  of  the 
private  sector.  In  Serbia,  two  loans  totalling  EUR  170m  were  signed  to  support  small  and 
medium-sized  enterprises  (SMEs),  midcaps  and  infrastructure  schemes  promoted  by  local 

38 

 
 
 
authorities.  In  addition,  a  EUR  26m  loan  was  signed  for  the  modernization  of  judiciary 
facilities in Belgrade and throughout the country.  

In Bosnia and Herzegovina, three loans were signed for a total of EUR 65m in order to support 
small  and  medium-sized  projects  promoted  by  SMEs,  mid-caps  and  other  private  or  public 
sector  entities.  The  Bank  also  signed  two  infrastructure  loans  totalling  EUR  65m  in  the 
country.  This included a EUR 50m loan to  modernize the national road network and a EUR 
15m loan for the reconstruction of the Banja Luka clinical centre and the construction of a new 
hospital in Bijeljina. 

In  Montenegro,  a  EUR  30m  loan  was  signed  to  support  small  and  medium-sized  projects 
promoted  by  SMEs,  mid-caps  and other  private  or  public sector entities.  In  addition,  a  EUR 
25.50m  loan  was  signed  for  the  rehabilitation  and  construction  of  water  and  waste  water 
infrastructure of municipalities. The project will help to bring Montenegro closer to the EU’s 
environmental standards, improving environmental services, reducing public health risks and 
enhancing the region's attractiveness for tourism, a valuable economic activity. 

Lastly, in the former Yugoslav Republic of Macedonia, a EUR 35m loan was signed for the 
construction  of  a  new  28-km  motorway  section  on  the  Pan-European  Corridor  X  between 
Demir-Kapija  and  Smokvica  in  the  country.  A  further  EUR  10m  was  signed  for  small  and 
medium-sized  projects  promoted  by  SMEs,  mid-caps  and  other  private  or  public  sector 
entities. 

Trends for 2017 

The  Economic  Resilience  Initiative  (ERI)  will  be  a  key  priority  for  EIB  financing  in  the 
Western  Balkans.  This  initiative  aims  to  boast  economic  resilience  in  the  Southern 
Neighbourhood  and  the  Western  Balkans,  also  in  the  context  of  the  migration  challenge,  by 
upgrading and developing social and economic infrastructure and stimulating growth and job 
creation. There will be a particular focus on developing the projects in the private sector (BB3) 
to diversify the portfolio and have a bigger impact on the resilience of the target countries. In 
the  context  of  the  Western  Balkans,  ERI  projects  will  focus  on  the  development  of 
Connectivity, small and medium-sized enterprises and social sectors respectively.  

Inter-institutional cooperation 

Since 2009, the EIB, the European Commission, KfW and the EBRD have been cooperating 
under the Western Balkans Investment Framework (WBIF). This provides a joint grant facility 
and a joint lending facility for priority investments in the region. The objective is to simplify 
access  to  credit  by  pooling  and  coordinating  different  sources  of  finance  and  technical 
assistance, with a focus on infrastructure sectors, including social infrastructure. In 2016, EUR 
132.3m of assistance (investment grants, guarantees, technical assistance) was provided under 
the  WBIF.  Of  the  EUR  132.3m  total,  the  EIB  was  the  lead  IFI  for  EUR  53.2m  of  WBIF 
assistance provided respectively. 

39 

 
 
 
 
 
5.4.2 Mediterranean countries 

EIB Operations signed in 2016 and key realisations 

The Bank’s operational plan for the Southern neighbourhood for 2016 remained focussed on 
the ELM priorities including private sector development, social and economic infrastructure as 
well  as  climate  change.  The  EIB  has  delivered  well  on  this  plan,  with  close  to  EUR  1.6bn 
signed  for  16  new  operations  in  the  region.  The  year  showed  a  market  shift  in  focus,  as  12 
operations and two thirds of the lending volume was dedicated to the private sector, including 
credit  lines  in  support  of  SMEs  in  Egypt,  Morocco  and  Tunisia.  Indeed,  the  EIB  is  already 
stepping up its lending and support to the private sector as part of its ERI commitment. The 
Bank has also stepped up its direct support to the corporate sector with three operations located 
in Tunisia and Israel.   

Accounting for 7 projects and some 25% of total lending, the environmental sector was a key 
focus in 2016. This included infrastructure projects such as the Cairo Metro phase 3 of line 3 
and  the  expansion  of  rolling  stock.  The  Depolmed  project  concerns  the  rehabilitation  and 
extension  of  waste  water  treatment  plants  and  sewerage  networks  located  in  coastal  areas  of 
Tunisia. The project is co-financed with AFD and benefits from a contribution of the NIF. The 
investments  will  contribute  to  the  preservation  of  the  Tunisian  littoral;  improve  living 
conditions  of  the  local  population  and  reduce  the  pollution  of  the  Mediterranean  Sea.  The 
Bank has also reinforced its co-operation with its banking partners to cover the environmental 
sector: (i) The FEMIP Sustainable Energy Facility (with BMCE and BCP) will finance energy 
efficiency  and  small  renewable  energy  investments  in  the  private  sector  in  Morocco;  (ii) 
BMCE Ligne Verte is a co-financing with FMO to finance projects by private promoters in the 
waste  management  sector  in  Morocco.  The  GCT  mise  à  niveau  environmentale  project 
concerns  the  upgrading  of  Groupe  Chimique  Tunisien's  production  facilities  aimed  at 
improving environmental protection in Skhira and M’Dhilla near Gabès. 

Another focus of attention was the SME sector in Egypt, Tunisia and Morocco, representing 
some  50%  of  total  lending.  Support  to  the  corporate  sector  was  also  on  the  increase  for  3 
projects in Tunisia and Israel and close to 15% of the lending volume. They entail 2 operations 
under InnovFin, the financing tools offered by the EIB Group covering the value chain of R&I 
under  Horizon  2020  also  in  Associated  Countries.  The  2016  InnovFin  projects  include  the 
financing  of  the  R&D  activities  related  to  specialty  chemicals  of  ICL  in  Israel  and  Tunisie 
Telecom’s roll-out of mobile 4G access networks to connect 1.1 m customers. 

The largest recipient country of EIB lending in the region was in Egypt, with EUR 890m of 
loans for SMEs and urban transport, energy and SMEs. Tunisia came second with EUR 408m. 
During  the  Investment  Conference  Tunis  2020  in  November  2016,  the  Bank  underlined  its 
commitment  to  the  democratic  process  in  the  country  by  signing  5  contracts  including  the 
financing  of  Pont  de  Bizerte,  one  of  the  priority  projects  of  the  2016-2020  Tunisian 
Development  Plan,  as  well  as  further  financings  in  the  field  of  energy,  SME  financing  and 
corporate lending.   

In 2016, the Bank signed two NIF contributions in Jordan, NEPCO Green Corridor and Wadi 
Al Arab, with a total amount of around EUR 31 Mio. This contributed to a new record high 
volume for NIF grant funding entrusted to EIB in the neighbourhood regions (East and South) 
in one year. The type of support awarded by NIF in the Southern Neighbourhood focused on 

40 

 
 
Investment Grants (around EUR 28m) accompanied in one project - NEPCO - by a Technical 
Assistance (EUR 2,7m). 

The  general  objective  of  the  NEPCO  project  is  to  strengthen  the  Jordanian  high  voltage 
electricity transmission backbone, enabling the connection of large amounts of new renewable 
generation to the network, and transmit electricity from central desert areas to Amman, where 
generation  is  fossil-fuel  based.  The  Project  thereby  contributes  to  carbon  dioxide  emission 
reduction. The Wadi Al Arab project will cover a pressing need in the northern governorates of 
Jordan and forms part of the National Water Strategy aimed at optimizing water distribution 
across the country. It consists of a new water intake facility from the King Abdullah Canal, a 
treatment plant, pumping facilities and a transmission pipeline to the Zabda Reservoir on  the 
western  side  of  the  City  of  Irbid.  The  system  will  provide  an  additional  30  million  cubic 
metres per year to the Irbid Governorate. 

Cooperation with others 

Finally,  throughout  the  year,  the  EIB  continued  and/or  renewed  its  collaboration  with  other 
IFIs / BFIs including AFD, EBRD and KfW active in the region in terms of the co-financings 
of the above described projects. Work with other institutional partners in particular the Union 
for the Mediterranean continued throughout the year. Some of the UfM led initiatives to which 
EIB contributed in 2016 include the third Union for the Mediterranean Ministerial Conference 
on Employment and Labour in September in Jordan and the 2nd UfM Regional Conference of 
Governance & Financing for the Mediterranean Water Sector in Tunis in December 2016. 

Finally, in July 2016, the Bank organised, together with EBRD and WB, the first presentation 
of “What’s Holding Back the Private Sector in MENA? Lessons from the Enterprise Survey“. 
The  formal  private  sector  in  the  Middle  East  and  North  Africa  economies  needs  to  play  a 
critical role for the overall economic transformation of the region.  

Trends for 2017 

In 2017, the lending activity of EIB in the Southern Neighbourhood will be enhanced in the 
context of the weak economic outlook for the region and the refugee crisis, which have lead 
the European Council to invite the EIB to step up its lending to the region and to endorse the 
Bank’s  proposed  Economic  Resilience  Initiative  covering  the  Southern  Neighbourhood  and 
Western Balkans. The full implementation of the ERI will not only lead to a volume increase 
of some 50-60% in the years ahead compared to recent results, but will also impact the project 
mix.  

In this context, the Bank expects to continue its increased focus on private sector development, 
with  a  further  strengthening  of  its  SME  support  as  well  as  a  continued  effort  to  expand 
corporate  lending.  The  other  main  focus  will  be  on  the  reinforcement  of  the  enabling 
environment  to  stimulate  growth  by  continued  support  for  investments  in  transport,  energy 
(including renewables and energy efficiency) and the environment. Within the transport sector, 
the Bank is increasingly focusing on urban transport which is a major challenge throughout the 
region  characterised  by  rapidly  increasing  urbanisation.  The  Bank  has  also  reinforced  its 
pipeline of wastewater projects, as the Mediterranean Sea remains under severe pressure from 
pollution.  Finally,  the  Bank  also  expects  to  finalise  one  to  two  education  infrastructure 
projects, thereby strengthening human capital potential in the region. 

41 

 
 
5.4.3 Eastern Europe, Southern Caucasus and Russia 

EIB Operations signed in 2016 and key realisation 

EIB  lending  volumes  in  the  Eastern  Neighbourhood  continued  to  increase  and  the  Bank 
became one of the main financiers in the region. 2016 lending amounted to EUR 1.6 bn, which 
is the highest amount ever extended by the EIB in the Eastern Partnership countries, of which 
100%  was  under  the  ELM.  Support  to  transport  infrastructure  represented  EUR  750m, 
demonstrating the EIB’s active role to support transport connectivity in the region as well as 
sustainable transport. EIB financing in 2016 also supported other crucial sectors, such as local 
private sector development, as well as energy, municipal and social infrastructure. 

A further important achievement in 2016 was that 41% of signatures supported climate action. 
The  main  contributors  to  this  target  were  operations  in  sustainable  transport  and  energy 
efficiency with the remainder coming from credit lines. This reflects the potential to reduce the 
energy intensity of economies in the region  and the role which EIB plays by stepping up its 
financing  and  advisory  support  in  that  field.  As  a  flagship  project,  EIB  is  supporting  energy 
efficiency with a EUR 120m loan, to refurbish teaching, research and supporting facilities at 
several universities across Ukraine. 

Similarly, EIB financing targeted energy interconnections to help partner countries to reduce 
energy dependency  and to  bolster their resilience. This included a EUR 41m loan to finance 
the Ungheni-Chisinau gas pipeline between Moldova and Romania.  

The  Bank  has  continued  to  support  local  private  sector,  both  through  intermediated  lending 
and direct loans. Loans for SMEs and Mid-Caps accounted for 26% of the EIB’s lending in the 
region  in  2016.  In  this  context,  the  EIB  signed  a  programme  to  support  the  development  of 
domestic  agro  industries  in  Georgia  based  on  the  value  chain  concept.  The  EIB  is  also 
supporting larger agricultural companies with direct investment loans. In 2016, the EIB agreed 
to  provide  EUR  71m  to  finance  the  investment  plan  of  Nibulon,  a  major  privately  owned 
Ukrainian grain producer and exporter. The EIB and EC signed a Delegation Agreement under 
the  “DCFTA  Initiative  East”,  funded  by  the  Neighbourhood  Investment  Facility  (NIF):  this 
initiative will provide targeted financial and technical support in the countries that signed the 
Association Agreement with the EU, in order to facilitate wider access to finance for SMEs. 

The EIB group deployed the “Innovfin – EU Finance for Innovators” programme in associated 
countries  in  the  region  under  the  Horizon  2020  (Armenia,  Georgia,  Moldova,  Ukraine) 
providing  a  series  of  integrated  and  complementary  financing  tools  and  advisory  services 
offered by the EIB Group, targeting investments in research and innovation. 

Lending to Ukraine continued to be a dominant feature of EIB activities in the region in the 
context of the EU support package for Ukraine. The EIB fully delivered on its commitment: 
over the period 2014-2016, the EIB group signed 15 transactions totalling more than EUR 3 bn 
targeting  a  wide  range  of  sectors  and  provided  substantial  advisory  support  alongside  its 
financing.  In  order  to  implement  the  package of  loan  operations  in  the  difficult environment 
prevailing  in  Ukraine,  EIB,  closely  collaborating  with  the  Ukrainian  authorities,  set  up  a 
dedicated  Task  Force,  including  additional  expert  staff  in  the  Kiev  Representative  office,  to 
deliver  a  targeted  approach  to  ensure  accelerated  project  preparation  and  implementation  of 

42 

 
 
investments.  The  EIB  also  delivered  in  2016  a  record  level  of  financing  for  projects  in 
Georgia. 

In 2016, three NIF contributions for a total amount of around EUR 74m were contracted in the 
Eastern Neighbourhood, one in Georgia (Kutaisi Wastewater Project), one in Ukraine (Ukraine 
Railway Modernisation) and one regional programme (the aforementioned “DCFTA Initiative 
East”).  Since  the  NIF  is  not  only  a  mechanism  for  allocation  of  funding  but  also  for 
cooperation  with  other  IFIs,  this  record  high  volume  for  NIF  grant  funding  underlines  the 
growing  importance  of  good  cooperation  with  the  Commission  and  partner  institutions.  The 
traditional  focus  in  terms  of  number  of  projects  supported  continues  to  be  on  Investment 
Grants  and  Technical  Assistance.  The  large  increase  in  the  volume  of  contracted  funding, 
however, is due to the one regional programme of high political relevance which includes two 
Financial Instruments. 

The  objective  of  the  Kutaisi  Wastewater  Project  in  Georgia  is  to  address  environmental 
problems by improving and extending the wastewater collection system and by construction of 
a  mechanical-biological  wastewater  treatment  plant  with  nutrient  removal.  The  Ukraine 
Railway  Modernisation  Project  targets  the  electrification,  along  with  the  modernisation  of 
signalling and telecommunication systems. 

Trends for 2017 

In 2017, the EIB will continue supporting investments in the region aligned with key priority 
areas established between the EU and Eastern Partnership countries. Also, implementation of 
loan operations and instruments committed recently will deliver tangible results for citizens. 

Belarus became an eligible country under the ELM by a Delegated Decision of the European 
Commission  which  came  into  force  on  26  September  2016.  Following  the  signature  of  a 
framework  agreement  between  the  Republic  of  Belarus  and  the  EIB,  expected  in  2017,  the 
Bank will consider providing financing to support investment priorities in the country. 

As of end 2016, as a result of the stepped up effort pledged by the EU regarding EIB lending 
support to Ukraine, the utilisation rate under the ELM for the region Eastern Europe, Southern 
Caucasus and Russia is high. Pending the outcomes of the ELM mid-term review, the lending 
activity of the EIB in the region must be expected to be sharply reduced. The fragile economic 
situation  of  several  countries  in  the  region  as  well  as  their  enhanced  economic  and  political 
relationships with the EU call for continued support by the EU bank in the region, in particular 
against the background of weaker international financial support. 

5.4.4 Asia and Latin America 

5.4.4.1 Asia  

EIB Operations signed in 2016 and key realisation 

The ELM 2014-2020 has been and is expected to remain one of the core facilities under which 
the  Bank  carries  out  its  lending  activities  in  Asia,  alongside  the  Bank’s  own-risk  facility.  In 
line  with  the  ELM  objectives  and  in  view  of  the  very  limited  resources  available  under  the 

43 

 
 
 
ELM  for  Asia,  the  EIB  has  deliberately  acted  in  this  region  as  a  niche  player  focused  on 
climate  action  projects.  However,  a  significant  lending  capacity  with  own-risk-facility  has 
positioned  the EIB as  the key EU actor and will support EU visibility. Moreover, promoters 
have great interest in collaborating with EIB as they are both interested in the European know-
how  and  experience  in  climate  related  issues.  Supporting  renewable  energy,  urban  public 
transport  and  energy  efficiency  in  those  countries,  in  addition  supporting  EU  economic 
diplomacy, will help showcase EU values and cooperation. Incidentally, several main players 
in climate action projects are EU companies and these operations support EU exports. 

In  Asia,  Bank  lending  supported a  broad  range  of  projects including  projects  contributing to 
climate change mitigation, renewable energy and energy efficiency, water and wastewater and 
support to SMEs. Overall during 2014(H2)-2016, 83% of EIB financing in Asia was classified 
as climate action (mitigation and adaptation). Two new operations were signed in 2016, for a 
total amount of EUR 245m (of which EUR 200m under own-risk-facility and EUR 45m under 
ELM).  The  Bank  also  appraised,  approved  and  negotiated  4  new  operations  (EUR  570m,  of 
which  EUR  450m  under  own-risk-facility  and  EUR  120m  under  ELM),  but  the  signatures 
were postponed to 2017. In addition, major progress was made in allocating funds under the 
existing Framework Loans (FLs) in China and India, with 37 operations (for a total amount of 
EUR 300m, all under own risk facility) approved, boding well also for future disbursements. 
The EIB also developed a strong pipeline of climate action projects in Asia, demonstrating that 
the Bank contributes to the EU global leadership in promoting low-carbon and resilient growth 
in the region. 

A MoU was signed with China in Beijing (May 2016) by Vice President Jonathan Taylor and 
Vice Minister Shi Yaobin (Chinese Ministry of Finance), in the presence of President Hoyer 
and Minister Lou Jiwei; the document lays the foundation for further development of the EIB’s 
activities  in  China,  both  in  terms  of  lending  and  knowledge  exchange  with  their  Chinese 
counterparts;  the  MoU  focuses  on  enhancing  cooperation  in  the  area  of  climate  action,  and 
indicates the Bank's potential investments in 2017-2019 in the country, in particular envisaging 
EIB support to projects that contribute to climate-friendly, green sustainable development and 
environmental protection and in China. 

Trends for 2017 

The  potential  for  investment  in  Climate  Action  in  those  countries  is  huge,  as  it  is  a  national 
priority for China, India and other countries. Asia generates some 40% of the global emissions 
and consumes nearly 70% of the world’s coal, and that number has been growing rapidly as 
countries  in  the  region  industrialise.  Asia’s  commitment  to  do  more  toward  the  2  degrees 
global  climate  goal  would  require  an  additional  USD  300bn  pa  on  clean  power-supply 
technology  and  infrastructure  such  as  renewable  power,  carbon  capture  and  storage,  smart 
grids, and energy storage. Economies in developing Asia are already advancing technologies 
to  reduce  greenhouse  gas  emissions,  accounting  for  over  35%  of  world  exports  of  clean 
technology. 

In 2017, the Bank will provide financing for climate-related projects to help turn the ambitious 
Paris agreement into reality and contribute to  climate action operations which are to account 
for  some  35%  of  Bank  lending  outside  the  EU  by  2020.  The  ELM  will  be  used  in  less 
developed  countries  to  ensure  the  achievement  of  its  high  level  objectives  and  other  related 
Bank strategic objectives. However, the amount available under the current ELM 2014-2020 is 

44 

 
 
very  limited  (EUR  87m  per  year  for  the  remaining  period),  which  will  constrain  the  Bank’s 
lending  operations  and  lead  to  visibility  deficit  in  Asia,  unless  the  current  ELM  mid-term 
Review  increase  the  regional  ceiling.  In  addition,  the  Bank  will  use  the  own  risk  facility  in 
developing countries such as China and India to complement the amounts available under the 
ELM. 

Signatures in China and India could cover more than two-thirds of the total signatures (under 
the own risk facility), the balance includes operations in Bangladesh, Sri Lanka and Vietnam 
(under the ELM). In China, EIB financing will support energy efficiency, green transport and 
sustainable forestry projects. In India, the Bank will finance urban transport, renewable energy 
as well as small and medium- sized projects that contribute to climate change mitigation and 
adaptation.  The  Bank  will  also  finance  climate  resilient  roads  in  Laos,  environmental  water 
and  sanitation  projects  in  Bangladesh  and  Sri  Lanka,  and  low-carbon  transport  projects  in 
Pakistan and Vietnam. 

5.4.4.2 Central Asia 

EIB Operations signed in 2016 and key realisation 

In 2016 the EIB has signed one sovereign operation with Kyrgyzstan - the “Kyrgyz Water & 
Waste  Framework  Loan”  -  for  a  total  of  EUR  20m.  The  EIB  loan  forms  part  of  a  larger 
blending package, which includes IFCA funds and EBRD loans. 

With the aforementioned signing the remaining funds in the envelope which is earmarked for 
Central Asia under the ELM 2014-2020 (EUR 182m) stand at EUR 22m. This amount should 
be  absorbed  by  a  new  sovereign  operation  with  Kyrgyzstan,  the  “Kyrgyz  Agriculture  and 
Value Chain” expected to be signed early 2017. 

With the current signing of the “Kyrgyz Agriculture and Value Chain”, all the funds reserved 
for Central Asia under the ELM will be utilised for EIB operations in Kyrgyzstan (EUR 112m) 
and  Tajikistan  (EUR  70m).  In  this  regard,  it  is  to  be  underlined  that  EIB  operations  in 
Kazakhstan  are  funded  exclusively  through  the  EIB’s  Own  Risk  “Climate  Change  and 
Environmental Facility” (“CAEF”). 

In 2016, under CAEF, the Bank has signed two operations with DAMU, the state agency for 
the development of the SMEs in the country, for a total of EUR 200 m. 

Trends for 2017 

The Bank may, in close cooperation with the EBRD, finance a new sovereign operation with 
Tajikistan for the “Rehabilitation of the Kairakkum Hydro Power Plant” subject to an increase 
of  the  regional  ceiling  for  Central  Asia  in  the  context  of  the  mid-term  review  of  the  ELM 
2014-2020. 

For Kazakhstan, the EIB will consider infrastructure operations in renewable energy (mainly 
windfarms), railways and energy efficiency under the Own Risk CAEF. 

45 

 
 
 
 
5.4.4.3 Latin America 

EIB Operations signed in 2016 and key realisation 

During 2016, five operations were signed in Latin America, for a total amount of EUR 519m. 
These five included four operations with the public sector (61% of the total amount) and one 
operation  with  the  private  sector,  the  latter  having  been  structured  under  an  EIB  own  risk 
facility (i.e., not under the ELM).  These operations covered a wide variety of sectors: energy, 
water and sewerage, transport, small local infrastructure and, for the first time, education in the 
region.   

Following  the  earthquake  in  Ecuador,  the  EIB  worked  on  several  initiatives  in  close 
cooperation with EEAS and the EC. The Bank structured a loan (USD 175 m) that will support 
the  integrated  rehabilitation  and  reconstruction  of  the  area  of  Portoviejo,  one  of  the  most 
affected by the natural disaster. This will include several sectors such as social and economic 
infrastructure and reestablishment of livelihoods. Also, the Bank worked on additional actions 
linked  to  previously  appraised  operations  to  both  redirect  the  scope  of  the  latter  and  to  help 
absorb EC funds in the affected regions.  

In line with the guidance received from the EC and EEAS, the Bank stepped up its activities in 
Argentina, which already led to the approval by the EIB’s Board of Director of the first EIB 
operation with Argentina’s public sector in two decades.   

In 2016, two EIB operations benefitted from LAIF support:  

• 
A  EUR  7  m  grant  was  approved  for  technical  assistance  for  the  EIB  loan  for  the 
reconstruction of the area of Portoviejo to ensure and effective and transparent implementation 
of  the  project,  to  support  local  final  beneficiaries,  implement  and  environmental  and  social 
management plan, and to strengthen stakeholders’ participation.  

A EUR 11.3 m grant was approved for the financing of a Technical and technological 
• 
Institute  in  Portoviejo.  The  economic  benefit  of  the  EU  contribution  derives  from  its 
acceleration effect: The construction works will provide employment and income for the local 
labour  market  during  this  time  of  the  severe  post-quake  hardship.  Downstream,  the 
employability skills which the training and apprenticeship programmes are designed to impart 
to the graduates will help to reinvigorate the local labour market. 

Trends for 2017  

In  2017,  the  Bank  will  aim  at  stepping  up  its  lending  activities  in  the  region,  to  enhance  its 
support  to  EU  policies  throughout  the  region,  taking  into  account  the  country  priorities 
conveyed  by  EEAS,  and  to  contribute  to  the  Bank’s  commitment  to  increase  the  share  of 
Climate Action projects. In this context, the Bank aims at resuming its lending operations in 
Argentina,  where  several  investment  projects  have  been  identified  and  appraised.  Regarding 
Colombia, the Bank is firmly committed to support the EU initiatives in the country, especially 
in supporting rural development. The EIB is appraising operations that would complement the 
EU Trust Fund and could be blended with these budgetary resources to achieve higher impact. 
In  the  other  Latin  American  countries,  the  Bank  will  support  projects  with  a  significant 
positive contribution to the SDGs, with a particular focus on Climate Change mitigation and 
adaptation.  

46 

 
 
5.4.5 Republic of South Africa 

EIB Operations and trends for 2017 

Although  it  is  located  in  sub-Saharan  Africa  and  it  undersigned  the  Cotonou  Agreement 
political  principles,  for  lending  operations  the  Republic  of  South  Africa  is  treated  under  a 
specific South African ELM, created following the end of the apartheid regime in 1994. In line 
with  the  ELM  priorities,  the  Bank’s  focus  in  South  Africa  is  therefore  on  private  sector 
development, especially for the benefit of small and medium-sized businesses, vital social and 
economic  infrastructure,  and  climate  change  mitigation  and  adaptation.  Additional  priorities 
for South Africa at an EU level include competitiveness and innovation. 

In 2015 a EUR 200m South Africa Private Sector facility was approved, open to four leading 
South  African  financial  intermediaries,  to  provide  financing  to  private  sector  projects,  in 
particular  SMEs,  in  line  with  the  overriding  objective  of  the  ELM  and  the  development 
priorities of the government of South Africa. So far an amount of EUR 150m has been signed, 
while the remaining EUR 50m is expected to be signed in 2017. The provision of long term 
funding  to  small  businesses  in  South  Africa  is  a  challenge  not  unique  to  South  Africa  only. 
The  above  mentioned  facility  is  designed  to  help  alleviate  this  problem.  It  has  a  particular 
focus on young people, women and non-white entrepreneurs on the part of at least one of the 
institutions; it is also expected that some 50% of the total will be taken in local currency (EIB 
disposes of its own ZAR funding). 

Next  to  supporting  small  and  medium  sized  companies  via  financial  institutions  in  South 
Africa,  the  EIB  envisages  a  catalytic  role  in  larger  infrastructure  projects,  particularly  at  the 
Municipal  level.  The  Bank  is  also  continuing  its  involvement  with  initiatives  to  drive  the 
climate  action  agenda  which,  amongst  others,  include  the  expansion  and  upgrade  water 
supplies in poorer regions. Further loans for such projects should be appraised in the course of 
2017. The Bank has a track record of investing in renewable energy in South Africa, such as 
the Khi Solar One and Ka Xu Concentrated Solar Power facilities. All of these are located in 
the Northern Cape region.  

The EIB will also continue to work together with the EU under the Infrastructure Investment 
Programme  for  South  Africa  (IIPSA),  a  EUR  100m  grant  programme,  which  aims  at 
supporting the  preparation  and  implementation  of  infrastructure  projects  having  a  significant 
development impact. The programme continues to play a key role as a blending instrument for 
the  Bank  and  EDFI  partners  who  are  able  to  commit  their  own  loan  instruments  to  the  EU 
grants made available for infrastructure investments. 

47 

 
 
 
 
 
 
 
 
EU Budget Resources complementing EIB loans in 2016 (Blending) (EUR m) 

Table 8.1 

2014 (from 
July) 

2015 

2016 

Regional blending mechanisms (TA, grants 
approved) 

Western Balkans Investment Framework 

(WBIF)* 

Neighbourhood Investment Facility 

(NIF) 

Investment Facility for Central Asia 

(IFCA) 

Latin America Investment Facility 

(LAIF) 

4.42 

62.00 

132.70 

108.05 

53.21 

39.0 

            -    

2.00 

- 

            -    

10.00 

18.35 

Asia Investment Facility (AIF) 

5.00 

0.00 

Other TA and grants complementing EIB 
projects 

SME Finance Facility (SME FF) 

FEMIP Support Fund (excl. Turkey)  ** 

Support to FEMIP envelope (2007-2013) 

FEMIP Trust Fund*  

Eastern Partnership Technical Assistance 

Trust Fund (EPTATF)  

Eastern Europe Energy Efficiency and 

Environment Partnership (E5P)  
Risk Capital signatures 

MEDA / ENPI Risk Capital 

FEMIP Trust Fund* 

Impact Financing Envelope of FEMIP 

Trust Fund  

Global Energy Efficiency and 

Renewable Energy Fund* 
TOTAL 
* includes other sources of funding than EU budget 

** negative value corresponds to de-commitment 

- 

- 

- 

- 

1.64 

5.32 

18.4 

- 

- 

- 

0.60 

0.27 

2.67 

0.99 

            -    

            -    

0.99 

4.00 

1.00 

            -    

            -    

            -    

2.00 

            -    

12.00 

151.65 

197.04 

41.4 

177.32 

48 

 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
  
 
 
 
 
 
 
 
 
List of EIB-managed Union Budget-funded operations (TA, Grants, Equity) signed or approved in 2016 

Table 8.2 

Contract Name 

Instruments 

Target countries 

TA 

Western Balkans Investment Framework (WBIF) (approved) 
(EC contrib. - approved) 
Infrastructure Project Facility (IPF 6) 
Corridor Vc* "Construction of Motorway section "Svilaj - 
Od:Zak"including the construction of the border crossing 
area and cross-border bridge· in Svilaj over the river 
Sava on the northern border with Croatia” 
EPEC 2 - TA for Strengthening Capacity in Western 
Balkans 
Total 
Neighbourhood Investment Facility (NIF) (approved) 

TA 

TA (3.42) /  
IG (21.67) 

Regional 

Bosnia and 
Herzegovina 

Regional 

2016 
(EUR m) 

26.12 

25.09 

2 

53.21 

Regional Trade & Competitiveness Morocco & Tunisia  

TA 4.0, FI 
25.0 

Morocco & Tunisia 

29.0 

Ukraine Higher Education 

Ukraine Railway Modernization 

TA 

TA 

Ukraine 

Ukraine 

Total  
Eastern Europe Energy Efficiency and Environment Partnership (E5P) (approved) 
Ukraine Krivyi Rih District Heating  
Yerewan Solid Waste 
Ukraine Higher Education 
Total 
Latin America Investment Facility (LAIF) (approved) 
(EC contrib. - approved) 

Ukraine 
Armenia 
Ukraine 

IG 
IG 
IG 

Ecuador Earthquake reconstruction  

Ecuador Technical Technology Centres  

TA 

IG 

Ecuador 

Ecuador 

Total 
Eastern Partnership Technical Assistance Trust Fund (EPTATF) (signed) 
Ukraine Municipal Infrastructure Programme: Support to 
the rehabilitation of district heating systems in 3 Cities 
Technical Assistance to support the implementation of 
the Armenia Apex Loan for SMEs 
Preparation of solid waste management projects in three 
regions in Moldova 

TA 

TA 

TA 

Ukraine 

Armenia 

Moldova 

49 

3.0 

7.0 

39.0 

6.4 
2 
10 
18.4 

7.0 

11.35 

18.35 

0.75 

0.5 

1.07 

 
 
 
 
 
 
 
  
  
  
  
 
 
  
  
 
  
  
  
Ukraine Early Recovery: Programme Implementation 
Support to Final Beneficiaries 
Total 
FEMIP Trust Fund (signed) 
Technical assistance in support of the development of 
the Euro-Mediterranean logistic area of Amman 
(Madounah) in the HASHEMITE KINGDOM OF 
JORDAN 
National Appropriate Mitigation Actions Potentials in the 
Mediterranean Partner Countries - NAMA Study 
Assistance Technique pour l'extension et l'amélioration 
fonctionnelle de l'Aéroport International de Tunis 
Carthage (AITC) 
Technical assistance in support of the South Lebanon 
Water and Wasterwater Project (extension) 
Renforcement des capacites du secteur de la 
microfinance tunisienne 
Feasibility study for the Alexandria West Wastewater 
Treatment Plant Expansion and Upgrade 
Total 
Risk Capital signatures 

Global Energy Efficiency and Renewable Energy Fund 
(GEEREF): Renewable Energy Asia Fund II 
Global Energy Efficiency and Renewable Energy Fund 
(GEEREF): Catalyst MENA Clean Energy Fund 
Global Energy Efficiency and Renewable Energy Fund 
(GEEREF): Caucasus Clean Energy Fund 
Total 

TA 

Ukraine 

TA 

Jordan 

TA 

Regional 

TA 

Tunisia 

TA 

TA 

TA 

Lebanon 

Tunisia 

Egypt 

RC/equity 

RC/equity 

India, the 
Philippines, 
Indonesia 
Jordan, Egypt, 
Morocco, Tunisia 

RC/equity 

Georgia 

3 

5.32 

0.23 

0.29 

0.19 

0.15 

0.48 

0.3 

1.64 

14.4 

15 

12 

41.4 

TOTAL 

177.32 
* In accordance with the Grant application Form (GAF) and the General Conditions of the European Western Balkans 
Joint Fund (EWBJF) approved on 16/06/2016 

 TA Technical Assistance 
FI Financial Instrument 

IG Investment Grants 

IRS Investment Rate Subsidy 

RC Risk Capital 

6. 

CO-OPERATION WITH EUROPEAN OMBUDSMAN  

The Memorandum of Understanding signed between the EIB and the European Ombudsman 
(EO) in 2008 sets the basis for the two stages of the EIB Complaints Mechanism - the internal 
(EIB-CM) and the external - approved by the EIB Board of Directors in 2010 after extensive 

50 

 
 
  
  
  
  
  
  
 
 
 
 
 
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 Bank; 

  Concerning  complaints  related  to  operations  outside  the  EU,  including  the  External 
Mandates,  the  European  Ombudsman  commits  to  use  its  Own  Initiative7  power 
systematically in order to handle complaints when the complainant is not a citizen or 
resident of the European Union; 

  The scope of the EO's review, with the recognition of the EIB-CM as the required prior 

approach. 

The table below shows the evolution of the number of complaints handled by the EIB-CM in 
the  past  6  years.  The  nature  of  the  complaints  refers  to  allegations  related  to  the  projects 
financed  by  the  Bank  in  the  areas  of  Environment  and  Social,  Procurement  as  well  as 
Governance (legal and  financial structure of the project, Bank’s  general due diligence of the 
project, implementation of Bank’s policies by borrowers, etc). 

Table 9: Project related complaints lodged with the internal part (EIB-CM) of the EIB Complaints Mechanism 

over 2011-2016 

2011  2012  2013  2014 

2015 

2016 

6 years 

EU Member States 

9 

15 

13 

13 

13 

4  

(of which 1 to EO) 

Non-EU, of which 

16 

17 

18 

16 

14 

      in External Mandate 
Countries 

13 

15 

16 

13 

13 

      in ACP, OCTs 

3 

2 

2 

3 

1 

Total (EU & Non EU 
Members) 

25 

32 

31 

29 

27 

23 

23 

0 

27 

67 

104 

93 

11 

171 

As the above table shows, the number of annual new project-related complaints remained 

7 The European Ombudsman may open inquiries on her “Own Initiative” if she considers it justified in order to 
clarify any suspected maladministration in the activities of EU institutions, bodies, offices or agencies, 
despite the Statute of the EO that specifies that "Any citizen of the Union or any natural or legal person 
residing  or  having  his  registered  office  in  a  Member  State  of  the  Union  may,  directly  or  through  a 
Member of the European Parliament, refer a complaint to the Ombudsman [ ... ]." 

51 

 
 
 
 
 
 
 
                                                            
 
relatively stable overall since 2011. However the number of new cases registered in External 
Lending Regions grew relatively more to 23, from 13 in 2015. These new cases are located in 
Albania, Bosnia and Herzegovina, Costa Rica, Ecuador, Egypt, Georgia, Lao People's 
Democratic Republic, Mongolia, Morocco, Paraguay, Serbia, Tunisia. Out of the 23 cases 
opened concerning the External Lending Mandate, 9 are related to Environmental and Social 
impacts, 12 to Procurement, and 1 to Access to information and 1 to Governance matters 
related to projects.  

The EIB-CM also deals with complaints with a ‘preventive’ objective, which are classified as 
PR, meaning that the complaint is handled in early stages of the project appraisal together 
with the EIB services. The Complainant can always revert to the EIB-CM if not satisfied 
with the PR handling of the case. In 2016 the EIB-CM handled 25 of such PR complaints of 
which 17 in the Western Balkans, 2 in Africa, 2 in the Eastern Neighbourhood, 1 in Asia and 
3 in FEMIP. Of the 17 PR complaints in the Western Balkan, 11 PR cases concerned the 
Trans Adriatic Pipeline project in Albania. 

The outcome of the complaints handling process varied from "allegations not grounded", 
"areas for improvement recommended" to “withdrawn by the Complainant”. During 2016, 
the EIB-CM closed 15 cases in Albania (2), Brazil (1), Bosnia and Herzegovina (2), Ecuador 
(1), Georgia (1), Moldova (1), Mongolia (1), Morocco (1) and Serbia (5). In the complaint 
relating to the Highway Interchange Petlovo Brdo in Serbia the EIB-CM contributed to a 
Mediation process between the Promoter and the affected population and in the case of the 
Sao Paolo Rolling stock complaint in Brazil the EIB-CM had to withdraw as the complaint 
was settled by a national judicial authority. In the Ulaanbataar Waste Water System 
complaint in Mongolia the EIB-CM stressed the importance of assessing - at a due diligence 
stage - a promoter’s capacity to undertake procurement activities and, where appropriate, 
provide technical assistance/expertise.  

During 2016, the EO did not receive any complaint related to the EIB activities in the 
External Lending Region. 

7. 

COOPERATION WITH INTERNATIONAL FINANCING INSTITUTIONS  

27 projects signed in 2016 were co-financed by other IFIs  (see Annex 4). EBRD is the first 
co-financer  (13  projects)  representing  44%  of  the  total  volume  of  co-financing,  followed  by 
World Bank Group (7 projects) representing 32% of the total volume of co-financing. AFD co-
financed  4  projects  and  represents  15%  of  the  volume  of  co-financing.  The  Asian 
Development Bank co-financed 4 projects, representing a 22% of the total of co-financing and 
the Inter-American Development Bank together with the Development Bank of Latin America 
(CAF) co-financed 2 projects, representing 4% of the total of co-financing, . 

52 

 
 
 
 
7.1 Relation with European Financial Institutions 

7.1.1 Collaboration with AFD and KfW 

Cooperation between EIB and AFD has continued to intensify over the last years. Meanwhile, 
a regular routine of meetings on policy/coordination level as well as on operational level has 
been  established,  which  has  facilitated  exchange  of  information  and  transparency.  The  EIB 
also maintains a system of mutual staff exchange with KfW and since 2016 also with AFD. 

The three institutions cooperate closely in the context of the Mutual Reliance Initiative (MRI). 
Launched  in  2013,  the  MRI  is  a  widely  recognised  means  of  implementing  EU  external 
cooperation  policies.  It  foresees  that  the  three  MRI  Partners  rely  on  one  of  them  to  perform 
certain  tasks,  e.g.  some  of  the  project  due  diligence,  or  procurement  supervision.  Promoters 
appreciate the resulting simplified processes. The management and decision-making bodies of 
the MRI partners have become acquainted to documents prepared by another institution which 
they use for their own decisions. Talks continued during 2016 on how to further increase the 
level  of  work  sharing  and  delegation  and  take  the  MRI  to  a  higher  level  of  relevance  and 
effectiveness. 

In  2016,  4  projects  were  co-financed  with  AFD  in  the  ELM  regions,  all  of  which  in  the 
Mediterranean  region  representing  a total EIB financing of EUR 778m,  representing 29%  of 
total  EIB  financing  projects  in  the  Mediterranean  region.  The  average  share  of  the  EIB 
financing is 27% whereas the average share of AFD financing in such projects is 15%. 

In 2016, 3 projects were co-financed with KfW group in the ELM regions, with one project in 
Pre-Accession  region  (Montenegro  and  Turkey)  and  one  project  in  the  Mediterranean 
countries (Morocco) with a total EIB financing of EUR 142m and EUR 93m for KfW group. 
The average share of the EIB financing is 10% and KfW group in such projects is 7%. 

7.1.2 Collaboration with EBRD 

Several meetings have been held in line with the tripartite MoU of 2012 between the EC, EIB 
and the European Bank for Reconstruction and Development (EBRD). A Steering Committee 
chaired by the Commission took place in June 2016. This focused in particular on the Banks’ 
response to the Migration Crisis as well as overall cooperation. The EIB and EBRD also held 
two Contact Group meetings to exchange views on their pipelines of operations in the regions 
where they both operate.   In addition, the Banks shared information on their response to the 
migration crisis and on other common topics of interest including issues arising in relation to 
offshoring and the newly created EU4Business initiative in the Eastern Partnership region. 

These regular relations are useful to coordinate actions and to enhance operational synergies in 
the countries of operation. Indeed, in 2016, 13 projects were co-financed by EIB and EBRD, 
with a total of EUR 1.1bn of EIB financing and EUR 1.2bn of EBRD financing. The average 
share of the EIB and EBRD in such projects is approximately 33% each.  

7.2 Cooperation with others on development  

7.2.1 Strategic Institutional cooperation amongst MDBs 

A  new  and  significant  development  in  2016  was  the  entry  of  three  new  members,  the  Asia 
Infrastructure  Investment  Bank  (AIIB),  the  Islamic  Development  Bank  and  the  New 
Development Bank (also known as “BRICS” Bank). 

53 

 
 
 
The MoU signed by EIB with AIIB in May 2016 in Beijing provides the framework to further 
consolidate  the  relations  between  EIB  and  AIIB  in  the  areas  of  joint  financing  of  eligible 
operations,  knowledge  sharing  and  the  establishment  of  regular  high  level  meetings.  The 
memorandum  was  signed  during  President  Hoyer’s  official  visit  to  China,  and  shows  EIB 
commitment to working closely with the AIIB to address the infrastructure needs in Asia by 
capitalising their long experience and expertise in the region as well as in the EU. 

In  addition  to  the  multiple  working  groups  and  initiatives  covering  a  broad  range  of  issues 
(climate,  infrastructure,  finance,  risk,  results  measurement,  ex  post  evaluation,  debt 
management etc.), MDB cooperation remains strong at the highest level, when Presidents meet 
and discuss strategic priorities.  

High-level discussions among MDBs focused on the main topics of the development agenda, 
namely  how  to  jointly  enhance  MDB  support  for  Climate  Action  and  contribute  to  the 
Sustainable Development Goals. Addressing the consequences of the refugee crisis and forced 
displacement more generally, was another key topic for MDB cooperation in 2016. A special 
MDB  Task  Force  was  also  set  up  to  define  and  measure  mobilisation  and  catalysation  by 
MDBs  of  private  sector  finance.    Building  on  recommendations  from  the  G7  and  the  G20, 
MDBs also worked jointly on ways to optimise their balance sheets and increase their lending 
capacity in support of development objectives.  

Next steps will involve refining principles on the use of blended finance and developing new 
approaches to prioritising the use of public funds where they are most needed and where they 
can  crowd  in  private  finance,  in  line  with  the  “Billions  to  Trillions”  narrative.  MDBs  work 
together  on  “de-risking”  and  the  further  increase  in  the  use  of  risk  sharing  instruments  and 
guarantee schemes (in line with developments inside the EU) to maximise the impact of public 
resources in crowding in private finance. 

7.2.2 Operational Institutional cooperation  

To maximise the impact of their projects, and to explore new ways of doing things and new 
sectors  to  target  on  the  road  to  the  2030  Agenda,  the  Bank  is  partnering  with  several 
organisations  to  combine  the  Bank`s  financial  know  how  with  their  technical  expertise  and 
local knowledge. Taken together, they are boosting their capabilities in several sectors entirely 
relevant to the SDGs. 

EIB  President  Werner  Hoyer  and  United  Nations  Industrial  Development  Organisation 
(UNIDO) Director-General Li Yong formally signed a Memorandum of Understanding in July 
2015. Through this, their organisations have agreed to enhance cooperation and to share good 
practices  and  expertise  in  relevant  sectors,  most  notably  resilient  infrastructure,  sustainable 
industrialisation  and  innovation.  This  is  a  timely  partnership,  which  will  enable  both 
institutions to work together to help achieve several of the SDGs, amongst them number 1 (No 
Poverty),  Number  8  (Decent  Work  and  Economic  Growth),  Number  9  (Industry,  Innovation 
and  Infrastructure),  Number  12  (Responsible  Consumption  and  Production)  and  Number  13 
(Climate  Action).  The  EIB  and  UNIDO  have  explored  some  potential  projects  in  industrial 
value chain support in Africa.  

The Bank has also agreed to work with the Food and Agriculture Organisation of the United 
Nations (FAO), for which EIB Vice-President Pim van Ballekom and FAO Director-General 
José Graziano Da Silva signed a Memorandum of Understanding  in 2015. This  makes sense 
for  both  parties,  as  the  Bank  looks  to  expand  investment  in  agriculture  and  food  security, 

54 

 
 
notably in terms of private sector companies, value chains, small businesses and entrepreneurs, 
and FAO looks out for food security and sustainable job creation in the field of agribusiness. 
In addition to joint interests, their organisations can work together on relevant projects in the 
future,  where  technical  assistance  and  expertise  could  be  required  to  carry  out  capacity 
building  on  the  ground,  including  the  promotion  of  agribusiness  to  rural  populations,  young 
people and women, as well as bringing their ideas to bear on development. There are several 
ways  in  which  this  could  happen,  and  their  organisations  are  again  looking  at  areas  for 
collaboration.  Through  working  together,  they  help  achieve  SDGs  Number  1  (No  Poverty), 
Number  2  (Zero  Hunger),  Number  5  (Gender  Equality),  Number  8  (Decent  Work  and 
Economic Growth) and Number 15 (Life on Land). 

The crucial importance of creating jobs in rural areas is something that the EIB is approaching 
pro-actively. In April 2016, EIB Vice-President Pim van Ballekom and International Fund for 
Agricultural  Development  (IFAD)  Associate  Vice-President  Henock  Kifle  signed  an 
agreement to expand cooperation between the two organisations, reflecting the importance of 
agribusiness  in  emerging  economies,  both  now  and  in  the  future.  The  Memorandum  of 
Understanding reflects the premium placed on small holder farmers, as shared by both the EIB 
and IFAD, and they are working together on a project which will support them. 

The  United  Nations  Development  Programme  operates  in  many  countries,  supporting 
sustainable  development,  the  eradication  of  poverty  the  advancement  of  women  and  good 
governance  amongst  the  ultimate  aim  of  achieving  the  SDGs.  The  EIB  and  UNDP  have 
therefore formalised a Memorandum of Understanding to work together towards this common 
agenda,  which  has  the  SDGS  at  heart,  and  is  placed  in  the  context  of  the  “From  Billions  to 
Trillions”  MDB  action  plan.  This  was  signed  by  EIB  President  Werner  Hoyer  and  UNDP 
Administrator  Helen  Clark  in  October  2016.  The  thematic  focuses  of  this  partnership  are 
climate  change  response,  responding  to  crisis  and  post-crisis  situations,  the  migration  crisis 
and  promoting  inclusive  markets  and  entrepreneurship.  Technically,  their  organisations  are 
targeting  Urban  Development  (SDG  Number  11  Sustainable  Cities  and  Communities), 
Sustainable  Energy  (SDG  Number  7,  Clean  Energy),  Water  Management  (SDG  Number  3, 
Good Health and Wellbeing and SDG 6, Clean Water and Sanitation) and Rural Development. 

The  United  Nations  Office  for  Project  Services  (UNOPS)  supports 
the  successful 
implementation  of  UN  partners’  peace-building,  humanitarian  and  developmental  projects 
around the world. The EIB can work with UNOPS on key projects to improve lives across the 
world.  It  was  in  this  context  that  in  April  2016,  EIB  Vice-President  Pim  van  Ballekom  and 
UNOPS Director Grete Faremo signed an agreement for their organisations to work together. 
This  partnership  will  enable  both  institutions  to  overcome  ongoing  challenges  to  sustainable 
development,  most  notably  in  fragile  economies,  as  well  as  climate  change  and,  something 
which is essential, increasing the capacity of the private sector to drive growth and change. Put 
together,  the  EIB  and  UNOPS  can  catalyse  further  investment  in  projects  where  investors 
could  be  reluctant  to  get  involved.  Again,  SDG  Number  1  (No  Poverty),  Number  8  (Decent 
Work  and  Economic  Growth),  Number  10  (Reduced  Inequalities),  Number  13  (Climate 
Action)  are  all  targets,  with  an  indirect  benefit  to  Number  16  (Peace,  Justice  and  Strong 
Institutions). 

7.2.3 The Boost MENA initiative 

In  2016,  the  EIB  and  the  African  Development  Bank  launched  the  Boost  Africa  initiative,  a 
comprehensive  joint  programme  which  aims  to  enable  and  enhance  entrepreneurship  and 

55 

 
 
innovation across Africa in a commercially viable way through a blending mechanism with the 
European Commission.  

Similarly  to  Boost  Africa,  the  Boost  MENA  initiative  currently  under  development  jointly 
with the World Bank, in the framework of the Economic Resilience Iniative (ERI), stems from 
the belief that entrepreneurship and innovation can play a significant role in accelerating living 
standards and social progress. The initiative will draw lessons from the report from the EBRD, 
the  EIB  and  the  WBG  “What’s  holding  back  the  private  sector  in  MENA?”    based  on  the 
MENA  Enterprise  Survey  (ES)  of  more  than  6,000  firms  in  eight  countries,  identifying  the 
private sector as a key driver for growth and rising prosperity, on the condition that effective 
business  enabling  policies,  enhanced  access  to  finance  and  support  to  entrepreneurship  and 
innovation  are  ensured.  Boost  MENA  will  address  directly  the  root  causes  of  the  current 
increasing migration, which sees thousands of skilled and unskilled young people leave their 
countries  at  the  risk  of  their  lives  in  search  of  a  better  economic  future.  The  fast-growing 
digital  economy  is  seen  as  one  of  the  most  powerful  drivers  for  future  employment  and 
economic  prosperity.  Across  both  developed  and  developing  countries,  start-ups  and  high-
growth innovative SMEs play a crucial role in net job creation. Critically, innovative start-ups 
are starting to show very important economic and development impacts and require assistance 
to reach their potential.  

Like  Boost  Africa,  Boost  MENA  will  adopt  a  value  chain  approach  aiming  to  support  the 
earliest  and  riskiest  stages  of  entrepreneurship  in  a  sustainable  way.  The  project  design  will 
allow  addressing  gaps  by  providing  long-term  support  to  promoters  targeting  entrepreneurs, 
through financing and capacity-building, thus sustaining the modernisation of the ecosystem, 
in a context characterised by high barriers for newcomers to start a business.  Both initiatives 
will step up the effort towards mainly first-time entrepreneurs (in particular among youth and 
women)  in  order  to  contribute,  among  others,  to  the  international  response  to  the  migration 
crisis.  By  increasing  the  opportunities  for  young  entrepreneurs  to  set  up  their  companies  the 
initiative expects to boost the creation of significant numbers of quality jobs, retaining talent 
and, in some cases, reversing the brain drain in Africa. In line with the objectives of a letter of 
intention to jointly implement Boost Mena, the EIB and WB consider that AfDB could play a 
significant  role  as  co-investor  in  this  initiative  as  well,  thanks  to  its  geographic  scope  of 
operations, including North Africa in particular. 

A  Boost  platform  is  currently  under  development  with  a  large  number  of  DFIs  considering 
similar  investments.  Mobilisation  of  local  investors  and  business  angel  networks  is  also  a 
medium-term objective, to address the existing financing gap in this segment of the market. 

7.3 Coordination with others on Climate  

The EIB has continued to cooperate throughout 2016 with MDBs and other IFIs and relevant 
groups in order to harmonise climate finance tracking and impact reporting standards. 

The  Bank  tracks  climate  finance  using  definitions  developed  and  harmonised  in  cooperation 
with  peer  institutions.  During  2016,  Asian  Development  Bank  (ADB)  coordinated  the  2015 
Joint Report on MDBs’ Climate Finance (taking over from WBG the previous year and EIB in 
2014). The report showed that, in 2015, MDBs delivered USD 25,096 bn in climate finance8. 

8 The figure includes own-resources and third parties financing in developing countries and emerging economies 

(i.e. for EIB, climate finance in ELM plus ACP countries plus EU11). 

56 

 
 
                                                            
In 2017-19 this work has been reorganised on a longer term basis as part of the MDBs’ post-
Paris workplan, with the core reporting led by EBRD, finance tracking and impact reporting by 
EIB and IDB and co-financing data by WBG. 

MDBs  are  also  working  with  other  bilateral  and  national  organisations  (International 
Development Finance Club, IDFC: among the members worldwide are KFW, AFD, JICA but 
also  BNDES,  DBSA  and  China  Development  Bank)  to  improve  the  consistency  of  finance 
reported under the 2015 MDB/IDFC Common Principles for Mitigation Tracking, and initial 
Common  Principles  for  Adaptation  Tracking.  Work  continues  on  tracking  in  challenging 
sectors and on how to reach the ultimate aim of compatible reporting. However, although the 
Common  Principles  are  a  big  step  forward,  the  two  groups  are  still  far  away  from  a  fully 
harmonised  approach.  One  of  the  main  difficulties  is  agreeing  on  accounting  methods 
(granularity of investments). 

Further work has progressed on the Principles for Mainstreaming Climate Action in Financial 
Institutions, launched at COP21. Until a more permanent arrangement is put in place, EIB is 
hosting, 
for  Mainstreaming  website: 
www.eib.org/FIclimatemainstreaming 

the  Principles 

temporary 

basis, 

on 

a 

These  Principles  provide  a  platform  to  gather  an  ever  increasing  number  of  supporting 
financial  organisations  (e.g.  commercial  banks,  insurance  companies,  institutional  investors). 
The headlines of the Five Voluntary Principles are: 

• 

• 

• 

• 

• 

COMMIT to climate strategies (including targets, priorities) 

MANAGE climate risks (stranded assets, vulnerability analysis, adaptation) 

PROMOTE climate smart objectives (instruments, leverage, knowledge sharing) 

IMPROVE climate performance (measuring, impact) 

ACCOUNT for your climate action (reporting) 

A  larger  group  including  all  6  MDBs,  plus  AFD,  KfW,  NIB  and  other  IFIs,  developed  and 
published,  via  the  Green  Bond  Principles  Network,  a  harmonised  framework  for  green  bond 
impact  reporting.  This  impact  reporting  is  linked  to  harmonised  approaches  on  GHG 
accounting  and  reporting,  developed  by  the  IFI  working  group  in  which  the  EIB  is  a  key 
participant and which is now being taken forward at an accelerated pace in close cooperation 
with UNFCCC. 

On  Adaptation  they  also  continue  to  work  closely  with  EU  financing  institutions  in  the  EU 
Financing Institutions Working Group on Adaptation to Climate Change (EUFIWACC). EIB 
and  other  EUFIWACC  members  published  in  2016  the  EUFIWACC  Integrating  Climate 
.
change 

Development 

adaptation 

Project 

in 

57 

 
 
 
ANNEX I - LIST OF OPERATIONS SIGNED IN 2016 

List of operations signed in ALA Region (Latin America, Central Asia and Asia) 

58 

 ELM - Compreh. Guarantee  ELM - Political Risk Guarantee  ORF  Local private sector dev.  Social & Economic Infra  Climate Action  Regional Integrat. IndiaLUCKNOW METRO RAIL PROJECT                      200     x  x TransportMaldivesMALDIVES SUSTAINABLE ENERGY DEVELOPMENT                        45 +++EnergyKazakhstanDAMU GREEN LOAN FOR SMES - A                        50  x +Credit linesKazakhstanDAMU GREEN LOAN FOR SMES - B                      150  x +Credit linesKyrgyzstanWATER SUPPLY SEWERAGE AND SOLID WASTE                        20  x +Water, Sewerage,Solid wasteBrazilNEOENERGIA ELECTRICITY DISTRIBUTION II                      200  x EnergyEcuadorMETRO DE QUITO                        41  x  x TransportEcuadorPOST-EARTHQUAKE RECONSTRUCTION FRAMEWORK LOAN                      162  x IndustryEcuadorTECHNICAL AND TECHNOLOGICAL INSTITUTES PROGRAMME                        70  x EducationPanamaPANAMA CITY AND BAY WASTEWATER TREATMENT PROJECT                        46  x +Water, sewerageTotal 2016 Operations Signed                      384                          -                         600 Objective supportedCOUNTRYOPERATIONSectorSigned (EURm) / Framework 
 
 
 
 
 
List of operations signed in the Eastern Europe, Southern Caucasus and Russia region in 
2016 

59 

 ELM - Compreh. Guarantee  ELM - Political Risk Guarantee  Local private sector dev.  Social & Economic Infra  Climate Action  Regional Integrat. ArmeniaARMENIA M6 INTERSTATE ROAD                        51  x  x TransportArmeniaBORDER CROSSING AND INFRASTRUCTURE                          1  x  x TransportArmeniaARMENIA APEX II LOAN FOR SMES AND MIDCAPS                        51  x +Credit linesGeorgiaGEORGIA URBAN RECONSTRUCTION AND DEVELOPMENT FL                      100  x Composite infrastructure,ServicesGeorgiaGEORGIA EAST-WEST HIGHWAY II                        49  x  x TransportGeorgiaJSC BANK REPUBLIC LOAN FOR SMES AND MIDCAPS                        23  x +Credit linesGeorgiaGEORGIAN AGRI-FOOD VALUE CHAINS                      100 +++ x Agriculture, fisheries, forestryGeorgiaGEORGIA TRANSPORT CONNECTIVITY                      250  x TransportGeorgiaGEORGIA UPGRADE OF MUNICIPAL INFRASTRUCTURE                      100  x Urban developmentMoldova, Republic ofMOLDOVA RAIL INFRASTRUCTURE AND ROLLING STOCK FL                        50  x  x  x TransportMoldova, Republic ofUNGHENI-CHISINAU GAS PIPELINE                        41  x  x EnergyUkraineUKRAINE URBAN PUBLIC TRANSPORT FL                      200  x  x TransportUkraineUKRAINE RAILWAY MODERNIZATION                      150  x  x  x TransportUkraineUKRAINE HIGHER EDUCATION PROJECT                      120  x +Education, IndustryUkraineUKRAINE DCFTA SUPPORT FACILITY                      260  x +Credit linesUkraineNIBULON (CEREAL PRODUCTION AND TRANSPORTATION)                        71 +++Agriculture, fisheries, forestry,TransportTotal 2016 Operations Signed                   1,263                       354 Objective supportedCOUNTRYOPERATIONSectorSigned (EURm) / Framework 
 
 
List of operations signed in the Mediterranean region in 2016 

60 

 ELM - Compreh. Guarantee  ELM - Political Risk Guarantee  ORF  Local private sector dev.  Social & Economic Infra  Climate Action  Regional Integrat. EgyptCAIRO METRO LINE 3 (PHASE 3)                      200  x  x TransportEgyptEBE SME AND MIDCAPS LOAN                        28  x +Credit linesEgyptQNB EGYPT LOAN FOR SMES                        92  x +Credit linesEgyptEGYPT PRIVATE SECTOR SUPPORT                      500  x +Credit linesEgyptCAIRO METRO LINE 2 ROLLING STOCK                        75  x  x TransportIsraelICL RDI                        92  x  x IndustryMoroccoFEMIP SUSTAINABLE ENERGY FACILITY                        30  x  x  x Credit linesMoroccoBMCE LIGNE VERTE                        10  x +Solid wasteMoroccoBMCE LOAN FOR SMES AND MIDCAPS                      150  x +Credit linesTunisiaGCT MISE A NIVEAU ENVIRONNEMENTALE                        19  x +IndustryTunisiaBANQUE DE TUNISIE - LOAN FOR SMES                        50  x +Credit linesTunisiaTUNISIE TELECOM 4G ROLLOUT                      100  x TelecommunicationsTunisiaDEPOLMED                        70  x +Water, sewerageTunisiaSTEG V TRANSPORT ELECTRICITE                        47  x EnergyTunisiaPONT DE BIZERTE                      123  x TransportTotal 2016 Operations Signed                   1,061                       332                       192 Objective supportedSectorCOUNTRYOPERATIONSigned (EURm) / Framework 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
List of operations signed in Pre-Accession region in 2016 

61 

Signed (EURm) / Framework ELM - Compreh. Guarantee  ORF  Local private sector dev.  Social & Economic Infra  Climate Action  Regional Integrat. Bosnia and HerzegovinaPROCREDIT LOAN FOR SME AND OTHER COP OBJECTIVES                        10  x + x Credit linesBosnia and HerzegovinaROAD MODERNISATION FEDERATION BIH                        50  x TransportBosnia and HerzegovinaRBBH LOAN FOR SMES AND PRIORITY PROJECTS                        30 +++ x Credit linesBosnia and HerzegovinaISP LOAN FOR SMES AND PRIORITY PROJECTS III                        25  x +Credit linesBosnia and HerzegovinaRS HOSPITALS                        15  x HealthFYROMCORRIDOR X ROAD PROJECT                        35  x TransportFYROMPROCREDIT LOAN FOR SME AND OTHER COP OBJECTIVES                        10  x + x Credit linesMontenegroIDF LOAN FOR SMES AND PRIORITY PROJECTS II                        30 +++Credit linesMontenegroMONTENEGRO WATER AND SANITATION                        26  x Water, sewerageSerbiaSGRS LOAN FOR SMES AND OTHER PRIORITIES III                        20 +++Credit linesSerbiaAPEX LOAN FOR SMES AND OTHER PRIORITIES III                       150  x + x Credit linesSerbiaUPGRADING OF JUDICIARY BUILDINGS                        26  x ServicesTurkeyTSKB LOAN III FOR SMES MIDCAPS AND INNOVATION                      100  x + x Credit linesTurkeyZIRAATBANK LOAN FOR SMES AND MIDCAPS II                      100  x + x Credit linesTurkeyING BANK TURKEY SMES AND MIDCAPS LOAN III                      200  x + x Credit linesTurkeyODEA BANK LOAN FOR SMES AND MIDCAPS                      100  x + x Credit linesTurkeyVAKIFBANK ADDITIONAL LOAN FOR SMES                      100  x +Credit linesTurkeyPETLIM PORT                        70  x +TransportTurkeyETLIK HOSPITAL                        50  x HealthTurkeyEXIMBANK LOAN FOR SMES AND MIDCAPS III                      200  x + x Credit linesTurkeyAKBANK LOAN FOR SMES AND MIDCAPS III                      195  x +Credit linesTurkeyAKLEASE LOAN FOR SME AND MID-CAPS A                        60  x + x Credit linesTurkeyTSKB ENERGY AND ENVIRONMENT LOAN                      100  x +EnergyWater, sewerageTurkeyFINA ENERJI WIND POWER PLANTS                        33  x  x EnergyTurkeyISBANK CLIMATE CHANGE FACILITY II                      150 +++Credit linesEnergyTurkeyVAKIFBANK LOAN III FOR SMES AND MIDCAPS                      100  x +Credit linesTurkeyFINANS LEASING LOAN FOR SMES AND MIDCAPS                      100  x + x Credit linesTurkeyISTANBUL UNDERGROUND RAIL NETWORK II                      250  x  x TransportTurkeyHALKBANK LOAN IV FOR SMES AND MIDCAPS                      100  x +Credit linesTurkeyZIRAATBANK LOAN FOR SMES AND MIDCAPS III                      100  x + x Credit linesTurkeyGAZIANTEP HEALTH CAMPUS                      120  x HealthTotal 2016 Operations Signed                      582                    2,073 COUNTRYOPERATIONObjective supportedSector 
 
 
 
 
Annex II - List of operations signed in the regions covered by the Mandate in 2016 and co-
financed with other IFIs or benefiting from EU grants 

List of operations signed in the regions covered by the Mandate in 2016 and co-financed with other IFIs or benefiting 
from EU grants 

MANDATE / FACILITYCOUNTRYCONTRACT NAMEPROJECT COST (EUR M)EIB LOAN SIGNED IN 2016(EUR M)Multilateral Financing InstitutionsEuropean Bilateral InstitutionsEU budget contrib.ELM Asia 2014-2020MaldivesMALDIVES SUSTAINABLE ENERGY DEVELOPMENT               175.00                  45.00 XELM Central Asia 2014-2020KyrgyzstanWATER SUPPLY SEWERAGE AND SOLID WASTE                 80.00                  20.00 XIFCAELM East-Ru. 2014-2020ArmeniaBORDER CROSSING AND INFRASTRUCTURE B                 61.70                    0.53 XNIFELM East-Ru. 2014-2020ArmeniaARMENIA M6 INTERSTATE ROAD               102.00                  51.00 XNIF (expected)ELM East-Ru. 2014-2020GeorgiaGEORGIA URBAN RECONSTRUCTION AND DEVELOPMENT FL               150.00                100.00 XELM East-Ru. 2014-2020GeorgiaGEORGIA EAST-WEST HIGHWAY II               176.45                  49.45 XELM East-Ru. 2014-2020GeorgiaGEORGIAN AGRI-FOOD VALUE CHAINS200.00              100.00              NIFELM East-Ru. 2014-2020GeorgiaGEORGIA TRANSPORT CONNECTIVITY1,000.00           250.00              XNIF (expected)ELM East-Ru. 2014-2020GeorgiaGEORGIA UPGRADE OF MUNICIPAL INFRASTRUCTURE200.00              100.00              XELM East-Ru. 2014-2020Moldova, Republic ofMOLDOVA RAIL INFRASTRUCTURE AND ROLLING STOCK FL               120.40                  50.00 XNIFELM East-Ru. 2014-2020Moldova, Republic ofUNGHENI-CHISINAU GAS PIPELINE92.00                41.00                XEC (Support to the reform of energy sector programme)ELM East-Ru. 2014-2020UkraineUKRAINE RAILWAY MODERNIZATION314.00              150.00              XNIFELM East-Ru. 2014-2020UkraineUKRAINE HIGHER EDUCATION PROJECT160.00              120.00              E5P*NIFELM East-Ru. 2014-2020UkraineUKRAINE URBAN PUBLIC TRANSPORT FL               400.00                200.00 XELM Latin America 2014-2020EcuadorMETRO DE QUITO B            1,361.00                  40.97 XELM Latin America 2014-2020EcuadorTECHNICAL AND TECHNOLOGICAL INSTITUTES PROGRAMME191.44              70.13                XLAIFELM Latin America 2014-2020PanamaPANAMA CITY AND BAY WASTEWATER TREATMENT PROJECT               138.45                  45.86 XELM MED 2014-2020EgyptCAIRO METRO LINE 3 (PHASE 3) - C            2,417.90                200.00 XNIF, FEMIP Support*ELM MED 2014-2020EgyptCAIRO METRO LINE 2 ROLLING STOCK187.00              75.00                XELM MED 2014-2020MoroccoFEMIP SUSTAINABLE ENERGY FACILITY (BMCE) B and (BCP) C                137.50                  30.00 XXNIFELM MED 2014-2020MoroccoBMCE LIGNE VERTE                 40.00                  10.00 XELM MED 2014-2020TunisiaGCT MISE A NIVEAU ENVIRONNEMENTALE B               149.52                  19.00 XECELM MED 2014-2020TunisiaDEPOLMED               140.00                  69.60 XNIFELM MED 2014-2020TunisiaSTEG V TRANSPORT ELECTRICITE               109.70                  46.50 XELM Pre-Accession 2014-2020FYROMCORRIDOR X ROAD PROJECT B               300.00                  35.00 XIPAELM Pre-Accession 2014-2020MontenegroMONTENEGRO WATER AND SANITATION E114.22              25.50                XIPAWBIF*Climate Action and Environment Facility 2014-2020KazakhstanDAMU GREEN LOAN FOR SMES - A               100.00 50.00                IFCAPAF-32200M-2000-2020TurkeyISBANK CLIMATE CHANGE FACILITY II A               300.00 150.15              XPAF-32200M-2000-2020TurkeyETLIK HOSPITAL            1,100.00 50.00                XXPAF-32200M-2000-2020TurkeyGAZIANTEP HEALTH CAMPUS589.00120.00              XTotal, of which EIB financing volume10,607.282,314.70- co-financed with other IFIs2,044.70- benefiting from EU grants1,281.77* Includes other sources of funding than EU budget