Factsheet EIB financing in Central and Eastern Europe

EIB financing in Central and Eastern Europe

The EIB is the bank of the European Union. Founded in 1958 under the Treaty of Rome, it operates in the 27 EU Member States and more than 130 other countries. In 2012 it signed loans totalling EUR 52bn, with 92% of its financing being for projects within the Member States, EFTA, and Candidate and Potential Candidate countries. Outside the EU, the Bank supports projects that contribute to economic development in countries that have signed association or cooperation agreements with the EU or its Member States. It does so at own risk to its balance sheet, under mandates from the European Parliament and Council of the European Union or using budgetary funds provided by Member States or by the EU budget. It is the largest supranational borrower and lender in the world and the only international financial institution politically accountable to EU policymakers and institutions. This factsheet is one of a series covering regions of the world where the EIB is active.

EIB operations in Central and Eastern Europe

The EIB has been active in Central and Eastern Europe (CEE) since 1964, when it started lending in Turkey. In 1977, the EIB carried out its first operations in the former Yugoslavia, and in the aftermath of the political events of 1989 its activity significantly increased across the region as a whole. The first lending operations in Poland and Hungary were approved in 1990. A year later (April 1991), the EIB participated in the creation of the EBRD, the European Bank for Reconstruction and Development, in which it still holds a stake. The 10 CEE countries that have joined the EU since 2004 automatically became shareholders in the EIB, with representation in its governing bodies. As EU members, these countries benefit from the full range of EIB financial instruments and support. The EIB also actively provides help to those countries still on the path to EU membership, helping implement national development plans in line with EU standards. In the Eastern Partnership countries, the EIB finances those projects in line with the mandate given to it by the Council and the European Parliament, with a focus on transport, the environment and energy, and lending to small and medium-sized enterprises (SMEs). As well as supporting the EU accession process and neighbourhood policies, the EIB follows closely the new macro-regional strategies being developed for the Baltic and Danube, contributing its sectoral expertise to the planning process and offering, where appropriate, its financial support for projects. Progress of EIB lending in Central and Eastern Europe

In response to the continuing economic problems, the EIB Group, the World Bank Group and the EBRD launched in November 2012 a new Joint Action Plan (JAP), focused on supporting economic recovery and growth in Central and South Eastern Europe. The new JAP aims to rekindle growth in the region by supporting private and public sector initiatives, including infrastructure, corporate investment and the financial sector. It has been modelled on the successful 2009-2010 Joint IFI Action Plan that supported Central European economies affected by a liquidity crisis in the financial and corporate sector. The EIB Group has agreed to commit a minimum of EUR 20bn out of some EUR 30bn provided together by all IFIs involved. This support will mainly consist of long-term loans to the private and public sector, addressing priority areas such as SMEs, renewable energy and energy efficiency, innovation and convergence. EIB lending in Central and Eastern Europe 2004-2012: EUR 103bn

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Factsheet EIB financing in Central and Eastern Europe

The Western Balkans Investment Framework (WBIF) was launched in December 2009. It is a blending instrument developed jointly by the EIB with the European Commission, the EBRD, the CEB and other multilateral and bilateral institutions as well as EU Member States and Norway. The purpose of the WBIF is to blend available grants and loans to support priority projects for the region facilitating the preparation and financing of priority projects in the framework of the EU Pre-Accession process. To date, WBIF has approved grants totalling EUR 280m for 138 projects, for which EUR 7.7bn of loans have been committed by IFIs, of which EUR 2.3bn have been signed.

JASPERS (Joint Assistance to Support Projects in the European Regions) JASPERS aims to improve the quality of technical advice available to project promoters assisting in project development and projects to be co-financed by the EU, as well as in the preparation of highquality applications for EU funds. JASPERS was launched at the end of 2005 jointly by the European Commission, the EIB and the EBRD to help the 12 Member States joining the EU in 2004 and 2007 to make use of EU Structural Funds and the Cohesion Fund. In July 2008, KfW joined the group of sponsor institutions. In 2011, JASPERS began work in Croatia to help build up a pipeline of projects in anticipation of EU accession in 2013. JASPERS is managed by the EIB (integrated into its Projects Directorate). Its headquarters are located in Luxembourg and it has three regional offices, in Vienna, Warsaw and Bucharest (with a satellite office in Sofia). Between 2006, when JASPERS started operations, and end-2012, 652 assignments had been completed and 347 assignments were receiving assistance in all beneficiary countries. Over this period, 226 JASPERS-supported major project applications for funding were approved by the European Commission, for a total investment volume of almost EUR 39bn.

Breakdown by country (2004-2012)

Member States Bulgaria Czech Republic Estonia Hungary Latvia Lithuania Poland Romania Slovakia Slovenia Accession/Pre-Accession States Albania Bosnia and Herzegovina Croatia FYROM Montenegro Serbia Turkey Eastern Partners Armenia Georgia Moldova Russian Federation Ukraine The Eastern Partners Facility (EPF) The EIB has set up a facility at own risk to its balance sheet for Ukraine, Moldova, Georgia, Armenia, Azerbaijan and Russia of up to EUR 1.5bn, with a ceiling of EUR 500m for projects financed in Russia. The facility will enable the EIB to provide loans and/or guarantees that supplement the scope of the EIB external lending mandate. EUR m 74 926 2 326 11 188 1 429 12 804 1 704 1 369 31 065 6 134 3 274 3 633 25 593 238 1 436 2 553 409 308 3 623 17 026 2 034 58 420 282 543 1 731

EIB value proposal

The EIB is a AAA-rated, policy-driven EU financial institution that raises funds on the capital markets to on-lend for eligible investments supporting EU policies and priorities. It passes on the financial advantage it obtains through benefits such as attractive interest rates and long maturities to projects that score highly in terms of EU objectives and are consistent with the Banks commitment to supporting sound, sustainable investments. The EIBs extensive experience in financing projects (it has been active in countries outside the EU since 1963), its in-house sector expertise and its deep knowledge of European policies facilitate the identification of projects that match both national and EU priorities. The EIBs project appraisal covers technical, economic, financial, environmental and social aspects as well as credit risks, provides for the appropriate mitigants and conditionality and helps structure projects in line with EU standards. The EIB thus acts as a flag carrier for EU policies outside the EU, contributes to the dissemination of best practices and facilitates the participation of other financiers in EU priority projects. For further information on the EIB, visit its website www.eib.org
General questions: EIB Infodesk, info@eib.org Tel.: (+352) 437922000 Fax: (+352) 437962000

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