The European Investment Bank (EIB) is the European Union’s institution with EU Member States as shareholders, providing long-term financing. The EIB finances high-quality investments that contribute to the achievement of the EU’s key objectives, such as social and territorial cohesion, transition to climate neutrality, innovation in the digital economy, health, and life sciences. Its support is often decisive in attracting other investors by endorsing project quality, thus creating a leverage effect. The EIB is a non-profit public bank with financial autonomy, primarily raising funds by issuing bonds on financial and capital markets.
The EIB has committed to facilitating the mobilisation of €1 trillion in climate investments between 2020 and 2030. To achieve this, in July 2023, it decided to increase its funding for clean energy initiatives to €45 billion in additional funds allocated to projects aligned with the objectives of REPowerEU – the plan to transition the European Union away from imported fossil fuels. This supplementary funding, known as the REPowerEU+ package, will be allocated by 2027 and is expected to generate investments exceeding €150 billion in innovative net-zero-emission technologies (such as photovoltaic and solar thermal, onshore and offshore wind, batteries and electricity storage, heat pumps, geothermal, electrolysers and fuel cells, sustainable biogas, carbon capture and storage, and smart grids), as well as projects related to the extraction, processing, and recycling of critical raw materials. All funded projects must be bankable and adhere to rigorous social, environmental, and technical standards. Projects located in less economically developed EU regions, characterised by lower per capita GDP, are favoured.
The EIB offers financing terms that the market cannot provide alone, supporting the most urgent needs and addressing suboptimal investment situations resulting from market failures. Its funding is eligible for large corporates or groups, small and mid-caps, as well as Special Purpose Vehicles for project finance. It funds projects through loans (with a minimum of €25 million) and guarantees. It increasingly uses equity for small and mid-sized companies. Furthermore, it provides attractive pricing compared to commercial loans, reflecting the EIB’s advantageous funding conditions on the market. Financing durations match the economic lifespan of each project (generally up to 10 years for bullet loans or the equivalent for amortising loans, and even more than 30 years for project finance). For projects contributing to RepowerEU objectives, the EIB covers up to 75% of the total cost (compared to the usual 50%), and initial disbursements can reach up to 90% of the loan.
A project financed by the EIB goes through seven main stages: proposal, appraisal, approval, signature, disbursement, monitoring/reporting, and repayment. In the proposal stage, the EIB expects a complete feasibility study, a detailed expenditure description, and the envisaged financing arrangements. The project promoter must provide sufficient information for the Bank to assess if the project aligns with EIB lending objectives and has a well-developed business plan. During the appraisal stage, the EIB conducts a preliminary audit, considering aspects such as financial viability, economic profitability, social and environmental aspects, climate impact, technical evaluation, procurement, organisation, and the project promoter’s capabilities. The additionality of its interventions is also evaluated.
european economics regularly includes EIB financings in the portfolio of opportunities it assesses on behalf of its clients when they apply for our services to define and implement a comprehensive public financing strategy for their strategic projects.