WHAT IS THE EUROPEAN INVESTMENT BANK

The EIB is the European Union's bank. It is the only bank owned by and representing the interests of the European Union Member States. It works closely with other European Union institutions to implement European Union policy.

As the largest multilateral borrower and lender by volume, it provides finance and expertise for sound and sustainable investment projects which contribute to furthering EU policy objectives. More than 90% of its activity is focused on Europe but it also implements the financial aspects of the EU's external and development policies

The European Investment Bank is owned by the 27 EU countries. Headquarters is located in Luxembourg, but the bank also has a network of local and regional offices in Europe and beyond.

The European Investment Bank supports projects in the EU countries, and invests in future member and partner countries.

It borrows money on the capital markets rather than drawing on the EU budget. The money is lent on favorable terms to projects in line with EU policy objectives. It supports projects that make a significant contribution to growth, employment, economic and social cohesion and environmental sustainability in Europe and beyond. Its priorities, as defined in its Operational Plan, are:

• Supporting the creators of 80% of new jobs (small and medium sized enterprises SMEs)

• Addressing economic and social imbalances between the regions (cohesion)

• Protecting and improving the natural and urban environment (environmental sustainability)

• Promoting innovation through investment in ICT and human and social capital (innovation)

• Linking regional and national infrastructure of transport and energy (Trans-European Networks)

• Supporting a competitive and secure energy supply (sustainable energy).

It raises the bulk of its lending resources on the international capital markets through bond issues. Its excellent rating allows it to borrow at advantageous rates. It thus is able to offer good terms to its clients.

The bank generally finances one-third of each project but it can be as much as 50%. This long term, supportive financing often encourages private and public sectors to make investment which might not otherwise be made.

All the projects the bank finances must not only be bankable but also comply with strict economic, technical, environmental and social standards. Its corps of 300 engineers and economists screens every project, before, during and after we lend. The bank works hard to be accountable to EU citizens.

The EIB Group consists of the European Investment Bank and the European Investment Fund (EIF). The EIF focuses on innovative financing for SMEs. The EIB is the majority shareholder with the remaining equity held by the European Union (represented by the European Commission) and other European private and public bodies.

In 2012, its shareholders (the EU Member States) decided to increase its capital by EUR 10bn. This boosted its stability and allowed to plan for EUR 60bn additional lending between 2013 and 2015. Previously, when the financial crisis erupted in 2008, the EU asked to offset falling investment. This led to a more-than one-third increase in the total value of on-going, outstanding loans by 2011.

As well as its lending operations, the EIB also helps one-off schemes to address specific challenges. In 2008/9 many corporate clients approached it for the first time to access the RSFF scheme which supports research, development and innovation (RDI). It also makes special funding available to enhance private investment capacity for RDI into energy efficiency and emissions reduction in the automotive, rail, aviation and shipping industries. The bank works with the European Commission to use EU funds to support special programs to help countries hard-hit during the crisis.

Lending is by far its principal activity, accounting for around 90% of its total financial commitment. The EIB lends to clients of all sizes to support sustainable growth and jobs. Its support is often central to attracting other investors.

As well, the bank has a variety of sophisticated tools to help clients blend financing with additional sources of investment. It also offers advice to help maximize value for money.

Project loans for large developments in excess of EUR 25m

Intermediated loans are made via local banks

Structured finance provides additional support to priority projects

Guarantees: helping projects attract new investors

Project bonds: unlocking infrastructure funding

Equity & fund investment to catalyze further activity

Venture capital: helping fund managers invest in high-tech and growth SMEs

Microfinance has benefited from its long term commitment

Risk-sharing in research, development & innovation (RSFF)

Sustainable energy: maximizing investment (ELENA)

Green-tech demonstration support (NER300)

Infrastructure project advice for new EU members (JASPERS)

Urban development technical assistance (JESSICA)

Transport infrastructure cash-flow guarantees (LGTT)

Public-private partnership optimization (EPEC)

Flexible SME funding (JEREMIE)

The EIB supports the EU Neighborhood Policy in the Eastern Partner Countries by financing projects of significant EU interest.

The current EUR 3.7bn mandate runs from 2007 to 2013 and covers Russia, Ukraine, Moldova, Armenia, Azerbaijan, Georgia, and subject to future Council and European Parliament Agreement,  Belarus. This mandate is for projects of significant interest to the EU in transport, energy, telecommunications and environmental infrastructure, and as of mid-2009 has been extended to cover also loans for SMEs via banks in Eastern Partnership countries within the framework of the Joint IFI Action Plan. With a view to supporting EU external action without affecting the EIB's credit standing, the EIB is offered a Community budgetary guarantee for operations carried out outside the Community, including the Eastern Partner Countries.

To complement the Mandate, the EIB set up in December 2009 the Eastern Partners Facility (EPF), a EUR 1.5 bn facility under which financing will be extended at the EIB's own risk (i.e. without EC guarantee).  The EPF enables the Bank to support EU Foreign Direct Investments (FDI) in Eastern Neighbor countries, with a EUR 500 million ceiling for projects in Russia.  The bulk of the facility will be used to support investment-grade projects/structures; financing up to EUR 150 m can be structured pursuant to the Structured Finance Facility, which provides for a higher risk bearing capacity.  The EPF enables the Bank to play a pro-active role in supporting the resumption of FDI in Eastern Europe and thereby contribute to the modernization of these economies and to their integration with the EU economy.

In Ukraine the European Investment Bank (EIB) will support the extension of the existing metro line Dnipropetrovsk with EUR 152m over 25 years. The contract was signed in Luxembourg by the Ukrainian Finance Minister Yurij Kolobov and EIB Vice President László Baranyay.

The signature and implementation of this project is an example of the enhanced cooperation between the Republic of Ukraine and the EU.

The project concerns the extension of the existing metro line in Dnipropetrovsk by four kilometers and the addition of three stations, bringing the metro service to the city center to serve areas of high urban density and activity. The EIB loan will thus support a key transport infrastructure project for Ukraine with an investment size of EUR 305m in a co-financing structure with European Bank of Reconstruction and Development and includes a comprehensive technical assistance package supported under the Eastern Partnership Technical Assistance Trust Fund managed by the EIB.

The project’s implementation, expected to be completed by 2018, will have significant positive effects on the urban environment, such as noise reductions and reduced CO₂ emissions and will be fully in line with the climate change mitigation policy of the Bank.

The EIB strives to demonstrate to EU citizens that it furthers their interests and is accountable to them. It is required to follow some of these principles by law but others are its own voluntary policies.

Література:

1.www.webcrawler.com

2.www.ifc.org

3.encyclopedia2.thefreedictionary.com

4.www.eib.org

Науковий керівник:

кандидат економічних наук, доцент Т.В.Майорова.