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© EIB – 06/2008 – EN QH-AD-08-001-EN-C ISSN 1725-3551

E u r o p e a n I n v e s tmen t B a n k G r o u p • E u r o p e a n I n v e s tmen t B a n k G r o u p • E u r o p e a n I n v e s tmen t B a n k G r o u p • E u r o p e a n I n v e s tmen t B a n k G r o u p

Annual Report 2007 • Volume I Annual Report 2007

Activity andCorporate Responsibility Report

Volume I


The EIB Group’s 2007 Annual Report consists of three separatevolumes:• the Activity and Corporate Responsibility Report, present-

ing the EIB Group’s activity over the past year and futureprospects;

• the Financial Report, presenting the financial statements ofthe EIB Group, the EIB, the Cotonou Investment Facility, theFEMIP Trust Fund and the EIF, along with the related explana-tory annexes;

• the Statistical Report, presenting in list form the projectsfinanced and borrowings undertaken by the EIB in 2007, to-gether with a list of the EIF’s projects. It also includes sum-mary tables for the year and over the last five years.

On the CD-Rom enclosed with this brochure, readers will findinformation contained in the three volumes, plus the “Corpo-rate Responsibility 2007” document as well as the main bro-chures and other documents published in 2007 in the differentlanguages available.

The Annual Report is also available on the Bank’s websitewww.eib.org/report

Annual Report 2007


Volume I


Activity and Corporate Responsibility Report2EIB Group

Activity and Corporate Responsibility Report 3 EIB Group

Contents

EIB Group: key statutory figures 4

EIB Group: summarised consolidated balance sheet 5

Message from the President 6

The Corporate Operational Plan for 2008-2010 8

EIB Group Activity in 2007 12

➾ Balanced development throughout the Union 13➾ Support for innovation 16➾ Environmental sustainability 20➾ TENs: transport networks for Europe 25➾ Support for small and medium-sized enterprises 30➾ Sustainable, competitive and secure energy 33➾ Candidate and potential Candidate Countries 37➾ European Neighbour and Partner Countries 39➾ ACP, Asian and Latin American partner countries 43➾ EIB borrowing activity 47

Corporate Governance 50

➾ Working with others 51➾ Governance and accountability 53➾ Direct footprint and working responsibly 57➾ EIB Statutory Bodies 59➾ The Management Committee of the EIB 62➾ Organisation chart 63➾ EIF Statutory Bodies 68

Projects eligible for financing by the EIB Group 69

EIB Group Addresses 70


EIB Group: key statutory figures

(*) Resources raised under theglobal borrowing authorisation

given by the Board ofDirectors for 2007, including

‘pre-funding’ of EUR 77mcompleted in 2006 for 2007.

European Investment Bank

Activity in 2007 (EURmillion)

Signatures 47 820European Union 41 431Partner countries 6 389

Projects approved 56 455European Union 48 664Partner countries 7 791

Disbursements 43 420From the Bank’s resources 38 852From budgetary resources 4 568

Resources raised (before swaps) 54 725*Community currencies 32 835Non-Community currencies 21 890

Situation as at 31.12.2007

OutstandingsLoans from the Bank’s resources 324 753Guarantees provided 165Financing from budgetary resources 1 785Short, medium and long-term borrowings 254 221

Own funds 33 437Balance sheet total 301 854Net profit for year 1 633Subscribed capital 164 808

of which paid in and to be paid in 8 240

European Investment Fund

Activity in 2007

Signatures 1 918Venture capital 521Guarantees 1 397

Situation as at 31.12.2007

Portfolio 15 971Venture capital 4 388Guarantees 11 584

Own funds 965Balance sheet total 1 074Net profit for year 50Subscribed capital 2 770

of which paid in 554


EIB Group: summarised consolidated balance sheetAs at 31 December 2007 (in EUR ‘000)

ASSETS 31.12.2007

1. Cash in hand, balances with central banksand post office banks ........................................................................................................... 27 318

2. Treasury bills eligible for refinancing withcentral banks ......................................................................................................................................... 2 273 135

3. Loans and advances to credit institutionsa) repayable on demand ................................................................................................... 286 263b) other loans and advances ...................................................................................... 15 816 580c) loans ............................................................................................................................................................... 112 323 909

128 426 752

4. Loans and advances to customersa) loans ............................................................................................................................................................... 156 435 308b) specific provisions ................................................................................................................ - 37 050

156 398 258

5. Debt securities including fixed-income securitiesa) issued by public bodies .............................................................................................. 580 386b) issued by other borrowers .................................................................................... 10 435 661

11 016 047

6. Shares and other variable-yield securities ................................. 2 078 830

7. Intangible assets ............................................................................................................................ 3 972

8. Property, furniture and equipment .......................................................... 285 720

9. Other assetsa) sundry debtors ........................................................................................................................... 145 445b) positive replacement values ............................................................................. 9 060 783

9 206 228

10. Subscribed capital and receivable reserve,called but not paid ..................................................................................................................... 1 061 503

11. Prepayments and accrued income ............................................................. 30 658

TOTAL ASSETS 310 808 421

LIABILITIES 31.12.2007

1. Amounts owed to credit institutionsa) with agreed maturity dates or periods of notice ......... 341 757

341 757

2. Debts evidenced by certificatesa) debt securities in issue ................................................................................................. 259 280 003b) others .......................................................................................................................................................... 892 400

260 172 403

3. Other liabilitiesa) sundry creditors ........................................................................................................................ 1 429 085b) sundry liabilities ....................................................................................................................... 37 457c) negative replacement values ............................................................................. 12 945 900

14 412 442

4. Accruals and deferred income 270 724

5. Provisionsa) Pension plans and health insurance scheme ...................... 1 038 545

1 038 545

TOTAL LIABILITIES 276 235 871

6. Capital– Subscribed ............................................................................................................................................ 164 808 169– Uncalled ..................................................................................................................................................... -156 567 760

8 240 409

7. Consolidated reservesa) reserve fund ..................................................................................................................................... 16 480 817b) additional reserves ............................................................................................................. 6 067 178

22 547 995

8. Funds allocated to structured finance facility 1 250 000

9. Funds allocated to venture capital operations 1 690 940

10. Profit for the financial year:Before appropriation from Fund for general bankingrisks ........................................................................................................................................................................... 843 206Appropriation for the year from Fund for generalbanking risks ........................................................................................................................................... 0

Profit to be appropriated 843 206

TOTAL EQUITY 34 572 550

TOTAL LIABILITIES & EQUITY 310 808 421


Message from the President

Introducing the 2006 annual report last year, I em-phasised that 2007 would be a critical year for theEuropean Investment Bank in the implementationof its new strategy of taking more risk for more val-ue added. Ambitious lending targets were set inthe COP (Corporate Operational Plan), notably asregards the use of the SFF (Structured Finance Fa-cility). These targets were met and, in some cases,exceeded. For instance, the level of signatures un-der the SFF reached more than EUR 1.5bn, an al-most fivefold increase on 2006; at the same time,the EIB quadrupled its support for clean energysources, signing loans of more than EUR 2bn for re-newable energy projects. A number of new initia-tives became operational in partnership with theEuropean Commission, in particular the RSFF (RiskSharing Finance Facility for Research).

Outside the EU, a good start was made in imple-menting the new external mandate granted by theEU Council for the period 2007-2013. Althoughthe corresponding Guarantee Agreement with theCommission was signed only in August, signaturesin the enlargement, neighbouring and partnercountries reached more than EUR 6bn. In Turkey,theWestern Balkans and the Mediterranean partnercountries, the European Investment Bank is todaythe most active international financial institution.

To support this lending, the EIB raised nearlyEUR 55bn on the international capital markets –significantly more than the EUR 48bn raised in2006 – through 236 bond issues in 23 currencies.The European Investment Bank remains one of thelargest capital market issuers, and its ability to tapthese markets has held up strongly in the face ofthe financial turbulence since mid-2007. Quiteclearly, investors have been reassured by the EIB’sprudent risk management policies and its first-class credit rating, underpinned by the quality ofthe Bank’s shareholders.

Such results are a testimony to the hard work andprofessionalism of its staff. They are also a gaugeof the confidence of both the shareholders and

the Commission in the Bank’s ability to deliver onkey EU policies and generate value added throughits operations.

However, the Member States’ and Commission’strust brings additional responsibilities and chal-lenges, as is evident from the 2008-10 COP ap-proved by the Bank’s Board. The EIB will be expect-ed to continue to deliver on its commitments in thefields of convergence, transport (with a reinforcedfocus on priority TEN projects), energy (especiallyrenewable energy and energy efficiency), the en-vironment, the knowledge economy (i2i) and SMEfinancing.

Concerning this last area, following a consultationprocess with its banking partners, public authori-ties and SME associations, the EIB Group is current-ly looking at ways in which it can boost this sup-port still further.

This year, as a further step towards better integrat-ing Corporate Responsibility (CR) into the EIB’sstrategy, we have decided to consolidate our re-porting into a single document: the “Activity andCorporate Responsibility Report”. The main devel-opments that took place in 2007 are further ex-panded upon in the supplementary informationavailable on the CD-ROM and on our website.

As part of our objective to increase the transpar-ency of our activities, a sub-section on CR is alsobeing created on our website, where it will also bepossible to find more information on our CR poli-cies and practices. The EIB also decided to apply, asfrom June 2007, the provisions of the Aarhus Regu-lation (1367/2006) on public access to information,public participation in decision-making and publicaccess to justice in environmental matters.

Alongside the updating and publication of the En-vironmental and Social Practices Handbook, whichdescribes the internal processes and practices of


the Bank, our Environmental and Social Statementhas been revised and is undergoing a process ofpublic consultation. These initiatives will furtherenhance the way that we assess and mitigate theenvironmental and social risks associated with ourproject-financing activities.

Of particular note in 2007 as far as the Bank’s lend-ing activities outside the Union are concerned, theEconomic and Social Impact Assessment Frame-work (ESIAF) was modified in order to better meetthe requirements of each individual mandate andprovide a more refined measure of the Bank’s valueadded. Applied to all EIB external mandates, ESIAFwill enable the EIB to better evaluate and under-stand the impact of the projects it finances outsidethe Union, both ex ante and ex post, with a viewto further enhancing its CR policies and practicesin the future.

The European Investment Bank can now look backon 50 years of activity. Set up in 1958 to contrib-ute to the integration, balanced developmentand economic and social cohesion of the Europe-an Union, during its fifty years of operations it hasgained significant experience in financing invest-ment projects across a wide range of sectors. It hassupported the Union’s most important achieve-ments, fostering Europe’s economic growth; it hastaken up the challenge of six enlargements, increas-ing its capital from one billion units of account to

EUR 164.8bn; and it played a major role in the run-up to the euro, launching initiatives that paved theway for the transition to a single currency.

Fifty years after the Treaty of Rome, the Europeanadventure is only just beginning. It is now vital toembrace the challenges of the 21st century: theenvironmental challenge, and the fight against cli-mate change; the scientific and industrial challengeto ensure Europe’s position as a major economicpower; and the challenge of world solidarity, com-bating poverty in other parts of the world. The EIBis eager to help Europe face these challenges.

Philippe MaystadtPresident of the European Investment

Bank Group


The Corporate Operational Plan for 2008-2010

The EIB’s detailed business plan for the years to come is set out in a publicly available docu-ment: the Corporate Operational Plan, which covers the years 2008-2010. Since the EIB’s Boardof Governors endorsed the strategy of “taking more risk for more value added in support ofEU policies” in June 2005, the Bank’s efforts have concentrated on this overriding objective.

To be able to consolidate the implementation of this strategic decision, the EIB has refrainedfrom defining additional strategic priorities for 2008-2010. Inside the European Union,the EIB continues to focus on six policy priorities: economic and social cohesion and con-vergence in the enlarged Union; implementation of the Innovation 2010 Initiative; the de-velopment of trans-European transport and access networks (TENs); support for small andmedium-sized enterprises; protecting and improving the environment; and sustainable,competitive and secure energy.

In line with the new external mandates defined in the Council Decision of December 2006,depending on the mandate the lending objectives outside the EU cover: pre-accession sup-port; private sector development; security of energy supplies; environmental protectionand improvement; and support for a EU presence through foreign direct investment and thetransfer of technology and know-how.

Challenge and response

In its operating environment, the EIB faced anumber of challenges in 2007, which will continueto loom large. Despite the recent volatility in thefinancial markets, the Bank has provided a steadyflow of investment financing in Europe, particularlyin sectors where market participants are reluctantto become involved. The continued demand forloans for infrastructure investment is juxtaposedby the growing need for both loans and risk capi-tal for innovation. Also, the effects of the progres-sive enlargement of the EU are impacting on theEIB’s role at national and EU level, resulting in anincreasing policy input from the Bank. At the sametime, stakeholders’ expectations are high and a so-phisticated dialogue with civil society is an ongo-ing requirement.

The Bank’s response to the priority lending objec-tives and the external challenges has been to en-sure a sound funding policy and the pursuit of

relevant lines of business with appropriate instru-ments. There requirements are reflected in morevalue added in lending, a new approach to risk,new financial instruments, increased cooperationwith the European Commission and others, finan-cial self-sufficiency, effective financial planning,priority targeted resource allocation and increasedefficiency.

Risk-taking and new financial instruments

The approach of taking more risk when requiredfor strategic objectives will be a continuing featureof the EIB’s activities. Refinements of the Bank’scredit policy, loan grading and risk pricing systemswill strengthen the capacity for risk taking and en-hance the value added provided by the Bank. Mod-ifications of the credit risk policy concerning un-secured lending to banks and corporate enterpris-es, financial collateral and loan substitutes – in par-ticular asset-backed securities and covered bonds –


will also increase the EIB’s ability to cater for moreinnovative structures as well as for operations pro-viding capital relief to the Bank’s borrowers. A newinternal rating methodology, which complies withEU Directive 2006/48/EC, has been extended to newasset classes and refined to assist the Bank in takingon more risk when required for strategic objectives.

The development of higher-risk operations sup-ported by dedicated reserves from the Bank’s ownresources and from the European Commission willplay an important role in the future implemen-tation of the strategy. The amounts involved areconsiderable. Under the Structured Finance Facil-ity (SFF) total reserves of EUR 3.75bn have beenallocated as a capital cushion for senior loans andguarantees incorporating pre-completion and ear-ly operational risk; subordinated loans and guar-antees ranking ahead of shareholder subordinat-ed debt; mezzanine finance, including high-yielddebt for rapidly growing or restructuring industrialcompanies; project-related derivatives; and equity-type instruments. The Risk Sharing Finance Facilityhas EUR 2bn as a capital cushion, for which the EIBhas earmarked EUR 1bn from the SFF and the Euro-pean Commission is contributing EUR 1bn from the7th Research Framework Programme. This enablesmultiple leveraging with loans specifically aimedat financing investment in research, developmentand innovation. EUR 500m has been earmarkedfor the Loan Guarantee Instrument for TEN-Trans-

port Projects, plus an equivalent amount from theCommission, in order to provide guarantees forstandby credit facilities in TEN projects to coverrevenue shortfall risks during the ramp-up operat-ing period of these projects. EUR 500m of the SFF isfor risk-sharing finance for private sector develop-ment in the Mediterranean partner countries. TheEUR 1.75bn balance is available for approved ob-jectives under the Innovation 2010 Initiative, TENsand energy. Market demand is increasing rapidly.At end-2007 SFF loan signatures had increased toEUR 2.8bn, up from EUR 1.3bn a year before.

Cooperation with the EuropeanCommission

Cooperation with the Commission is not limited torisk-sharing arrangements. Co-programming andco-financing are widespread. Recent joint initia-tives have included JASPERS, making technical as-sistance available to help beneficiary countries toprepare major viable infrastructure projects thatwill be supported by the EU Structural and Cohe-sion Funds. The European Bank for Reconstructionand Development is also a partner of JASPERS. JES-SICA is a joint initiative of the Commission and theEIB in cooperation with the Council of Europe De-velopment Bank, providing Member States andEuropean Regional Development Fund managers


with tailored solutions for financing a wide rangeof urban renewal and development projects. UnderJEREMIE, the EIB Group and the Commission im-prove small and medium-sized enterprises’ accessto finance, including first-time entrepreneurs andmicro-credit in developing regions. The EuropeanInvestment Fund has been mandated by the Com-mission to carry out its Competitiveness and Inno-vation Framework Programme, with a very com-prehensive range of financial instruments worthEUR 1.1bn. Also, under EPEC, the European PPPExpertise Centre, the Commission and the Bankwill disseminate information and best practice forthe benefit of Europe’s public PPP task forces andprovide policy and programme support in PPP pro-curement and management to its public sectormembership.

Outside the European Union, in addition to themaximum EUR 27.8bn in external mandates overthe period 2007-2013, the EIB and the Commis-sion are co-funding the ACPWater Project Prepara-tion Facility. The Bank also manages the EU-AfricaInfrastructure Trust Fund, which is co-financed by

the Commission and 10 Member States. The aim ofthis innovative facility is to increase sustainable EUfunding for African regional and trans-border infra-structure by combining public grant money withlong-term loans.

Financial planning and self-sufficiency

The implementation of the strategy must be recon-ciled with the EIB’s long-term financial sustainabil-ity objective. Due to the nature and mission of theBank, a significant part of the benefits producedderives from the contribution made by the EIB asa policy-driven institution. The Bank’s net surplus isdriven by the return on investment of own fundsand cost-covering intermediation revenue gener-ated by loans. As a public institution, the EIB es-chews speculative exposures to financial risks andsets its financial risk tolerance at a level to ensurethe long-term financial sustainability of the Bank.Due to several factors, the return on own funds isexpected to follow a moderately decreasing pat-tern in 2008-2010. Intermediation revenue is es-sentially limited to covering administrative costsand pricing credit risk. Whilst anticipating the value-added benefits of the Bank’s participation in morecomplex and riskier activities, the increased creditdefault risk could generate a negative effect on ex-pected cost coverage, and controlling heightenedlevels of reputational, legal and operational risk is re-source-intensive. Similarly, activities such as techni-cal assistance and other advisory work are importantat the policy level but do not directly contribute tooperational income.

On the basis of the Corporate Operational Plan2008-2010 and the present capital situation, thanksto targeted resource allocation and increased effi-ciency the EIB will nevertheless not be needing acapital increase before 2010, and it will be able tofund this capital increase from internally generatedreserves, not from cash contributions from Mem-ber States.

Disbursements, contracts signed and projectsapproved(2003-2007)

(billion)

10

20

30

40

50

60

020072003 2004 2005 2006

DisbursementsSignaturesApprovals


Finally, with a view to reinforcing the capital struc-ture of the European Investment Fund for futuredevelopments, the authorised share capital wasincreased by 50% to EUR 3bn in 2007. The EIB hastaken up 100% of its rights to new shares; the Com-mission will take its rights up gradually over fouryears; and the shareholding financial institutionshave taken up over 70% of their rights, resulting inEIF own funds of EUR 965m. This should ensure theEIF’s financial sustainability until at least 2013, withthese funds being deployed progressively duringthe intervening period.

The EIB’s Boardof Directors

EIB Group Activity in 2007



Balanced development throughout the Union

The European Investment Bank has always been the bank for the regions, the assistedareas in the European Union that also receive grant aid from the Structural Funds. In linewith the European Union’s renewed Cohesion Policy for 2007-2013, the EIB has concentratedits regional development lending on the newly-defined convergence regions, including thephasing-out and phasing-in regions. These are the poorest 113 regions in the EU-27, with apopulation of 190 million. Outside convergence regions, the new regional policy promotesthe objectives of competitiveness and employment, which the EIB supports mainly via lend-ing under its Innovation 2010 Initiative, the development of trans-European networks, smallandmedium-sized enterprises and environmental sustainability.

The Bank has set itself a medium-term target of 40-45% of total loans in the EU for conver-gence purposes. In 2007, EUR 13.8bn went to investment in the convergence regions, whichwas within the target range.

Structural Programme Loans for the newMember States

A large part of the lending for convergence tookplace in the twelve Member States that joined the EUsince 2004. In 2007, EIB loans in these countries to-talled EUR 5.75bn. Most of the loans were granted intandemwith grant finance from the Structural Funds.

Co-financing between the Structural Funds andthe Bank can be arranged on a project-by-projectbasis or on a programme basis. By contributing tothe funding of a number of larger or smaller in-vestments included in an investment programmein a given sector or region, the EIB can promotegrowth-enhancing conditions and factors leadingto real convergence for the least developed Mem-ber States and regions. This EIB product is called aStructural Programme Loan.

Thus, in 2007 the Bank decided to lend EUR 700mto co-finance Bulgaria’s national contribution tothe implementation of investment priorities andmeasures with the EU Cohesion and StructuralFunds. The eligible projects are identified by theoperational programmes of the National StrategicReference Framework and the rural developmentprogramme of the European Agricultural Fund for

Rural Development for the period 2007-2013. Theco-financing facility will initially be used for trans-port and environment sector investments but maybe extended to the other EU Funds’ programmesfor regional development, economic competitive-ness, human resources development and agricul-ture, if requested by the Bulgarian Government.Total EU Cohesion and Structural Fund resourcesavailable to Bulgaria for this period amount to someEUR 6.8bn. The Bank’s Structural Programme Loancan also finance a large number of relatively smallsub-projects which, due to their small size, wouldnot qualify for direct EIB financing. Through thisframework loan, the EIB can provide pre-financingwhen needed and offer long-term co-financing onthe most attractive terms.


Across all sectors

Within the convergence regions EIB-financed projectscan be found in all sectors. In 2007 the most impor-tant were transport (32%), energy (15%), health andeducation (12%), and water and sanitation (7%).

Loans for communications infrastructure reachedEUR 5.5bn. An important part of that amount wasa large EUR 1bn loan for the construction of theMilan-Naples section of the high-speed/high-capacity rail network in Italy. The project is part ofthe priority TEN corridor linking Berlin to SouthernItaly by rail. It is a significant investment in sustain-able transport and will facilitate access to conver-gence regions in the south of Italy.

Energy investment in convergence regions ac-counted for EUR 2bn in EIB loans. In Sines, Portu-gal, the Bank supported the construction of a co-generation plant with a loan of EUR 19m. Thisloan followed on from an earlier one of EUR 39m.The additional amount was made possible be-cause in exceptional circumstances the ceiling forBank financing may be raised from 50% to 75% ofthe project cost. The new plant will produce threetimes more electricity than the plant it replaces,thus generating substantial gains in energy effi-ciency. As the project’s surplus electricity will be

supplied to the national grid, it will replace powergenerated by other fuel power plants and therebyreduce CO2 emissions by an estimated 20%.

With EUR 1.7bn in EIB loans for investment inhealth and education, this sector plays an impor-tant role. One of the health projects in Spain con-cerned the construction of a new general hospitaland seven day-care health centres in the conver-gence area of Mieres, central Asturias. The projectfacilitates the region’s role as a healthcare provid-er and improves the quality of and access to hos-pital accommodation and services. As the projectincludes an element of clinical education, trainingand research, it also contributes to the Bank’s Inno-vation 2010 Initiative.

EIB-financed industry investment in the conver-gence regions amounted to EUR 1.6bn in 2007. TheEUR 71m loan to Glaverbel Czech is an example ofthe social and economic impact local industries canhave. The loan will be used for the construction ofa new float glass line in Teplice and the expansionof automotive glass production facilities in nearbyChudeřice, both in Ústí, a Czech convergence re-gion. Ústí has a centuries-old tradition of industrialand agricultural production, especially in the pow-er industry, coal mining and chemicals. The declineof these traditional industries has led to the regionhaving the highest jobless figures in the Czech Re-public. Glaverbel’s project, however, will contributeto regional economic development and diversifyemployment away from the traditional industries.The project is expected to create 100 new jobs inChudeřice and another 70 in Teplice.

Obviously, many of the projects in the conver-gence regions support other priorities as well. In2007, 23% of individual lending to support the Lis-bon Agenda, which aims to establish a competi-tive, innovative and knowledge-based Europeaneconomy, went to convergence regions, as did 33%of lending aimed at improving the natural environ-ment, 33% of lending for trans-European transportnetworks and 15% of energy project lending.

Convergence in the EUBreakdown of direct loans signed in 2007 bysector

Amount Total%

Communications infrastructure 5 476 40

Energy 2 036 15

Health, education 1 689 12

Water, sanitation, waste 1 025 7

Urban development 827 6

Industry 1 584 11

Other services 1 175 9

Total individual loans 13 812 100


New financial products

The EIB also made new financial products avail-able to the regions. In Poland, the Bank participa-ted with PLN 200m (EUR 52m) in an issue of publicsector-covered bonds for financing small and medi-um-scale projects implemented by public sector enti-ties in the fields of infrastructure, environment, energy,health and education. This substitute for a straightfor-ward credit line is backed by loan receivables of theBRE Bank Hipoteczny S.A. The so far unique operationincreases the number of EIB partner financing institu-tions in Poland and broadens the possibilities of EIBsupport for themodernisation of local infrastructure.

JASPERS

In the upstream phase of the preparation of largeinvestment projects, JASPERS has become a keyinstrument in the cooperation with the EU Struc-tural Funds, by helping the 12 new Member Statesto present viable projects and therefore to accessmore rapidly and efficiently the substantial sup-

port from the European Regional DevelopmentFund and the Cohesion Fund that will be availableover the next few years.

JASPERS stands for Joint Assistance to SupportProjects in European Regions. Bringing togetherthe technical expertise of the European Commis-sion, the EBRD and the EIB, it offers technical assist-ance free of charge. At the end of 2007 the teamconsisted of 55 experts, working not only fromLuxembourg, but also from Bucharest, Vienna andWarsaw, where offices were opened in the courseof the year. The Bucharest Office covers projectpreparation in Bulgaria and Romania, the ViennaOffice the Central European countries, while theWarsaw Office covers Poland and the Baltic States.

The JASPERS Action Plan advanced well in 2007,with JASPERS assisting in the preparation of 261projects and horizontal tasks aimed at catalysing oraccelerating capital investment of over EUR 32bn inthe coming years – this across all 12 new MemberStates and a wide range of strategic sectors, with afocus on the environment (water, wastewater andsolid waste), transport, and energy efficiency andrenewable energy.


Support for innovation

Since the establishment of the Lisbon Agenda in 2000, the EIB has financed investmenthelping to establish a competitive, innovative and knowledge-based economy, capable ofsustainable growth, creating more and better jobs and greater social cohesion. Under its In-novation 2010 Initiative, the goal was to lend EUR 50bn in the period 2000-2010, a targetwhich was already reached in the course of 2007, when investments in RDI, education andICT accounted for EUR 10.3bn in new EIB loans.

Research, development and innovation

RDI is shorthand for one of the three lending priori-ties under the Innovation 2010 Initiative. Encom-passing more than research and development, it in-cludes the transformation of new knowledge intoproductive economic activity. Some EUR 6.7bn wentto RDI in the EU in 2007 and another EUR 455m toRDI in Turkey.

Financial instruments developed by the Bank insupport of investment underpinning the LisbonAgenda have a key role to play in RDI finance. The

The EIB-Universities Research Action

Education ranks high on the European Invest-ment Bank’s agenda. It is a key contributor to theLisbon Strategy and underpins the Bank’s activi-ty in fostering social cohesion and promoting in-novation. In parallel to its lending activity in thissector, the Bank has developed the EIB-Universi-ties Research Action to channel its institutionalsupport to higher education and academic re-search. The Action is designed to respond in a

consistent way to the requests coming from European universities – notably for financialassistance, but also for research inputs. It also facilitates the academic and research workof the Bank’s staff.www.eib.org/universities

Risk Sharing Finance Facility (RSFF), set up jointly bythe EIB and the Commission and operational sincemid-2007, is particularly relevant. The RSFF is builton the principle of credit risk-sharing between theCommission and the EIB and extends the Bank’s abil-ity to provide loans or guarantees to projects of pro-moters with a low or sub-investment grade risk pro-file. This involves taking financial risks beyond thosenormally accepted by investors. The scheme pro-vides a wealth of opportunities for new and inno-vative financing solutions for the private sector andthe research economy. The take-up has been rapid,with RSFF loans going to renewable energy, auto-motive, engineering and biotechnology projects.


In coordination with the European Strategy Forumon Research Infrastructure (ESFRI) and the Euro-pean Intergovernmental Research OrganisationsForum, the EIB is in discussion with promoters oflarge research infrastructure investments, in par-ticular the 35 EU-scale projects with an estimatedcost of EUR 14bn. ESFRI brings together representa-tives of EU Member States and Associated States aswell as the European Commission and aims to de-velop a coherent approach to policy-making on re-search infrastructure in Europe. The specific natureof these projects, implemented over very long timeperiods, involving dedicated scientific equipment,complex operating arrangements and, last but notleast, long-term financial commitments from thenational authorities promoting the project, requirenew, unconventional solutions, built on a viablesharing of risks among all parties concerned.

Education and training

EUR 1.3bn in EIB loans went to education in 2007.The bulk of the Bank’s investments in the educa-tion sector to date have been in support of infra-structure – buildings, facilities and equipment – re-quired for the acquisition of knowledge and skills.For instance, in the autonomous community of Va-lencia, Spain, the Bank financed the construction,rehabilitation and extension, as well as furnishingand equipping of primary, secondary and voca-tional education facilities and other related educa-tional infrastructure.

More recently, a big effort has been made to pro-mote education projects that will improve thequality of education more directly. This impliesgiving greater consideration to investments in de-mand-side measures and intangible assets, suchas student loans and academic RDI, that will widenaccess to and enhance the quality of education. InHungary for example, the Bank lent EUR 150m for astudent loan scheme that is part of a wider nation-al strategy to increase the quality of higher educa-tion, encourage participation and enhance equalopportunity of access. The scheme already has atrack record of improving the accountability of theinstitutions, reaching those students who comefrom poorer families, and has systems and proce-dures in place to maximise efficiency and ensurethe long-term sustainability of the student loansystem. The future may also see the Bank financinginvestment in modern curricula, improved meth-ods of instruction and, especially, better teachingat European schools and universities.

Signatures Innovation 2010 Initiative

(million)

2007 2000-2007

Information and communications technology 1 597 11 947

Education and training 1 262 12 852

Research, development and innovation 7 155 30 179

Total 10 289 55 994


Innovative finance for innovation

The symbolismwas appropriatewhen the Risk Sharing Finance Facility (RSFF) was launchedon 5 June 2007, the agreement being signed in parallel by Commissioner Potočnik in Ham-burg during the 4th European Conference on Research Infrastructures and by EIB PresidentPhilippe Maystadt at the annual meeting of the EIB’s Board of Governors in Luxembourg.Backing up RDI with finance, the RSFF is the result of effective cooperation between the EIBand the European Commission. With a capital contribution of EUR 1bn each from the EU’s7th Research Framework Programme and the EIB’s Structured Finance Facility, the RSFF isexpected to leverage EUR 10bn of additional financing for RDI.

The take-up proved almost immediate. Already by September eight financing operationsconcerning renewable energy technologies, energy efficiency, automotive components, en-gineering and biotechnology projects had been concluded for a total amount of EUR 359m.By year-end a total of EUR 459m had been lent under the RSFF for projects located in fourMember States.

The RSFF can finance small and large companies with direct loans but also via intermedia-tion. In Germany, for example, a credit line was set up for innovative small and medium-sized automotive suppliers to finance their RDI activities through the sale and lease-backof their intellectual property rights to Deutsche Leasing, a leading leasing institute. Underthe RSFF window the Bank is aiming for an overall increase in innovation lending in Europein 2008, with a growing number of smaller operations.

Information and communicationstechnology

ICT is a key sector for implementing the LisbonStrategy and accounted for EUR 1.6bn in loans in2007. These involve major projects requiring largeloans, such as British Telecom’s investment in thenext generation of telecommunications services,which took up EUR 455m, and Telefonica’s newUMTS broadband mobile telephone network inSpain, for which the Bank lent EUR 375m.

A Memorandum of Understanding was signed be-tween the Commission and the EIB in 2007 to sup-port the EU regulatory framework for electroniccommunications and notably the EU policy to re-duce the “broadband gap”. The investment require-ments for next generation networks are potentiallylarge and the Bank is expected to play an increasingrole in encouraging private sector investment insuch infrastructure. Moreover, the Bank is support-ing the establishment of alternative broadband ac-cess platforms, which may include wireless technol-ogies and require new types of financing options.


The EIF and innovation

The European Investment Fund, the EIB’s subsidiary,plays an important role in implementing the LisbonStrategy by investing in venture capital funds thatprovide innovative SMEs with equity resources.

In recent years, the EIF has widened the scope ofits venture capital investments beyond early-stagefunds and upstream to technology transfers, theprocess by which R&D results are transformed intomarketable products or services. The Fund has nowalso been mandated by the European Commis-sion to manage a EUR 1.1bn facility within the EU’sCompetitiveness and Innovation Framework Pro-gramme (CIP) covering the period 2007-2013. TheCIP aims to increase the competitiveness of Euro-pean enterprises, support innovation and providebetter access to finance for SMEs. Significant re-sources will be devoted to clean-tech activities.


Environmental sustainability

There are three dimensions to the EIB’s environmental responsibility. First, for all theprojects it finances, the Bank pays special attention to the issue of environmental sustain-ability, focusing on the environmental impact assessment of the investments proposed andthe adequacy of mitigating measures and, more than ever before, on the energy efficiencyof proposed technologies or processes. As a minimum, the Bank ensures that the projects itfinances are compliant with EU environmental principles and standards.

Second, a large part of the EIB’s lending is specifically targeted at protecting and improvingthe natural and built environments and fostering social well-being in the interest of sustain-able development. The Bank supports projects that focus on climate change, protecting na-ture and biodiversity, dealing with the links between the environment and health, and pro-moting the sustainable use of natural resources andmanagement of waste.

The third dimension is for the Bank to assume environmental responsibility for its corporateenvironmental footprint. Although the EIB’s footprint in this sense does not have the samemagnitude as its footprint from financing projects, the Bank works continuously to improvethe environmental performance of its buildings and the housekeeping of its offices (see sec-tion on “Direct footprint and working responsibly”).

The lending target for environmental protectionand sustainable communities is 30-35% of all loans,both in and outside Europe. In line with this objec-tive, the Bank’s environmental lending in the EUand EFTA countries came to more than EUR 13bnin 2007, while outside the EU it accounted forEUR 1.6bn, together amounting to 30.5% of totallending.

Natural environment

For the natural environment, priority is given to in-vestment and action that promote climate changemitigation, projects in the areas of water, wastewa-ter and solid waste management and air pollutionabatement.

With regard to climate change, the Bank – guid-ed by the Kyoto Protocol – is supporting efforts toachieve lower carbon emissions by financing in-vestments in fuel switching, the development ofrenewable energy and energy efficiency. Financingenergy investment is also a specific policy objec-tive of the EIB and the Bank’s approach to transportis equally strongly influenced by climate changeconsiderations (see also sections on “TENs: trans-port networks for Europe” and “Sustainable, com-petitive and secure energy”).

In renewable energy, the Bank’s role is to sup-port the development of new technologies and to


help these technologies attain an industrial scale.In Spain, the Solucar solar power plant, for whichthe EIB lent EUR 50m in 2007, promotes the useof indigenous renewable energy and contributesto combating climate change. The investment fi-nanced includes the construction and operationof two grid-connected solar power plants using so-lar concentration technologies. These technologiesare remarkable. At the core is a field of heliostats(solar reflectors), placed in semi-circles at groundlevel around a tower with a thermal solar receivermounted on top. The heliostats track the sun’s po-sition and concentrate the solar radiation on to thereceiver. The receiver is a large heat exchanger, inwhich the solar heat vaporises water into steam,which then drives the electric generator by meansof a steam turbine. The location of the plants,20 km west of Seville, is an asset. It benefits frombeing in one of the sunniest places in Europe, withaccess to river water for cooling and ready accessto high-voltage transmission lines nearby.

In 2007, the EIB signed contracts to finance waterand wastewater projects to the tune of EUR 2.6bn,not only inside the European Union but outside aswell. In Panama, for example, the Bank will support

Environmental and socialpolicy

In 2007 the EIB’s Environmental andSocial Practices Handbook was up-dated and made available to the pub-lic. It describes the internal processesand practices of the Bank, particular-ly the work carried out by its ProjectsDirectorate (PJ), to ensure that all fi-nancing activities are consistent withits environmental policy. In 2008, theBank intends to publish a new State-ment on its Environmental and So-cial Policy (Principles and Standards),as a strong reaffirmation of its envi-ronmental concerns and credentials.This Statement will be subject to apublic consultation process beforepublication.


the improvement of sanitation and environmentalconditions in Panama City and bay area throughwastewater treatment. By increasing the propor-tion of treated wastewater from less than 5% toclose to 50%, the project will improve the qualityof life of local residents, particularly in poor areasthat were previously without sanitation services,and will help to develop tourism and fishing in the

region. In Maseru, the capital of Lesotho, the Bankwill finance an investment programme adapted tothe different income levels of the beneficiaries andincluding connection to central sewer networks aswell as the construction of low-cost on-site sanita-tion facilities. Together with the refurbishment ofan existing wastewater treatment plant and theconstruction of a new plant, this will help to reducethe pollution of Maseru’s raw water sources andlower the incidence of water-related diseases.

Solid waste projects are playing a growing rolein the Bank’s activities in order to assist Europeanpolicy on recycling landfill, greenhouse gases andnon-fossil energy. With a recent project in Alkmaar,in the Netherlands, the EIB supported the construc-tion of a solid biomass combustion unit next to anexisting incineration plant. The unit provides treat-ment capacity for construction and demolitionwaste wood, the non-compostable wood part fromgreen waste, bulky refuse delivered at bring sites,and wooden packaging material and pellets. Mostof these solid waste wood volumes arise within theregion and were formerly exported to Germany forincineration. The project improves the current dis-posal practices, supports reduction targets for bio-degradable waste wood going to landfills and putsan end to the long-distance transport of waste.

Loans for industrial pollution abatement account-ed for EUR 194m in 2007. Among the projects wereenvironmental improvements at paper mills inGermany and Portugal. In Germany, the Bank lentEUR 34m to Myllykoski Corporation, which runsthree paper mills in the country. The loan went toemission reduction in two of the paper mills, invest-ment in energy efficiency in all three, and an RDIprogramme comprising process and product inno-vation. In Portugal, EUR 80mwent to Portucel, also aprivate sector company, for environmental upgrad-ing, including air pollution abatement, at its threefactories. Following the necessary investments, thefactories will conform with best available technol-ogy and fulfil the requirements of the IntegratedPollution Prevention and Control Council Directives.

Individual loans2003-2007: EUR 56.5 billion

(million)

2 000

4 000

6 000

8 000

10 000

14 000

12 000

020072003 2004 2005 2006

Climate changeEnvironment and health

Urban environmentNature, biodiversity and natural resourcesNatural resources and waste management

Environment and quality of life in the EUIndividual loans in 2007

(million)

Total

Climate change 3 385

Environment and health 4 088

Urban environment 5 426

Nature, biodiversity and natural resources 34

Natural resources and waste management 89

Total individual loans 13 021


Sustainable communities

For the built environment, the emphasis is on pro-moting sustainable cities and communities, in linewith the EU’s integrated urban development ap-proach, covering all economic, social, environmen-tal and human capital dimensions. This comprehen-sive approach to promoting sustainable investmentfor convergence, growth and jobs in Europe’s citiesis based on the “Leipzig Charter”, the common prin-ciples and strategies agreed at the Informal Minis-terial Meeting that took place in that city in May2007. Where appropriate, the EIB offers financialsupport to promoters of urban renewal projectsthrough a product mix which includes its Struc-tured Finance Facility and advisory services, notablyfor the creation of urban development funds.

A new instrument of the EIB’s urban activity is JES-SICA, which stands for Joint European Support forSustainable Investment in City Areas to stimulateinvestment under integrated urban developmentplans. JESSICA allows Managing Authorities to useresources from the Structural Funds to invest in ur-ban development funds through recyclable andrecoverable financial mechanisms, such as equity,guarantees and loans. The first urban developmentfund under JESSICA was launched in Saxony, Ger-many, in 2007. Appropriately, a key partner in thispilot project is the Municipality of Leipzig.

Post-2012

TheEuropean InvestmentBank’s EUR100mPost-2012 Carbon Fund was launchedin Ljubljana during the 2007 EIB Forum.The Post-2012 Carbon Fund is designedto underpin the market value of car-bon emission reduction units producedafter the expiry of the current KyotoProtocol in 2012. The Bank and its part-ners have designed the Fund to encour-age and facilitate investment in projectsthat will give rise to carbon credits in alonger-term time perspective. Throughthemechanism of the Fund, “patient andcatalytic public sector capital”will serveto enhance the role of carbon credits asa project finance instrument. The Fundwill also support friendly projects, suchas renewable energy, energy efficien-cy, forestry and greenhouse gas-relatedmeasures between 2013 and 2022.

Investment in health facilities is also part of creat-ing sustainable communities. In 2007, improve-ments to existing hospital infrastructure and thecreation of new medical establishments in the EUtook up EUR 2.1bn in EIB loans.

The integrated approach to urban developmentmay be observed at work in Venice. Here the Banklent EUR 120m in 2007 for schemes included in acomprehensive investment programme basedon an integrated long-term strategy for urbanrenewal.


The investment in urban infrastructure, historicbuildings and educational and social facilities con-tributes to the city’s economic viability, environ-mental sustainability and the quality of life of itsinhabitants. One urban scheme aims at diminish-ing the effects of the “moto ondoso”, the damag-ing wave motion created by boats, by optimisingand reorganising water traffic and logistics on theLido island. The ageing and declining populationof the city will benefit from the transformation ofthe historic Penitenti and San Lorenzo buildingsinto homes for the elderly. In addition, a bypass onthe mainland of Greater Venice, in Mestre, will re-duce traffic congestion and enhance the environ-ment. A high-tech component is also included:the establishment of a Wi-Fi network allowing fora better connection between public buildings, anew service with high value added offered to localenterprises and the introduction of a tourist-dedi-cated Radio Frequency Identification system. Typi-cally this loan does not stand alone. Other financ-ing operations that were recently concluded in and

around the city of Venice benefited Venice Tram-way, Ca’ Foscari University and new Mestre hospitalprojects, the regional light railway and small andmedium-sized enterprises in the region throughVeneto Sviluppo.

Combining improvements to the natural and urbanenvironments in France, the Ministry for Ecology andfor Sustainable Development and Town and Coun-try Planning, the EIB and Groupe Caisse d’Epargnejoined forces in 2007 to support public investmentfor the construction or refurbishment of public build-ings as part of the effort to combat global warmingand improve the urban environment. The objectiveis for schools and colleges, crèches, administrativebuildings, sports and leisure centres, and commu-nity centres to move beyond existing heating andinsulation standards and achieve an outstandinglyhigh level environmentally and in terms of energyperformance. Some 400 projects have already beenidentified under the programme, to which the EIBcan contribute up to EUR 350m.


TENs: transport networks for Europe

Trans-European transport networks (TENs) provide high-quality infrastructure in the Euro-pean Union and connect the EU with the Accession Countries and the Neighbours to theSouth and East. Priority TENs are also one of the two legs of the European Action for Growth(the other is research, development and innovation), the 2003 initiative to strengthenEurope’s long-term growth potential.

Underpinning the Action for Growth, the EIB setitself a EUR 75bn lending target for investmentin large infrastructure networks in the period2004-2013. In 2007, the Bank lent EUR 7.4bn forlarge infrastructure networks across the Union,which is fully in line with the target. Rail, which isbecoming an increasingly important priority sector,accounted for EUR 3.3bn of EIB lending, roads ac-counted for EUR 2.7bn, while aviation projects tookup EUR 630m, maritime investment EUR 434m,and sundry infrastructure EUR 426m. Lending fortransport TENs in Spain was particularly important,amounting to EUR 2.2bn and including two high-speed train projects on the Cordoba-Malaga andMadrid-Valladolid lines.

Outside the EU, the EIB lent EUR 916m for exten-sions to transport TENs. In the Accession and Po-tential Accession Countries lending accounted forEUR 686m and in Neighbouring Countries to theEast it amounted to EUR 230m. In Ukraine, the Banklent EUR 200m for the rehabilitation of the M-06road, which is the major route between Ukraineand the European Union, the Pan-European Corri-dor III, linking the capital of Ukraine with Hungary,Slovakia and Poland.

Public-private partnerships

The EIB is one of the biggest funders of PPPs, in avariety of sectors, including water, health and edu-cation. In transport these partnerships accountedfor 15% of the Bank’s lending in 2007, with the EIB

participating in the first German motorway PPPproject, the construction of the Eisenach bypasson the A4 in Thuringia. The Bank lent EUR 89m to-wards widening the existing motorway to six lanes,partly on a new alignment which will deliver ahigh-quality route offering improved service andenhanced safety for users. The project uses an in-novative financing scheme and is part of the firstgroup of four motorway projects that will ultimate-ly be financed from revenues generated by the tollroad system for heavy trucks introduced in 2005.

Over the years, the EIB has built up considerableexpertise in financing PPPs, which it shares withcustomers and Member States. Together with theEuropean Commission and Member States, theBank is working to set up a European PPP ExpertiseCentre (EPEC) to facilitate the effective sharing ofexperience and best practice in PPPs. The Bank de-

Trans-European networks2003-2007: 39 billion

(million)

2 000

4 000

6 000

8 000

10 000

020072003 2004 2005 2006

TransportEnergy


cided in 2007 to establish such a centre and also tofinance it in the first instance. EPEC will start its ac-tivities in 2008, once its terms of reference and or-ganisation have been finalised.

Cooperation with the Commission

The Bank expects that the Loan Guarantee Instru-ment for TEN-Transport Projects (LGTT), which wasfinalised in 2007 and launched early in 2008, willprovide effective support for financing future trans-European networks by providing guarantees forstand-by facilities to cover traffic revenue risks for upto five years after the start of operation. The LGTT isa tool designed to allow greater private sector par-ticipation in TEN projects that are exposed to vol-ume risk at the beginning of the operating period.The EIB is contributing EUR 500m from its StructuredFinance Facility to the guarantee scheme, while theCommission has allocated the same amount frombudgetary funds over the period 2007-2013.

The EIB and the Commission cooperated in anumber of joint working groups and steering com-mittees in 2007. Noteworthy are the efforts to steerStructural and Cohesion Fund resources to trans-European network projects, especially in the new

Member States. These efforts are backed up byJASPERS (see also section on “Balanced develop-ment throughout the Union”). In addition, the Bankis closely involved in the preparation of particularpriority projects at the request of the promotersand EU coordinators, as is the case for the BrennerBase Tunnel and the Galileo Navigation System. TheEIB is also working closely with the Commission onthe various EU initiatives for the rail, air, intelligentroad, river and Motorways of the Sea sectors.

A new transport lending policy for the EIB

The Bank is an important player in financing theEuropean transport sector. There are good reasonsfor this. Effective transportation systems are essen-tial to Europe’s prosperity and have a significantimpact on economic growth, social developmentand the environment. The transport sector is an im-portant industry in its own right and makes a ma-jor contribution to the functioning of the Europeaneconomy as a whole. Mobility of goods and per-sons is an essential component of the competitive-ness of European industry and services. The long-term perspective and truly European dimensionof major transport projects have made the Bank anatural financier.

A number of EU policies provide the basis for theBank’s transport lending: the development of thetrans-European transport networks (TENs), cohe-sion policy, sustainable transport developmentand support for research, development and inno-vation (RDI). In all cases the Bank’s lending policyfor this sector is multi-dimensional and integratesenvironmental concerns at all stages of the Bank’sdue diligence. Moreover, the Bank supports a rangeof transport projects where the explicit project aimis to achieve environmentally-friendly and sustain-able transport systems leading to a substantial re-duction in emissions of CO2 and other pollutants.Lending to such projects has steadily increasedover the last few years in both absolute and relative


terms. This includes lending for urban transportsystems as well as projects in the field of researchand development aimed at reducing exhaust gasemissions, enhancing fuel efficiency and improv-ing safety. In relation to the aggregate underlyinginvestments made in the road and rail sectors, theBank has demonstrated a clear preference for fund-ing projects in the railway sector.

While the range of traditional policy objectives forthe Bank’s lending in the transport sector remainsvalid, the new and complex policy context aris-ing from the need to combat global warming isevolving rapidly. This led to the formulation of newtransport priorities for the EIB in 2007.


EIB transport policy principles

Mobility is essential for the free movement of people and economic growth. In this con-text, the EIB will pursue an approach that strives for the most efficient, most econom-ic and most sustainable way of satisfying transport demand. This will require a mix oftransport solutions, covering all modes, though carefully planned to control the nega-tive environmental impacts of transport.

The EIB will continue its strong commitment to the funding of TENs. The long-term na-ture of these investments and their essential role in achieving an efficient and cohesiveCommunity-wide transport system continue to make them the backbone of transport in-vestment in the EU and essential for the functioning of the internal market. The relation-ship between the stock of infrastructure capital and greenhouse gas emissions is com-plex, but this does not in itself call into question this continued EU commitment to TENs.

Funding railways, inland waterways and maritime projects (in particular Motorways ofthe Sea) will continue to be a priority as these are intrinsically the most promising interms of reducing greenhouse gas emissions per transport unit. The same applies to ur-ban transport and intermodal hubs.

Road and airport projects must demonstrate high economic value to qualify for EIB sup-port. Lending will focus on improvements in safety, efficiency and reduced environmen-tal impacts.

In the rail, shipping, and urban transport sectors, financing the purchase of means oftransport is consistent with climate change goals. The financing of aircraft purchase willbe confined to exceptional circumstances where very strong value added can be dem-onstrated. The aircraft business is handled effectively by the private sector and EIB in-volvement will be limited. Examples could be connections to convergence regions if airtransport is essential to secure the territorial integrity of the EU and fuel efficiency is im-proved. Another example would be to fund specialised aircraft for fighting forest fires orother such non-standard uses.

Further emphasis will be given to RDI activities with vehicle manufacturers, whatever thesector involved. This should focus primarily on ensuring energy efficiency, emissions re-duction and safety enhancement. Support for automotive manufacturing should, how-ever, be selective and limited to projects in convergence regions, where their contribu-tion to employment and innovation diffusion, including through their links with thelocal mid-cap and SME network, is important. In all cases, the projects supported shouldbe fully in line with the orientations of EU environmental and energy efficiency policies,achieving higher environmental standards and accelerating the attainment of the goalof reducing CO2 emissions (as, for example, through the development of energy-efficientsmaller cars and renewably fuelled vehicles).


St. Petersburg

Istanbul

OdessaKishinev

Minsk

Moskva

Kiyev

Skopje

Zagreb

Sarajevo Beograd

Tiranë

Ljubljana

Sofia

Bucuresti

Budapest

Bratislava

Vilnius

Tallinn

Riga

Warszawa

Praha

Lisboa

Porto

Madrid

MünchenWien

Paris

Luxembourg

Bruxelles

Barcelona

Dublin

Belfast

Edinburgh

Athinai

ThessalonikiRoma

Milano

Lyon

Stockholm

BerlinAmsterdam

London

København

Oslo

Helsinki

Cork

Strasbourg

MADEIRA (PT)

AÇORES (PT)

ISLAS CANARIAS (ES)

Routes of priority Trans-European Networks (TENs)

Sections of TENs concerned by financingcommitments

Other TEN infrastructure and networksbenefiting the EU financed

Road and rail corridors in Centraland Eastern Europe

Sections of corridors financed

Road/Rail

Electricity

Gas

Airport

Multi-regional project

Intermodal hub

Port

Air traffic control

Development of oiland natural gas fields

Multi-lane electronictoll system

EIB operations in support of Trans-European Networks and corridors1993-2007


Support for small andmedium-sized enterprises

Small and medium-sized enterprises (SMEs) are a major source of employment, entrepre-neurial skills and innovation and also support economic and social cohesion in the Euro-pean Union. The EU’s SME policy is to promote successful entrepreneurship and improvethe business environment for SMEs, in order to allow them to meet the challenges faced intoday’s global, knowledge-based economy and realise their full potential.

Support for SMEs is a key operational priority forthe EIB Group. This transversal activity involvesboth EIB lending, through the EU banking sector(EIB lines of credit, by which the EIB provides fundsto financial intermediaries at attractive rates, whichare passed on in an appropriate manner to SMEs),and EIF support for SMEs, both by providing eq-uity (venture capital investments) and facilitatingaccess to finance (via securitisation and guaranteeschemes). The EIF’s capital was increased by 50%to EUR 3bn in 2007, strengthening the hand of theFund in pursuing its policy objectives whilst ensur-ing its financial self-sufficiency until 2013. The EIB,as the largest EIF shareholder, demonstrated itscommitment to supporting European SMEs by ex-ercising its share of the 2007 capital increase in full.

Results for 2007

The EIB Group’s SME activity provided support foran estimated 162 000 SMEs in 2007, with a spe-cific focus on innovative SMEs with high growthpotential, small renewable energy schemes pro-moted by SMEs, and micro-enterprises. This sup-port took the form of lines of credit totalling someEUR5bn, granted to the EIB’s intermediaries throug-hout the European Union. The EIF’s role as a majorplayer in the European venture capital markets wasconfirmed, with its operations in that sector to-talling over EUR 520m in 2007. Guarantee opera-tions amounted to EUR 1.4bn. This activity is ex-pected to increase significantly in 2008 followingthe adoption of the EU’s new Competitiveness andInnovation Framework Programme (CIP) mandate

towards the end of 2007 (see also section on “Sup-port for Innovation”). EIF credit enhancement ac-tivity reached record levels in 2007 in terms of bothvolumes and number of deals. Under this activity,the EIF guarantees the junior tranches of ABS trans-actions, making them more attractive to investorsand thus easier to sell for the originating banks.This in turn encourages the banks to develop theirSME lending activity.

Product diversification

Besides continuing the traditional SME creditline activity with its more than 100 partner banksthroughout Europe, which was especially appreci-ated by the financial sector amid the market tur-moil of the second half of the year, the Bank hascontinued to work towards diversifying its productoffering for SMEs to meet market needs.

In2007, theBankextended itsnetworkof intermedi-ary banks by adding Hypo Tirol Bank AG in Austria,SEB Vilniaus Bankas in Lithuania, EFL and Millenni-um Leasing in Poland, and Isbank, Finansbank andDenizBank in Turkey.

In order to reach smaller, regional banks, a numberof securitisations were concluded, for instance inSpain with Rural Coop Bank, Bankinter and BancoPopular, and in Italy with Selmabipiemme. For thefirst time, a transaction of this type was also signedin a newMember State, a EUR 200m operation withMillennium Leasing in Poland. This operation willimprove access to long-term financing for Polish


SMEs as well as micro-enterprises with fewer thanten employees.

Underpinning its strategy of taking more risk toprovide more value added, the EIB also engagedin a number of risk-sharing transactions where itassumed part of the risk associated with the SMEsthemselves and thus encouraged the banks to de-velop their SME lending activity. Operations of thistype approved in 2007 included the RZB GroupRisk Sharing Facility, a EUR 100m EIB Mid-Cap Loanin Austria, Hungary and Romania that will financeprojects of limited scale carried out by mid-cap en-terprises. Another example is Avenir EntreprisesMezzanine, a closed-end fund in France which willfinance SMEs with convertible bonds. The Bank sub-scribed to the fund for up to EUR 20m, alongsideOSEO and CDC Entreprises. With KfW IPEX-Bank, theEIB set up a EUR 100m credit risk-sharing scheme forsmall and mid-sized low and sub-investment gradetransactions with companies investing in RDI inGermany.

The EIB also focused on lending to very small en-terprises and to SME investments in renewable en-ergy or energy efficiency. In the Czech Republic a

risk-sharing credit line will finance small and me-dium-scale projects in the field of rational use ofenergy, energy efficiency and renewable energyas well as research, development and innovationin energy. Rentenbank in Germany also received acredit line to finance long-term investments in re-newable energy, notably in biogas, biofuel, windpower and photovoltaic energy.

Consultation to increase value added for SMEs

The EIB carried out an extensive review of its prod-uct offering for small and medium-sized enterprisesin 2007, in cooperation with SME representatives,the European Commission, specialised institutionsand banking partners. Improvements will resultfrom better targeting of specific market segmentsand from further developing risk-sharing operationswith financial intermediaries, the final aim of coursebeing to increase the value added provided by theBank for SMEs. The findings of the consultation pro-cess will be used in the course of 2008 to formulate anew strategy for the EIB Group’s products for SMEs.

The timing of the review fits in with the thinkingof the European Commission, which launched the“European Initiative for the Development of Micro-credit in Support of Growth and Employment” inNovember 2007 and is currently working on a “SmallBusiness Act for Europe”. This is to be adopted by theCommission in June 2008 and will include a chapteron how to improve SMEs’ access to finance.

A European Commission mandate for the EIF

In 2007, the European Commission gave the Euro-pean Investment Fund a mandate to manage aEUR 1.1bn facility under the Competitiveness andInnovation Framework Programme (CIP). The CIPwill be split between venture capital and guaran-tees and cover the period 2007- 2013.


The CIP aims to encourage the competitiveness ofEuropean enterprises, support innovation and pro-vide better access to finance for SMEs. Its objec-tives will be comparable to those of its predeces-sor, the Multi-annual Programme for Enterprise andEntrepreneurship 2001-2006 (MAP), i.e. to generateeconomic growth and create more jobs as well asboost productivity, competitiveness and innova-tion in the EU. The CIP, however, has been designedas a more ambitious programme than the MAP. Itshould cover a larger geographical area and willextend the range of instruments to include newmarket segments and products.

A Commission-EIF initiative: JEREMIE

JEREMIE, the Joint European Resources for Micro-to-Medium Enterprises initiative, is designed togive EU Member States the option of using a por-tion of their Structural Funds allocations in the

budgetary period 2007-2013 to establish a revolv-ing fund, managed by an intermediary, to improveaccess to finance for small enterprises, includingstart-ups, and provide microcredit in regional de-velopment areas through a tailored package of fi-nancial products.

During 2006 and 2007, the special JEREMIE taskforce created within the EIF conducted some 40gap analyses at the request of 20 Member States.Memoranda of Understanding have already beensigned with Bulgaria, Romania and the Slovak Re-public; the first JEREMIE funding agreement wasconcluded with Greece in June 2007.

JEREMIE represents an innovative departure forSME financing, involving both significant leverageof Structural Funds and the establishment of a re-volving facility through a holding fund. JEREMIEcreates new opportunities and marks a departurefrom the formerly exclusively grant-based financ-ing approach of the Structural Funds.


Sustainable, competitive and secure energy

The promotion of sustainable, competitive and secure sources of energy is a key policy ob-jective of the European Union. The increased focus on the challenges of climate change hasmoved energy to the top of the EU agenda. For this reason, the European Investment Bank’sBoard of Governors decided in 2007 to reinforce the EIB’s contribution to clean energy forEurope and to establish a special lending window for energy investment outside the EU.

The Action Plan adopted by the Brussels Europe-an Council in March 2007 defines EU energy poli-cy. It also sets ambitious targets: 20% reductionof greenhouse gas emissions by 2020 comparedto 1990; 20% share of renewable energies in theoverall EU energy mix; 10% share of biofuels in pet-rol and diesel for transport; and 20% reduction inenergy consumption compared to the baselineprojections for 2020. Early in 2008, the EuropeanCommission agreed on a far-reaching package of“Climate Action” proposals that will underpin theEuropean Council’s commitments to fight climatechange and promote renewable energy.

The EIB is carefully monitoring energy policy devel-opments. Against this background, the Bank’s en-ergy and climate change lending focuses on fivepriority areas: renewable energy; energy efficiency;RDI in energy; security and diversification of inter-nal supply (including trans-European energy net-works); and external energy security and economicdevelopment in Neighbour and Partner Countries.

As energy is a pressing area for investment, theBank has acted accordingly. For 2007 the objectivewas to lend a total of EUR 4bn for energy projectsin and outside the European Union, of whichEUR 900m for renewable energy. In fact, the Banklent EUR 5.4bn in the EU (plus Iceland), EUR 1.5bnof which for renewables, and another EUR 1.4bnoutside the Union, 518m of which was for renew-able energy. EUR 500m was lent under a specialEUR 3bn facility, created for financing energy invest-ment outside the current development mandatesin Neighbourhood Countries, the ACP countries,South Africa, Asia and Latin America up to 2013.

Renewable energy and energy efficiency

These are record lending figures for renewables.By way of comparison, in recent years the averageannual lending for renewable energy was someEUR 450m. The EIB has financed mature technol-ogies that are already used commercially, such asonshore wind farms, hydropower, geothermal andsolid biomass. It has also financed emerging tech-nologies that are in an early implementation phase,such as photovoltaics, solar thermal and second-generation biofuel production technologies. In-vestment in emerging renewable energy technol-


ogy has a dual purpose: to produce electricity andto help reduce the cost of the technology, notablythrough learning-by-doing.

Energy efficiency accounted for EUR 945m in loansin the EU. Combined heat and power generation, aswell as district heating networks, are a Bank prior-ity. In Italy, the EIB lent EUR 200m to Eni for the con-struction of a combined-cycle power plant outsidethe city of Ferrara, facilitating the decommissioningof obsolete, inefficient and more polluting oil-firedpower plants. In Germany, the EIB financed a ther-mal waste incineration plant in Suhl, in Thuringia.

Energy RDI

Investment in energy research, development andinnovation projects contributes significantly tomeeting the long-term objectives of the EU’s en-ergy policy, including those related to climatechange, and also plays a role in the implementa-tion of the Lisbon Agenda to create a competitiveknowledge-based European economy. The EIBis already focusing heavily on renewable energyand energy efficiency in its lending for RDI. Afterthe launch of the Risk Sharing Finance Facility inmid-2007 (see also section on “Support for innova-tion”), many of the first loans were for energy RDI:the development of solar power technology at the

Andasol thermal solar power plant north of the Si-erra Nevada in Spain; also in Spain, a different solarpower technology at the Solucar solar power plantnear Seville and investment in innovative energytechnologies by the Abengoa Group; in Austria,the development by AVL of clean and efficient au-tomotive powertrains, as well as research on hydro-gen and fuel cell technology, nanocomposites andengine technologies to increase energy efficiency.

The EIB is also working with industry and the Euro-pean Commission on the financial support thatwill be necessary for the carbon capture and stor-age demonstration plants planned by the Commis-sion and carbon emitters in Europe, particularly inthe energy industry. In addition, the Bank is closelymonitoring the EuropeanTechnology Platforms, es-pecially those devoted to hydrogen and fuel cells,photovoltaics, wind, zero-emission fossil-fuelledpower plants and thermal solar energy.

The EIF signed its first clean-tech deal in 2006 andhas begun to play an important role in this marketsegment as viable clean tech-dedicated venturefunds come to the market. Given the heightenedemphasis on clean tech, the EIF expects to allocate asignificant part of the CIP mandate to this segment(see also the section on “Supporting innovation”).

Energy TENs and security of supply

In 2007, loans for trans-European energy networkstotalled EUR 1.4bn. The EIB is involved in most pan-European priority gas projects and aims to increaseits involvement in electricity investment in the fu-ture. In Belgium, EIB-financed investment in theFluxys LNG terminal in Zeebrugge will help to in-crease, secure and diversify gas supplies to the EU,as imported gas can easily be moved to the UK, theNetherlands, Germany, Luxembourg and France. Aloan to Eni in Italy will finance the expansion of theTransmed pipeline, improving the supply of Alge-rian gas, across Tunisia, to Italy and the EU.


Annual EIB Forum focused on energy in 2007

The 2007 EIB Forum held in Ljubljana, Slovenia, on 27 and28 September was dedicated to one of Europe’s most press-ing topics: Investing in Energy – Mastering Climate Change.Leading government officials, academics and industry rep-resentatives provided food for thought on how best totranslate European objectives into concrete solutions.

As many of the speakers at the Forum agreed, innova-tive technologies and the effective use of capital can of-fer Europe a unique competitive advantage in the drive topromote energy efficiency and increase the use of renew-able energies. The Forum turned its attention a number oftimes to the Lisbon Agenda, the EU’s Action Plan to estab-lish a competitive, innovative and knowledge-based Euro-pean economy, capable of sustainable economic growthand greater social cohesion by 2010. Many of the speakersat the Forum stated that only by providing the right politicalenvironment and market conditions can Europe rise to theRDI challenge that is fundamental to innovation in the ener-gy sector. As EIB President Philippe Maystadt put it, “Europehas the scientific and technical knowledge to develop prac-tical solutions. It also has the financial resources to be ableto bear the costs of implementing new technologies andregulatory systems. What’s more, playing such a pioneeringrole is likely, ultimately, to have an economic pay-off.”

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A EUR 200m EIB loan for Urenco Ltd will help to di-versify secure energy sources. Urenco is expand-ing two uranium enrichment plants based in theUK and the Netherlands. The project comprisesthe installation of new centrifuge cascades in bothplants. A full Environmental Impact Assessment hasbeen carried out and Urenco adheres to all safe-

guards set by Euratom, the International AtomicEnergy Agency and other public agencies control-ling the highly regulated nuclear fuel cycle.

Energy outside the EU

With the aim of improving external security ofsupply and stimulating economic development,in 2007 the EIB financed energy investment inCroatia, the Balkans, Mediterranean partner coun-tries, Uganda, South Africa, and China. In China, theBank provided a EUR 500m framework loan to sup-port investment projects in the energy and indus-trial sectors that will help to reduce greenhousegases and other polluting emissions. It was the firstloan to be provided by the EIB under the EUR 3bnEnergy Sustainability and Security of Supply Facil-ity, authorised in June 2007 by the Governors ofthe Bank to enhance EU action addressing climatechange and security of energy supplies.


Candidate and potential Candidate Countries

The EIB is fully involved in lending operations in the Accession Countries Turkey and Croatiaand the Candidate Country Former Yugoslav Republic of Macedonia, as well as in the re-maining Western Balkan States, the potential Candidate Countries. The Bank’s activitiesare geared to supporting the economic development process and thus also preparing thecountries’ potential transition to EU membership. Lending takes place under the Pre-Acces-sion Facility and the Pre-Accession Mandate, both renewed in 2007, and in close coopera-tion with the European Commission and the international financing institutions operatingin these countries.

Croatia

The EIB’s financing of projects in Croatia is focusedon supporting investment that will help the coun-try to meet the EU accession criteria. In 2007, theEIB signed finance contracts worth EUR 330m andlending in Croatia since 2001 now totals EUR 1.3billion. Lending activity in 2007 was well diversi-fied, supporting upgrading of the country’s energyand transport infrastructure as well as indirect fi-nancing of smaller projects pursued by SMEs andmunicipalities through credit lines. The Bank pro-vided EUR 190m for the second phase of the im-provement and expansion of the natural gas trans-mission system, involving some 930 km of newhigh-pressure gas pipelines. A EUR 100m loan wentto the construction of the infrastructure of thenew ferry port of Zadar, creating new opportuni-ties for the historic city and improving its links withCroatia’s islands and beyond to other countries inthe Mediterranean.

Over the coming years the Bank plans to expand itslending to municipalities and local authorities toimprove environmental and health and educationinfrastructure.

Turkey

The EIB plays an important role in Turkey’s EU acces-sion process, lending EUR 2.1bn in 2007, compared

to EUR 1.8bn in 2006. As an Accession Country, Tur-key will receive grant finance through a new Instru-ment for Pre-Accession Assistance for the period2007-2013. The EIB complements these grant fundswith loans made available under the External Lend-ing Mandate and through its own Pre-AccessionFacility, under which the Bank provides loans andguarantees at its own risk. The EIB cooperates close-ly with the European Commission and public Turkishbodies in defining priority investments in line withthe national development plans and EU priorities.

In 2007, the EIB supported investment in both thepublic and the private sector in Turkey. In the privatesector, it financed the modernisation of Ford Otosan’sfactories inKocaeli and Inönü, and modernisationandcapacity improvements at the Sisecam glass manu-facturing plant in the province of Bursa. The Bankalso stepped up its lending to small and medium-sized enterprises, which reached EUR 900m.

Efficient infrastructure is a prerequisite for fur-ther growth and the development of the country.With that in mind, a large share of the 2007 lend-ing went to municipal transport infrastructure inAntalya and Izmir, the Istanbul-Ankara high-speedrailway and the Turkish Airline fleet renewal. Thefleet renewal project, which was already approvedat the end of 2005, fosters economic developmentand regional cooperation between Turkey and oth-er countries, including the EU.

The Bank also invested in RDI. Turkey’s progress inthis area will be important for its competitive po-


sition within the European Union. A EUR 400m EIBloan went to Tübitak, the Scientific and Technologi-cal Research Council of Turkey, for a range of invest-ments including academic research programmes,laboratories and scientific equipment.

Turkey is by far the largest recipient country of EIBfinancing outside the European Union, with a totallending volume of EUR 6.2bn for the 2003-2007 pe-riod. The upcoming opening of local offices in An-kara and Istanbul testify to the importance the EIBattaches to its activities in this country.

Western Balkans

The countries of the Western Balkans are consid-ered potential Candidate Countries. EIB lending inAlbania, Bosnia and Herzegovina, FYR of Macedo-nia, Montenegro and Serbia will help their eventualintegration into the European Union. More general-ly, European Union and EIB support helps to fosterpolitical and economic reform and encourages so-cial reconciliation in the region. In 2007, EIB lending

in the region reached a record EUR 440m, bringingthe total lending since 1995 to some EUR 2.5bn.

More than two thirds of the lending supported thedevelopment of transport and energy infrastruc-ture. In Bosnia-Herzegovina, EUR 103m went to therehabilitation of hydropower plants and electricpower distribution systems. The investment will re-sult in better energy efficiency and increased qual-ity and reliability of power supplies in the coun-try. A loan of EUR 60m went to the constructionof a motorway bypass for the Serbian capital Bel-grade. The project will help to increase transportsafety and capacity in Serbia, which is on the cross-roads of the crucial trans-European corridors in theWestern Balkans. Another loan in Serbia went tothe rehabilitation of Belgrade’s Gazela Bridge. Theproject was co-financed with the European Bankfor Reconstruction and Development and the Euro-pean Agency for Reconstruction. Other transportprojects included a road rehabilitation programmein Bosnia-Herzegovina and the construction of anexpressway between Levan and Vlorë in Albania.

The Bank lent EUR 120m to small and medium-sized enterprises in the region via credit lines tolocal intermediaries. One of these SME credit lineswas made available in Kosovo and was the firstloan in this part of theWestern Balkans. In addition,the EIB invested EUR 25m in the European Fund forSoutheast Europe (EFSE), which will on-lend thefunds via intermediary financial institutions to mi-cro and small enterprises. Themajority of the EFSE’sinvestments will be in theWestern Balkan countriesand the rest in Bulgaria, Romania andMoldova, andpossibly other countries of south-eastern Europe.


European Neighbour and Partner Countries

2007 was the first year in which the Bank’s lending in the Neighbourhood and PartnershipCountries took place under the new mandate given by the Council, which made EUR 12.4bnin loans available over the period 2007-2013. This is the Bank’s biggest mandate ever out-side the Union, effectively doubling EIB activity in the nine Mediterranean partner countriesand increasing lending in Russia and the Eastern Neighbour Countries sixfold.

FEMIP: a record year for support for the privatesector

Of the finance totalling EUR 1.4bn provided in thenine partner countries in North Africa and the Mid-dle East under the Facility for Euro-MediterraneanInvestment and Partnership (FEMIP), a record 68%went to the private sector in 2007, in line with thepriorities of the European Neighbourhood Policy.

In 2003 the European Union formulated a policyinvolving preferential relations with the countrieson its borders to the south and east, the Euro-pean Neighbourhood Policy. The EIB’s activities inthe Mediterranean have, since 2002, come underFEMIP. In line with the Barcelona Process – a wideframework of relations between EU Member Statesand Mediterranean partner countries – and theEuropean Neighbourhood Policy, FEMIP’s remitis to promote the economic development of nineMediterranean countries by investing in two mainareas: support for the private sector, the drivingforce behind sustainable growth, and the creationof an investment-friendly environment by meansof efficient infrastructure and appropriate banking

systems. FEMIP has established itself as the main fi-nancial partner in the Mediterranean region, withmore than EUR 7bn invested since 2002. It also en-courages dialogue between the partner countriesand with the EU at the institutional level, and alsowith the representatives of the private sector andcivil society.

While the total volume of operations carried out in2007 (EUR 1.4bn) was slightly higher than in 2006,the type of project supported was very different,with 68% being private sector projects, comparedwith 30% in 2006. This proportion of support forthe private sector had never been achieved beforeby FEMIP and reflects a strategic choice in line withthe recommendations of the European Council.

More than 44% of the total volume of operationsinvolved support for small and medium-sized en-

Mediterranean countriesLoans provided in 2007

(million)

Resources

Total own budgetary

Tunisia 389 385 4

Morocco 336 330 6

Lebanon 300 295 5

Egypt 130 130 –

Israel 120 120 –

Syria 80 80 –

Jordan 50 50 –

Regional 31 – 31

Algeria 3 – 3

Mediterranean countries 1 438 1 390 48


terprises via local banks, in Jordan, Lebanon, Syriaand Tunisia. Also promoting the private sector, 3%of the total amount consisted of equity stakes incompanies, as in Algeria, or in investment funds, inLebanon, Morocco and Tunisia.

FEMIP also continued to support major infrastruc-tureprojects inthepartnercountries,withEUR465m(32% of the total) being provided for energy in-frastructure, with the construction of two naturalgas-fired power stations in Egypt, the optimisationof hydroelectricity generating capacity in Morocco,and the expansion of the Transmed gas pipeline,connecting Algeria to Italy via Tunisia. The last ofthese projects is one of the priority energy TENs.Transport infrastructure accounted for 13% of thetotal, with the construction of a section of motor-way linking Fez and Oujda in Morocco, complet-ing the country’s motorway network. FEMIP alsobacked the construction of a desalination plant in

Israel, bringing its support for water infrastructureand sanitation to 8% of the lending volume.

With regard to the geographical breakdown, 51%of the total volume was allocated to the Maghrebregion (8 projects, totalling EUR 728m), 47% to theNear East (7 projects, amounting to EUR 680m),while three projects had a regional dimension. Forinstance, the Altermed investment fund, in whichFEMIP invested EUR 11m in December 2007, is ded-icated to SMEs in both Tunisia and Morocco.

In addition to loans and private equity, FEMIP hascontinued to provide technical assistance to supportpromoters during all stages of the project cycle. Theseoperations are financed by the FEMIP Support Fund,which uses non-repayable aid granted by the Euro-pean Commission. In 2007, 24 contracts were signedfor technical assistance operations in the Mediterra-nean partner countries totalling EUR 17.5m.

Increasingly sophisticated financial structures

In qualitative terms, 2007 was also a year of firsts.For the first time, FEMIP was involved in preparingand financing two public-private partnerships, inIsrael with the desalination plant in Hadera, near TelAviv, and the Tanger-Med port in Morocco, a loanexpected to be signed in 2008. Here, it was able topass on to its two Mediterranean partners the ex-pertise developed by the EIB in this field within theEuropean Union.

FEMIP also initiated and promoted the first private-ly managed start-up fund in Tunisia. The “PheniciaSeed Fund” is focused on innovative Tunisian com-panies that are in the process of being set up orhave been established for less than five years. Thisoperation is financed under the FEMIP Trust Fund(FTF). Established in 2004 with resources made avail-able by 15 Member States and the European Com-mission, the purpose of the Trust Fund is to directresources to operations in certain priority sectors inorder to foster private sector development in the re-gion. In 2007, the FTF Assembly of Donors approved

Working with Mediterraneanuniversities

In 2007, the European InvestmentBank and UNIMED, the MediterraneanUniversities Union, signed a “Memo-randum of Understanding”. UNIMED isan association of 74 universities fromthe countries bordering the Mediter-ranean and aims to promote researchin the areas of conservation and en-hancement of the cultural heritage,the environment, health, the econo-my and new communication tech-nologies, in order to contribute to thepolitical and economic dimensions ofrelations between the European Un-ion and its Mediterranean partnercountries.


five new operations for a total volume of EUR 0.75m.This brought the total number of approved opera-tions to 18 for a total volume of EUR 6.9m.

Strategicmeetings and studies

A number of meetings were held in 2007 to con-tinue the dialogue initiated under FEMIP betweenthe people of Europe and the Mediterraneanregion. First, at the institutional level the FEMIPMinisterial Council met in Cyprus on 14 May, whilethe FEMIP Committee, which is made up of repre-sentatives of the European andMediterranean coun-tries and is responsible for reviewing FEMIP’s strate-gy, met on 6 February, 3 April and 20 November.

In addition, two studies financed by the FEMIPTrust Fund were published on the Bank’s website.The first one, entitled “Study on improving the ef-ficiency of workers’ remittances in Mediterraneancountries”, was presented at a FEMIP Conferenceheld in Paris in March 2007, which brought togeth-er associations and representatives of civil societyand the private sector from both sides of the Med-iterranean. The second, published in June 2007, isa study on private savings in Morocco, which rec-ommends concrete measures for mobilising thosesavings more effectively.

Russia and the Eastern Neighbours

EIB financing operations in Eastern Europe, theSouthern Caucasus and Russia are carried out inclose cooperation with the European Bank for Re-construction and Development (EBRD) accordingto the terms set out in a tripartite Memorandum ofUnderstanding between the European Commission,the EIB and the EBRD, which aims to bring togeth-er the expertise, capacity and comparative advan-tages of each participant for the successful imple-mentation of the European Neighbourhood Policyand the EU-Russia Strategic Partnership. The objec-tive is to strengthen prosperity, stability and security.

Under the new 2007-2013 mandate, EUR 3.7bn inEIB loans is available to finance investment in Rus-sia, Ukraine and – subject to future Council agree-ment – Belarus in Eastern Europe, and in Armenia,Azerbaijan and Georgia in the Southern Caucasus.The EIB will provide long-term loans for projectsthat are of significant EU interest in the transport,energy, telecommunications and environmen-tal infrastructure sectors. Priority will be given toprojects on extended major trans-European net-work routes, projects with cross-border implica-tions for one or more Member States and majorprojects favouring regional integration through in-creased connectivity. In the environmental sector,the EIB attaches priority in Russia, in particular, toprojects that come under the Northern DimensionEnvironmental Partnership, a cooperative effortinvolving the European Commission, the RussianFederation, the EBRD, the Nordic Investment Bankand the EIB, as well as a number of donor coun-tries, to tackle the most pressing environmentalproblems in north-west Russia. In the energy sec-tor, strategic energy supplies and energy transportprojects are of particular importance.

The first EIB loan for an environmental project inRussia, in St Petersburg, dates back to 2003. Twofurther environmental protection loans were signedin the following years, for projects also located inSt Petersburg, for a total of EUR 85m. In 2007 nonew loans were signed in Russia, but preparatorywork was carried out on a number of PPP projects,in particular the St Petersburg Western High Speed


Diameter. The aim of this project is to build a tollmotorway across the western part of the city ofSt Petersburg, linking the northern and southernparts of the ring road and providing a direct con-nection to the city’s Grand Port and with Finland.

The Bank became operational in Ukraine in 2006and in 2007 signed its first loan in that country insupport of motorway rehabilitation on the Pan-European Corridor between Kiev and Brody. 2007

also saw the EIB become operational in Moldova,where it signed its first financing operation, whichwas aimed at improving road connections with theEuropean Union. The EIB lent EUR 30m for rehabili-tation of roads linking the capital Chisinau to theEU border. This project, piloted by the World Bank(WB) is co-financed by the WB, the EIB and theEBRD. The WB and EBRD are also providing loansto rehabilitate the main North-South road axis inthe country. The loans are closely coordinated withthe International Monetary Fund and the EuropeanCommission.

The new mandate for 2007-2013 expands the EIB’sactivities in the EU’s Eastern Neighbour countriesto include the Southern Caucasus. In order forthe EIB to become active in these new countries,Framework Agreements must be concluded be-tween the Bank and the country concerned. In theSouthern Caucasus, such a Framework Agreementwas signed with Georgia in June 2007 and with Ar-menia early in 2008, while negotiations with Az-erbaijan are still ongoing, with a view to signing anagreement in 2008.


ACP, Asian and Latin American partner countries

The European Investment Bank is instrumental in implementing the EU’s development andeconomic cooperation policy in countries outside the Union. It has been an active develop-ment partner in many African, Caribbean and Pacific (ACP) countries since 1963 and in theOverseas Countries and Territories (OCTs) since the 1970s. The Bank’s operations in these re-gions contribute to sustainable social and economic development and poverty alleviation.In Asia and Latin America (ALA), EIB activity dates back to 1993. Here the focus has been oneconomic cooperation and projects of mutual interest to the recipient country and the EU.More recently, environmental protection and energy security have come to the fore.

Development finance for the ACP countriesand the OCTs

2007 marked a significant year in EU-ACP relations,with the Portuguese Presidency prioritising the de-velopment needs of Africa. The EU-Africa Summit inDecember 2007 was the second of its kind, the first(Cairo, 2000) having also been organised by Portu-gal. Bringing together Heads of State and Govern-ment, the Summit laid out the strategic partner-ship between the two continents.

In 2007, EIB lending from own resources reacheda record EUR 432m, while signatures under theInvestment Facility (IF) totalled EUR 325m. The In-vestment Facility is a EUR 2bn risk-bearing revolv-ing instrument, established to support investmentin private enterprises and commercially-run pub-lic sector entities, including revenue-generatinginfrastructure, over the period 2003-2007. The IFhas established a strong track record of activity,with a total of approved operations that stood atEUR 1.99bn at the end of 2007, or 98% of the avail-able amount. A separate budget of EUR 20m coversthe Overseas Countries and Territories. Under thesecond Financial Protocol of the revised EU-ACPCotonou Agreement for the period 2008-2013, theInvestment Facility will receive additional fundingof EUR 1.1bn, plus EUR 400m for interest subsidiesand technical assistance.

EIB lending under the IF has given priority to theprivate sector, which accounted for 79% of the cu-

mulative signed portfolio at the end of 2007. 52%of the current IF portfolio targets financial ser-vices, notably through the development of theBank’s microfinance activities, in particular in sub-Saharan Africa. 17% of the IF portfolio relates to in-dustrial investments (including mining operations)and a further 28% to basic infrastructure, coveringenergy, water, transport and telecommunicationsinvestments, the remaining 3% being dedicated toagriculture and tourism.

African, Caribbean, Pacific States and South AfricaLoans provided in 2007

(million)

Resources

Total own budgetary

Africa 686 432 254

Southern and Indian Ocean 328 304 25

East 149 – 149

West 128 128 –

Central and Equatorial 73 – 73

Multiregional 8 – 8

Caribbean 56 – 56

Pacific 2 – 2

OCTs 10 – 10

Multiregional 3 3

ACP-OCTs 756 432 325

South Africa 113 113 –


EU-Africa Infrastructure Trust Fund

April 2007 saw the successful launch of the EU-Af-rica Infrastructure Trust Fund, which is managedby the EIB. This innovative fund supports the de-velopment of cross-border or regional infrastruc-ture projects in sub-Saharan Africa and brings to-gether the technical and funding expertise of theBank and other EU development financiers withthe grant resources of the European Commissionand EU Member States.

With the UK joining in December 2007, the TrustFund now has 11 donors – the Commission and tenEU Member States. Donors’ commitments to theFund currently stand at EUR 98m and are expectedto increase further in 2008. In 2007, EUR 16.2m wasapproved for grant allocation to four infrastructureprojects.

EIB regional offices

The EIB inaugurated regional representations inFort-de-France in May 2007 and Sydney in Novem-ber 2007, serving the Caribbean and Pacific regionsrespectively. As well as developing EIB operation-al activities in the regions, the offices will facilitatecommunication and coordination links not onlywith potential project promoters, but also withother donors based in the regions, in particular theEuropean Commission delegations.

The opening of the offices for the Caribbean andPacific brings the number of EIB regional ACP of-fices to five – in 2005 offices were opened in Nairo-bi serving East and Central Africa, in Dakar for WestAfrica and in Tshwane (Pretoria) to cover SouthernAfrica and the Indian Ocean region. As a result, allACP areas are currently served by local representa-tions, enabling the Bank to strengthen and deepenthe strategic role it plays in contributing to sustain-able economic growth across the entire range ofACP and OCT countries.

In the coming years, the Bank’s emphasis will beon infrastructure and the financial sector. In infra-structure, the focus will be on basic investments inenergy, sanitation and water projects, for instance,with priority being given to projects initiated bythe private sector and regional initiatives (projectsinvolving or having an impact on more than onecountry). In the financial sector, the emphasis willbe on equity activities. The Bank will also channelfunds through local financial institutions, support-ing the development of local financial markets andproviding funding for smaller enterprises, includ-ing micro-enterprises.

EIB lending in South Africa

EIB lending in South Africa is provided under a sep-arate mandate. For 2007-2013 EUR 900m is avail-able, compared to EUR 825m for 2000-2006. Un-der the new mandate, and in cooperation with theSouth African authorities, public agencies, privateenterprise and the financial sector, the Bank will fo-cus on investment in infrastructure projects of pub-lic interest (includingmunicipal infrastructure, pow-er and water supply) and support for the privatesector, including SMEs. In October 2007, the EIBsigned a Declaration of Intent with the Governmentof the Republic of South Africa assuring continuedEIB financing support during the period 2007-2013.Lending in South Africa totalled EUR 113m in 2007.


Microfinance, a major impact in ACP countries

The relevance of microfinance – that is the supply of loans, savings, and other basic finan-cial services to the poor – to alleviating poverty is nowadays widely recognised. Over theyears, the Bank has developed knowledge and expertise in the field of microfinance in theAfrican, Caribbean and Pacific regions.

The Bank’s microfinance strategy focuses on the areas where it can add the most value: theprovision of equity to existing or newly created institutions and of local currency, in particu-lar through guarantees. By the end of 2007, the Bank had committed a total of EUR 75min equity and debt for microfinance in the ACPs. Microfinance investment funds provedespecially effective not only in providing funding to existing microfinance institutions(MFIs) in countries such as Kenya, Uganda, Ghana and Mozambique, but also in starting upor strengthening greenfield MFIs in Cameroon, the Democratic Republic of Congo, Mada-gascar, Nigeria and Chad.

Through its operations, the Bank is seeking a triple return on investment: financial, socialand a demonstration effect. Financial return is essential to ensure the sustainability of theMFIs concerned and their attractiveness to other investors. Social return needs to be meas-ured in terms of income growth at the level of those benefiting from microcredits. Thedemonstration effect is required to encourage future mobilisation of larger funding sourcesboth in the North and the South.

Despite encouraging developments, a majority of poor people still have no access to ba-sic financial services. Much remains to be done and the EIB endeavours to contribute ina proactive manner by remaining at the forefront of the industry and taking pioneeringrisk on high-impact projects. However, the Bank’s involvement in microfinance extends be-yond strictly project-related activities and encompasses a continuous dialogue with the EUMember States, the European Commission and other important stakeholders.

In 2007, the Bank concluded three new microfinance investments in the ACP for a total ofEUR 11m and established a new framework to provide technical assistance funding to sup-port the development of the microfinance industry.


Economic cooperation with ALA

In 2007, the EIB started lending under a new man-date in Asia and Latin America covering 2007-2013.Over this period the EIB can lend up to EUR 3.8bnin ALA partner countries. This represents a sub-stantial increase of 53% compared to the previousmandate for the period 2000-2006. The new man-date has been subdivided into indicative ceilings ofEUR 2.8bn for Latin America and EUR 1.0bn for Asia.

The Bank’s activities in ALA complement the EU’scooperation strategy with the countries concerned.In sector terms, the lending objectives for Asia andLatin America have been broadened. EIB lendingwill target environmental protection, includingclimate change mitigation, and projects that con-tribute to the energy security of the EU, and willcontinue to support an EU presence through for-eign direct investment, transfer of technology andknow-how.

In 2007, EIB lending for projects located in Asiaand Latin America totalled EUR 925m, of whichEUR 365m for projects in Brazil, Panama, Peru andUruguay, EUR 60m for a project in the Philippinesand EUR 500m in China for a large-scale multi-in-vestment scheme designed to support investmentprojects in the energy and industrial sectors thatwill help to prevent or reduce greenhouse gasesand other polluting emissions. This was the firstloan to be provided by the EIB under the EUR 3bnEnergy Sustainability and Security of Supply Fa-cility authorised in June 2007 by the Governors ofthe Bank to enhance EU action addressing climatechange and security of energy supplies (see alsothe section on “Sustainable, competitive and secureenergy”, p33.).


EIB borrowing activityA leading sovereign-class international debt issuer

Resilient funding in turbulent times

The EIB’s funding activities were resilient duringthe turmoil that overshadowed capital markets inthe course of 2007, thereby sustaining a contin-ued competitive offering of loan products. In 2007,the Bank raised a total of EUR 55bn 1 via 236 trans-actions in 23 currencies, including four currenciesin synthetic format. In September, in parallel with

progress in its lending programme and loan dis-bursements, the Bank increased its funding ceilingfrom EUR 50bn to EUR 55bn. The funding volumeof EUR 55bn was significantly larger than in the2006 funding programme (EUR 48bn).

Such results were underpinned by the Bank’s top-quality credit standing and a strategic and respon-sive approach to markets. The continuing supportfrom EU sovereign shareholders remains a corner-stone of the Bank’s credit standing.

A reliable benchmark

In this challenging environment the Bank benefitedfrom the strength of its benchmark programmes inits core currencies (EUR, GBP and USD), which gen-erated funding for EUR 38bn (69% of the total).This represents a significant increase versus 2006(EUR 28bn or 59%). Targeted issues in the threecore currencies in plain vanilla and structured for-mat were also substantial, amounting to EUR 8bn.

EUR: high volume and innovation

In EUR a total of 27 transactions were conducted in2007, raising EUR 20.5bn in all, or 37.5% of the totalfunding programme for the year. Four new euro-de-nominated benchmarks or Euro Area Reference Notes(‘EARN’TM) were issued, compared with the two typi-cally issued in recent years. This provided the largestsource of benchmark funding for the Bank (EUR 16bn).

The Bank remained the only borrower to comple-ment sovereigns with benchmark issues of EUR5bn size outstanding in maturities from three yearsto 30 years. Structured bonds in EUR amounted toEUR 1.4bn (roughly 30% of all EIB structures in 2007).

1 Volume of EUR 54.7bn raised under the global borrowing authorisation given by the Board of Directors for 2007, including ‘pre-funding’of EUR 77m completed in 2006 for 2007.

Borrowing programme volume before swaps2003-2007: 245 billion

(million)

10

20

30

40

50

020072003 2004 2005 2006

EURGBPUSD

Others


A significant innovation, reflecting EU leadership intackling climate change, was the Climate Aware-ness Bond (CAB) under the Bank’s EPOS (EuropeanPublic Offering of Securities) format – the secondof its kind launched by the EIB. This EUR-denomi-nated structured issue offered a unique combina-tion of environmental features. The CAB also of-fered a vehicle for ongoing EU financial marketintegration, as a first public bond offering across all27 EU Member States, facilitated by the passport-ingmechanism in the EU Prospectus Directive 2 andassociated EPOS documentation.

GBP: Largest non-gilt issuer

In GBP the Bank maintained its position as the larg-est non-gilt issuer, with a total outstanding sterlingdebt representing over 9% of the total GBP non-giltmarket at end-2007 3. The Bank made 58 transactions,raising a total of GBP 7.5bn (EUR 11bn) or 20.1% ofthe total programme for the year. During 2007, 13 dif-ferent maturities were tapped and there were threenew benchmark lines across the yield curve.

USD: Largest non-US issuer in Global format

In USD, 28 transactions were executed raising a to-tal of USD 19.1bn (EUR 14.4bn), or 26.3% of the to-tal programme for the year. Five Global USD 3bnbenchmarks were issued across major maturities:this was the largest amount raised by the Bank inany single year through the issuance of USD Globalbonds. 2007 also saw sustained interest for non-Global transactions, with Eurodollar issues for USD2.25bn (EUR 1.7bn) and structured transactions forUSD 1.8bn (EUR 1.3bn).

Diversification: strength in depth

Outside the three core currencies, EUR 8.8bn wasraised via 123 transactions in 16 other currencies.In addition, EUR 262.4mwas issued in synthetic for-mat in four additional currencies. A noteworthy re-sult in European currencies was the strengtheningand extension of the yield curve in Swedish krona.In non-European currencies, the Bank expandedits benchmark presence in a substantial range ofother currencies, through new benchmark issues inAustralian dollars, Canadian dollars, Japanese yenand New Zealand dollars.

Development impact

The Bank extended its developmental activities innew and future Member States and EU Partner andNeighbour countries, including issues in four newcurrencies: Romanian leu, non-synthetic Russianroubles, synthetic issues in Mauritian rupee and Gha-naian cedi. The debut in Romanian leu added diver-sity to the market by offering the longest-dated andlargest bond at the time of issuance. It was launchedand listed on the domestic market in Romania,thereby further enhancing the accessibility and ap-peal to Romanian investors. The Bank also made itsdebut in non-synthetic Russian roubles, with 5-yearand 10-year issues offering unusually long matur-ities to this market. In Turkish lira the Bank issued thelargest-ever single tranche Eurobond (TRY 1bn), pro-viding a new benchmark for the market.

In African currencies, the Bank diversified its pres-ence, launching 13 transactions in four currencies,including two new currencies, for a total of EUR 311mequivalent. All these issues directed international

2 The European Public Offering of Securities or “EPOS” format was first launched in 2006 and allows the Bank to leverage the EU ProspectusDirective, which sets out an efficient mechanism for the “passporting” of prospectuses in the Member States of the European Union: aprospectus approved by the competent authority in one Member State (“home country regulator”) can be used as a valid prospectus inany other Member State (“host Member State”) without the need for any further prospectus approval (“mutual recognition”).

3 Source: Barclays Sterling Non-Gilt Index, 31 December 2007.


Borrowings signed and raised in 2007 (*) vs. 2006

(EUR million)

Before swaps: After swaps:

2007 2006 2007 2006

EUR 20 531 37.5% 17 439 36.3% 42 766 78.1% 31 820 66.2%BGN (**) 28 0.1%CZK 18 0.04% 18 0.04%DKK 134 0.2% 235 0.5% 134 0.2% 235 0.5%GBP 11 023 20.1% 8 392 17.5% 6 123 11.2% 3 067 6.4%HUF 108 0.2% 110 0.2% 108 0.2% 97 0.2%PLN 27 0.1% 32 0.1% 27 0.1% 32 0.1%RON 90 0.2%SEK 893 1.6% 309 0.6% 403 0.7% 309 0.6%

Total EU 32 835 60% 26 535 55% 49 562 91% 35 577 74%

AUD 941 1.7% 1 840 3.8%BGN (**) 102 0.2%CAD 659 1.2%CHF 445 0.8% 703 1.5%HKD 101 0.2%ISK 261 0.5% 501 1.0%JPY 2 198 4.0% 1 277 2.7%NOK 196 0.4% 424 0.9% 63 0.1% 88 0.2%NZD 1 344 2.5% 933 1.9%RUB 115 0.2%TRY 1 097 2.0% 1 095 2.3%USD 14 400 26.3% 14 225 29.6% 5 099 9.3% 12 305 25.6%ZAR 234 0.4% 312 0.7% 80 0.2%

Total non-EU 21 890 40% 21 515 45% 5 162 9% 12 473 26%

TOTAL 54 725 100% 48 050 100% 54 725 100% 48 050 100%

(*) Resources raised under the global borrowing authorisation given by the Board of Directors for 2007, including ‘pre-funding’ of EUR 77m completed in 2006for 2007.

(**) Bulgaria joined the EU on 1 January 2007.

investor buying into these currencies. In Mauritianrupee the Bank’s issue was the first by a foreign is-suer and provided a new benchmark for the market.The first Ghanaian cedi issue provided a top-qualityalternative for investors in a market with very limit-ed supply. The Bank remained a reference issuer inSouth African rand, and expanded its presence inBotswanan pula with a new maturity. These issuesserved to enhance diversity and market activity lev-els in these African currencies, in particular throughattracting international investor participation.


Corporate Governance


Working with others

In 2007, the European Investment Bank and the Commission prepared Council discussionsand decisions focused on the Bank’s priority lending activities for the years to come. In thiscontext, the EIB participated in the Council of Ministers (ECOFIN) and interacted with theEuropean Parliament and its Committees. Furthermore, the Bank maintained a close rela-tionship with consultative bodies such as the Committee of the Regions and the EuropeanEconomic and Social Committee, pursued its close working relationship with other interna-tional financial institutions (IFIs) and kept on its dynamic dialogue with civil society organi-sations, including non-governmental organisations.

Open and constructive dialogue with thebodies representing European citizens

In 2007, a fruitful, dynamic and continuous dia-logue characterised the good and open relation-ships between the EIB and the European Parlia-ment. Parliament showed broad interest in theBank and clear support for its lending activities.The Bank’s President Philippe Maystadt presentedthe EIB’s Group activities and strategic lending pri-orities to several parliamentary committees, suchas the Committee on Budgetary Control, the Com-mittee on Economic and Monetary Affairs and theCommittee on Industry, Research and Energy. Atthe last meeting, specific emphasis was put on theBank’s contribution in support of a European Ener-gy Policy and climate change issues. At staff levelcontacts also took place in 2007.

The EIB was in close contact with the EuropeanEconomic and Social Committee (EESC), in par-ticular the Consultative Commission on IndustrialChange in connection with its report on “Innova-tion: Impact on industrial change and the role ofthe EIB”. At the invitation of the Chairman of theEESC’s Section for Economic and Monetary Unionand Economic and Social Cohesion, President May-stadt presented the Bank’s lending activities, par-ticularly in the field of energy as a new priority, re-search and development, education and SMEs.

The fifth “Open Days” event was organised by theCommittee of the Regions, together with DG RE-

GIO, under the title “Making it happen: Regionsdeliver growth and jobs”. The EIB’s President andBank staff participated in the workshops and pan-els to discuss the three Js (JASPERS, JEREMIE andJESSICA), microcredit, knowledge and innovation,as well as transport infrastructure, while the Bankalso organised and chaired a workshop on “PPPs:Experiences from the EIB and Structural Funds”. Inaddition, the EIB cooperated with the Committeeof the Regions’ Commission for Territorial Cohesionin drawing up a report on the “Leverage effect ofstructural funds”.

Close cooperation with the Commissionand IFIs for activities outside the EU

2007 was a year of continued cooperation withother international financial institutions and Euro-pean bilateral institutions, in particular in theframework of the new external mandates for EIBactivity outside the EU in the period 2007-2013.The main objectives are to maximise synergies andensure reasonable risk-sharing and coherent sectorand project conditionality.

Implementation of the Tripartite Agreement be-tween the Commission, the EBRD and the EIB onoperational cooperation in Russia, the EasternNeighbours and Central Asia started in 2007 withthe establishment of a joint project pipeline. In theMiddle East and North Africa/Southern Mediterra-nean region, the IFC has joined the Commission,


the EIB and the IBRD in a strategic cooperationpartnership.

Underpinning its lending activities in ACP coun-tries, the EIB collaborates closely with the Euro-pean Commission and Member States. The Bank isconsulted when the Commission prepares coun-try and regional strategies and the extent of itsinvolvement is normally covered in the relevantcountry or regional strategy paper. The purposeof this exercise is to ensure coherence and syner-gies between EU development aid and the Bank’soperations.

At a more operational level, the Bank works closelywith a number of European Development FinanceInstitutions (EDFIs) through the European Financ-ing Partners group. The EFP is a special-purposevehicle created in 2004 and jointly owned by theEuropean Development Finance Institutions andthe EIB, under which mainly medium-sized, com-mercially viable private sector projects in ACPcountries are financed. The Bank also collaboratesactively in a number of areas, notably in infrastruc-ture projects, with Agence Française de Dévelop-pement (AFD) and Kreditanstalt für Wiederauf-bau (KfW). The EU-Africa Infrastructure Trust Fund,

managed by the EIB, is fostering closer collabora-tion between EU donors and project financiers inpursuit of a common goal – enhanced financingfor regional infrastructure in sub-Saharan Africa.

Coordination between the EIB and major multilat-eral development banks and international finan-cial institutions is systematically pursued in orderto maximise the development impact and avoidduplication of effort, and thus reduce the admin-istrative burden on the governments of recipientcountries. During 2007, the EIB signed a Memo-randum of Understanding with the Asian Devel-opment Bank, to extend cooperation in the Asianand Pacific regions. The MoU defines a number ofpriority areas for cooperation, including renewableenergy and energy efficiency projects designed tocontribute to climate protection and lead to sig-nificant reductions in CO2 emissions. The EIB is alsoa member of the Infrastructure Consortium for Af-rica (ICA), which includes leading multilateral or-ganisations such as the World Bank Group and theAfrican Development Bank, as well as a number ofleading bilateral donors active in Africa. In Febru-ary 2008, the EIB hosted a working-level meetingof the ICA in Luxembourg, dedicated to regionalinfrastructure projects in Africa.


Governance and accountability

In 2006, the European Commission commissioned the European Institute of Public Admin-istration, in cooperation with the University of Helsinki, the University of Vaasa and theUtrecht School of Governance, to undertake a comparative study entitled: “Rules and Stand-ards of Professional Ethics for Holders of Public Office in the Member States of the EuropeanUnion and the EU Institutions.” 4

The results for the different EU institutions, published in 2007, revealed that, while the vari-ous EU institutions have entirely different and separate rules and standards concerning con-flicts of interests for holders of public office, from a study of regulation density among thesix EU institutions, the European Investment Bank and the European Commission came outtop in terms of issues regulated, followed by the European Central Bank and the EuropeanCourt of Auditors (ECA). The study also considered the Bank’s infrastructure for managingconflicts of interest to be sophisticated in nature.

Public consultation on the Bank’s anti-fraudpolicy

During 2007, the EIB conducted a review of its pol-icy, guidelines and procedures on fighting corrup-tion, fraud, money laundering and the financingof terrorism. In line with the Bank’s TransparencyPolicy, the review included a public consultationprocess, which was launched in February 2007. Theprocess closely followed a set of guidelines basedon the Bank’s first public consultation, which fo-cused on the EIB’s Public Disclosure Policy (for itsfirst consultation, the Bank used the procedures,principles and standards adopted by the EuropeanCommission and other IFIs as a benchmark).

The web-based public consultation was launchedon 12 February 2007 with the publication of a draftpolicy and procedures on the Bank’s website inEnglish, French and German. The consultation wasdivided into two rounds, the first taking place from12 February to 18 April and the second from 12 Julyto 13 September. In addition, the Bank held twopublic consultation meetings to discuss its policyreview with interested stakeholders. The meetingswere announced on the EIB’s website and invita-tions were sent to the 200 organisations and indi-viduals on the consultation mailing list. The con-sultation process was completed on 13 September.

Approval and publication of the new Policy andProcedures and the Consultation Report will takeplace in early 2008.

Working with civil society

Over the years, the EIB has attached great impor-tance to having an open relationship and active dia-logue with those civil society organisations (CSOs)that take a particular interest in the European Un-ion and the EIB. Early in 2007, the Bank briefed civilsociety organisations on the Bank’s 2006 results inBrussels. The EIB also organised twoworkshops. Thefirst one, in Paris, focused on the topics “Partneringwith NGOs in water and sanitation projects in de-veloping countries” and “The EIB’s environmentaland social safeguards and appraisal guidelines”.The second workshop took place in Lisbon in theautumn on the occasion of the European Develop-ment Days, the central theme of the workshop be-ing the Bank’s Economic and Social Impact Assess-ment Framework (ESIAF). The agendas for thesemeetings are set jointly by the EIB and interestedCSOs, and include speakers from both parties.

Last but not least, the EIB’s Public Disclosure Poli-cy has been reviewed to take account of the pro-visions of the Aarhus Regulation 1367/2006, which

4More information on corporateresponsibility issues can be foundin “Corporate Responsibility 2007”,a document included on the CDthat comes with this report. CRinformation is also available onthe Bank’s website.


has been applied by the EIB with regard to publicaccess to information, public participation in deci-sion-making and access to justice in environmentalmatters since June 2007.

Independent ex post evaluation, internalaudit and fraud investigation

The Inspectorate General (IG) combines two mainex post control functions, Internal Audit (IA) andOperations Evaluation (EV), and also includesFraud Investigation (IN). The Inspectorate plays acrucial role in safeguarding controls, improving op-erations and in the transparency and accountabil-ity process.

Operations Evaluation (EV) provides transparencyvis-à-vis the EIB’s governing bodies as well as in-terested outside parties by carrying out thematic,sector and regional/country ex post evaluations ofoperations financed by the EIB Group. Through itswork, it reinforces accountability and encouragesthe organisation to learn from experience.

In 2007, the Board of Directors endorsed a revisedstrategy for Operations Evaluation which reinforcesits role within the EIB Group. Six evaluations werecarried out:– three for the operations financed by the Bank inthe Member States in the fields of: health; Objec-tives 1 and 2 areas in Germany, Ireland and Spain;and research, development and innovation;

– one for the borrowing and financing operationsof the Bank in rand (South Africa) and one for theactivities of the FEMIP Trust Fund;

– and an evaluation of the mandates given by theBank to the EIF for venture capital operations.

Active cooperation with other multilateral devel-opment banks was reflected in a joint evaluationwith the EBRD and the joint publication of a paperentitled “The Nexus between Infrastructure andEnvironment”.

In addition, EV decided in 2007 to start giving spe-cific environmental ratings to the evaluated opera-tions in order to increase awareness. For all evalu-ated operations environmental ratings have beengood or satisfactory.

Evaluation reports highlighted the importance ofassessing promoters’ awareness of regulatory com-pliance and ethical issues, in particular in thosecases where the Bank provides a programme loanthat includes a large number of smaller operations.

Internal Audit examines and evaluates the rel-evance and effectiveness of the internal controlsystems and the procedures involved. It is also in-troducing and maintaining the Internal ControlFramework based on BIS guidelines. Internal Au-dit therefore reviews and tests controls in criticalbanking, information technology and administra-tive areas on a two to five-year cycle using a risk-based approach.

Under the provisions of the Bank’s Anti-Fraud Poli-cy, the EIB’s staff and business partners are requiredto maintain the highest level of integrity and effi-ciency in all EIB activities and operations. The EIBhas zero tolerance of fraud, corruption, collusionand coercion (known as “prohibited practices”),money laundering or terrorist financing in its ac-tivities or operations. The Fraud Investigation Unit(IG/IN) is the team in the Bank that investigatescredible allegations of prohibited practices in EIB-financed operations. In addition to its regular in-vestigation activities, IN organised the 2007 publicconsultation process on the EIB’s Anti-Fraud Policy.

Compliance awareness

The Office of the Chief Compliance Officer (OCCO)ensures that the Bank and its staff comply with allapplicable laws, regulations, codes of conduct andstandards of good practice and acts as a first-linedetector of potential non-observance of rules on


ethics and integrity. It checks ex ante the compli-ance of new policies, procedures, products and op-erations or intended actions. OCCO also monitorsoffshore lending and borrowing operations.

In cooperation with Human Resources (HR), OCCOinitiated a revision of the existing Whistle BlowingPolicies and Procedures in 2007. This exercise waspartly motivated by the requests made by severalNGOs during the public consultation on the Anti-Fraud Policy for a comprehensive and fully fledgedEIB policy on this matter. An awareness-raising ex-ercise was organised for EIB staff members, while aworking group was set up to develop the policiesand procedures further.

The first seminar – “Understanding money launder-ing to fight it and applying anti-money launderinginternational standards” – was organised by theBank in November 2007 in Douala, Cameroon, fora major African banking group that operates in anumber of countries of the subregion. This was ajoint initiative by the operational departments andOCCO in the context of entering into a relationshipwith the banking group in question and took theform of technical assistance to improve corporategovernance by helping people to properly under-stand arrangements for combating money laun-dering and the financing of terrorism and to putsuch arrangements in place. The aim was to en-courage the sharing of experiences and guaranteereal value added for the participants, while at thesame time taking account of the legal frameworkand local characteristics of Central Africa. Some six-ty or so top executives, including CEOs andmanag-ers of branches and auditing and compliance de-partments attended this seminar.

Complaints in 2007

The Complaints Office (CO) is a unit of the Europe-an Investment Bank designed to address citizens’and civil society organisations’ concerns regarding

the way the Bank carries out its activities. Underthe direct authority of the Secretary General, theComplaints Office ensures a centralised and struc-tured investigation, internal and external reportingand a highly responsive and proactive approach.When handling complaints, the CO favours concili-ation and problem-solving with a view to facilitat-ing amicable solutions with the parties concerned.

The CO deals with cases of maladministration. Thisoccurs when the Bank fails to act in accordancewith the relevant legislation or to respect the prin-ciples of good administration, or when it violateshuman rights. Examples of failure to respect theprinciples of good administration, as laid down bythe European Ombudsman, are: administrative ir-regularities, unfairness, discrimination, abuse of

Joint DFI approach to governance

One of the governance highlights of2007 was the signing of the ApproachStatement on Corporate Governancein emerging markets in Washingtonin October. The leaders of 31 Devel-opment Finance Institutions (DFIs) is-sued a joint statement, placing cor-porate governance at the forefront oftheir sustainable development agen-da in emerging markets. This initia-tive highlights the increased role ofgood corporate governance as a facili-tator of international capital flows toemerging market companies.

By signing the statement, the EIB rec-ognises the importance of good corpo-rate governance practices for sustain-able economic development; it alsoacknowledges the critical role that DFIscan play in promoting these values inemerging markets at both the privateand public sector level.


power, failure to reply, undue refusal of informa-tion and unnecessary delay. In 2007, the CO han-dled 27 complaints lodged directly with the EIBand four complaints lodged with the EuropeanOmbudsman. A large number of complaints con-cerned the environmental impact of projects fi-nanced by the Bank.

The EIB welcomes the closer cooperation with theEuropean Ombudsman that was agreed in 2007.Preparations are under way for the introductionof a Memorandum of Understanding between thetwo institutions, to be signed early in 2008. TheMoU will set out clearly the principles and proce-dures on which the close cooperation between thetwo parties is to be based.

European Investment Fund and governance

As a central part of its investment and guaran-tee policy, the European Investment Fund, the

EIB’s subsidiary, must actively promote principlesof good governance among its business partnersand oversee the implementation of such principlesthrough hands-on monitoring. The EIF also appliesthe usual investment restrictions relating to armsproduction, tobacco and human cloning and im-posing controls with regard to bioethics and GMOs.These controls are monitored by an independentcompliance function within the EIF.

The EIF has published a statement on CorporateSocial Responsibility. Its CSR policy follows theguiding principles applied by the EIB. The EIF hasa legal personality separate from that of the EIB,with separate contractual employment relations,although the terms of employment are broadly inline with those of the EIB. The EIF has issued a Dig-nity at Work policy along the lines of the EIB’s poli-cy and its code of conduct follows the principleslaid down in the EIB Code of Conduct. The EIF’s CSRpolicy, its code of conduct and associated policiesare coordinated by the EIF Compliance Function,which was established in 2005.


Direct footprint and working responsibly

The EIB itself creates its own environmental footprint, in particular through the materials itconsumes and the waste it generates; “housekeeping” in this sense is the subject of an inter-nal environmental management system, which was strengthened in 2007.

The EIB is committed to reducing the impact of itsactivities in terms of climate change. To that end, ithas fixed a reduction target for its direct CO2 emis-sions of 20-30%, to be attained by 2020. The Bankwill use the Greenhouse Gas (GHG) Protocol Initia-tive Standards for measuring and monitoring its di-rect environmental impact. The Bank has definedthe limits of its carbon footprint responsibility anda set of measures is being implemented that willprogressively reduce the direct emissions.

The EIB took the decision in 2007 to purchase elec-tricity originating 100% from renewable sources(hydropower, wind power and biomass). Othermeasures being implemented with the aim of re-ducing direct emissions relate mainly to encour-aging the use of public or clean transportation,reducing the levels of energy consumption, andbetter waste and recyclables management. In or-der to ensure that the targets are met, the Bank isclosely monitoring emissions’ levels and remedi-al action is taken as necessary. The EIB will offset

its residual emissions by purchasing high-qualitycarbon credits.

An internal communication plan to raise staffawareness on environmental issues, the impact ofclimate change and the importance of the meas-ures being proposed is being carried out withthe participation of both external and internalspeakers.

Working responsibly

Like all major financial institutions, the Bank isfaced with significant changes in both operationaland human resources terms. Consequently, in 2007human resources strategy was reformulated and itspriorities were redefined. Taking into account thosechanges and with the aim of maintaining the qual-ity of the administrative services, the new strategyis based on the following three pillars: excellence instaffing, motivation and individual development,and well-being at work.

People in an international, multicultural environ-ment are likely to be disproportionately vulner-able to the inevitable so-called life events. In fact,even the informal networks on which people usu-ally depend for everyday practical advice are oftenincomplete in such circumstances. To help preventissues from turning into real distractions, the Hu-man Resources Department has made a Staff As-sistance Programme (SAP) available to staff mem-bers and their families. Operated by an externalprovider, the SAP was launched in September2007. The programme offers a counselling servicedealing with issues relating to personal, relation-

Active staff by category, as at 31/12/2007

100

200

300

400

500

0SupportManagement Executive

FemaleMale


ship, emotional or workplace problems as well asoffering practical advice concerning family, addic-tion, legal, financial or housing issues. The serviceis accessed via telephone, but with face-to-facesessions, by appointment, for more serious prob-lems. It is strictly confidential, even anonymous ifpreferred by the user.

Staff representation

Staff issues are dealt with through consultations be-tween HR and the Staff Representatives (SRs), sup-ported by working groups and joint committees.The present College of SRs was elected in March2007. Staff Representatives are actively taking partin the discussions regarding the implementation ofthe salary and individual performance evaluationreform. In parallel, the Staff Representatives havebeen actively involved in the review of the Bank’spension system.

More generally, Staff Representatives are regular-ly consulted on issues affecting the well-being ofstaff, either through monthly meetings with Hu-man Resources Management or in ad hoc com-mittees, or in specific consultation meetings. Forinstance, they participated in the review of the con-

ditions of employment at the EIB’s external offices.The SRs also contributed many ideas in the InternalEnvironmental Management Group to reduce theBank’s carbon footprint.

Equal opportunities

The Joint Committee on Equal Opportunities(COPEC) monitors implementation of the equalopportunities policy in terms of career develop-ment, recruitment, training and social welfare in-frastructure. Following an independent reviewof the Bank’s gender status in 2006, the Bank hasbroadened its approach, aligned it with the globaltrend, from gender to a more inclusive view of di-versity. This approach will better support the im-plementation of the Bank’s new operational strat-egy, which calls for reaching out from old comfortzones and seeking diverse candidate pools, non-traditional ways of doing business, and new skillprofiles. Diversity and equality are seen as busi-ness imperatives, and as part of the Bank’s corpo-rate social and ethical responsibility. In 2007, theBank started updating and developing the coreaspects of Gender and Diversity (G&D) Strategy,the Action Plan and a monitoring scheme for theEIB Group.

EIB staff

900

1 000

1 100

1 200

1300

1500

1400

020072003

1 2051 251

1 3241 369

1 453

2004 2005 2006


EIB Statutory Bodies

The Board of Governors comprises Ministers des-ignated by each of the 27 Member States, usuallyFinance Ministers. It lays down credit policy guide-lines, approves the annual accounts and balancesheet, and decides on the Bank’s participation infinancing operations outside the European Unionas well as on capital increases. It also appoints themembers of the Board of Directors, the Manage-ment Committee and the Audit Committee.

The Board of Directors has sole power to take de-cisions in respect of loans, guarantees and borrow-ings. As well as seeing that the Bank is properlyrun, it ensures that the Bank is managed in keep-ing with the provisions of the Treaty and the Stat-ute and with the general directives laid down bythe Governors. Its members are appointed by theGovernors for a renewable period of five years fol-lowing nomination by the Member States and areresponsible solely to the Bank.

The Board of Directors consists of 28 Directors, withone Director nominated by eachMember State andone by the European Commission. There are 18 Al-ternates, meaning that some of these positions willbe shared by groupings of States.

Furthermore, in order to broaden the Board of Di-rectors’ professional expertise in certain fields, theBoard is able to co-opt a maximum of six experts(three Directors and three Alternates), who partici-pate in the Board meetings in an advisory capacity,without voting rights.

Decisions are taken by a majority consisting of atleast one third of members entitled to vote andrepresenting at least 50% of the subscribed capital.

TheManagement Committee is the Bank’s perma-nent collegiate executive body. It has nine mem-bers. Under the authority of the President and thesupervision of the Board of Directors, it overseesthe day-to-day running of the EIB, prepares deci-sions for Directors and ensures that these are im-plemented. The President chairs the meetings ofthe Management Committee. The members of theManagement Committee are responsible solely tothe Bank; they are appointed by the Board of Gov-ernors, on a proposal from the Board of Directors,for a renewable period of six years.

According to the Bank’s Statute, the President isalso Chairman of the Board of Directors.

The provisions governing thesebodies are set out in the Bank’sStatute and Rules of Procedure.Lists of the members of the EIB’sstatutory bodies and their cur-ricula vitae, alongwith additionalinformation on remuneration ar-rangements, are regularly updatedand posted on the Bank’s website:www.eib.org.

The ManagementCommittee


The Audit Committee is an independent body an-swerable directly to the Board of Governors and re-sponsible for verifying that the operations of theBank have been conducted and its books kept ina proper manner. At the time of approval of the fi-nancial statements by the Board of Directors, theAudit Committee issues its statements thereon.The reports of the Audit Committee on the resultsof its work during the preceding year are sent to

the Board of Governors together with the annualreport of the Board of Directors.

The Audit Committee is composed of three mem-bers and three observers, appointed by the Gover-nors for a term of office of three years.

Capital: Each Member State’s share in the Bank’scapital is based on its economic weight within theEuropean Union (expressed in GDP) at the time ofits accession. In the context of enlargement to in-clude Bulgaria and Romania on 1 January 2007,the provisions of the EIB’s Statute have modifiedthe Bank’s capital shares and governance. Under itsStatute, the Bank is authorised to have maximumloans outstanding equivalent to two and a halftimes its capital.

In total, the Bank’s subscribed capital amounts tomore than EUR 164.8bn.

The Audit Committee


Breakdown of the EIB’s capital as at 1 January 2007

0 10 000 000 000 20 000 000 000

Amount (EUR) %

Germany 26 649 532 500 DE 16.170

France 26 649 532 500 FR 16.170

Italy 26 649 532 500 IT 16.170

United Kingdom 26 649 532 500 GB 16.170

Spain 15 989 719 500 ES 9.702

Belgium 7 387 065 000 BE 4.482

Netherlands 7 387 065 000 NL 4.482

Sweden 4 900 585 500 SE 2.974

Denmark 3 740 283 000 DK 2.269

Austria 3 666 973 500 AT 2.225

Poland 3 411 263 500 PL 2.070

Finland 2 106 816 000 FI 1.278

Greece 2 003 725 500 GR 1.216

Portugal 1 291 287 000 PT 0.784

Czech Republic 1 258 785 500 CZ 0.764

Hungary 1 190 868 500 HU 0.723

Ireland 935 070 000 IE 0.567

Romania 863 514 500 RO 0.524

Slovak Republic 428 490 500 SK 0.260

Slovenia 397 815 000 SI 0.241

Bulgaria 290 917 500 BG 0.177

Lithuania 249 617 500 LT 0.151

Luxembourg 187 015 500 LU 0.113

Cyprus 183 382 000 CY 0.111

Latvia 152 335 000 LV 0.092

Estonia 117 640 000 EE 0.071

Malta 69 804 000 MT 0.042

Total 164 808 169 000 100.000


PhilippeMAYSTADT President of the Bank and Chairman of its Board of Directors➾ General strategy➾ Institutional matters, relations with other European institutions➾ Reporting from Inspector General, Financial Controller and Chief Compliance

Officer➾ Human resources➾ Internal communication➾ Equal opportunities policy; Chairman of Joint Committee on Equal Opportunities

(COPEC)➾ Chairman of EIF Board of Directors➾ Chairman of Budget Committee

Philippe de FONTAINE VIVE CURTAZ Vice-President➾ Financing operations in France and Mediterranean partner countries➾ Financing of SMEs➾ Partnership with banking sector➾ External communication➾ Transparency and information policy➾ Relations with NGOs➾ Member of EIF Board of Directors

Torsten GERSFELT Vice-President➾ Financing operations in Netherlands, Denmark, Ireland, ACP States and

South Africa➾ Energy matters➾ Economic, financial and sectoral studies➾ Chairman of Arts Committee

Simon BROOKS Vice-President➾ Financing operations in United Kingdom➾ Environmental protection➾ Internal audit, external audit and relations with Audit Committee➾ Compliance➾ Relations with European Court of Auditors➾ Relations with European Anti-Fraud Office (OLAF) and European Ombudsman➾ Buildings, facilities and logistics

Carlos DA SILVA COSTA Vice-President➾ Financing operations in Spain, Belgium, Portugal, Luxembourg, Asia and

Latin America➾ Legal aspects of operations and products➾ Funding➾ Member of Arts Committee

Matthias KOLLATZ-AHNEN Vice-President➾ Financing operations in Germany, Austria and Romania and in Croatia and

Turkey➾ Economic and social cohesion; convergence➾ JASPERS initiative (Joint Assistance to Support Projects in European Regions)➾ Risk management: credit, market and operational risks➾ Member of Subsidies Committee

Eva SREJBER Vice-President➾ Financing operations in Sweden, Finland, Lithuania, Latvia, Estonia,

eastern neighbours, Russia, and EFTA countries➾ i2i programme (implementation of Lisbon strategy), including RSFF

(Risk-Sharing Finance Facility)➾ Ex post evaluation of operations➾ Information technologies➾ Chairman of Subsidies Committee

Marta GAJĘCKA Vice-President➾ Financing operations in Poland, Czech Republic, Hungary, Slovakia, Slovenia

and Bulgaria➾ Trans-European transport and energy networks➾ Corporate social responsibility➾ Alternate Governor of EBRD

Dario SCANNAPIECO Vice-President➾ Financing operations in Italy, Greece, Cyprus, Malta and the western Balkans➾ Structured Finance Facility (SFF)➾ Budget➾ Accounting➾ Governor of EBRD

Philippe MAYSTADTPresident of the Bank and Chairman of its Board of Directors

Philippe de FONTAINE VIVE CURTAZVice-President

Torsten GERSFELTVice-President

Simon BROOKSVice-President

Matthias KOLLATZ-AHNENVice-President

Marta GAJĘCKAVice-President

Dario SCANNAPIECOVice-President

Eva SREJBERVice-President

Carlos DA SILVA COSTAVice-President

TheManagement Committee of the EIBThe College of theManagement Committee Members and their supervisory responsibilitiesSituation as at 01/06/2008


Organisation chart

General Secretariat andLegal Affairs

Alfonso QUEREJETASecretary General and General Counsel of Legal Affairs

Institutional AffairsDominique de CRAYENCOURDirector

• Guido PRUD’HOMME• Ferdinand SASSEN

2 Governing Bodies, Secretariat, ProtocolHugoWOESTMANNDirector

2 Linguistic ServicesKenneth PETERSEN

Legal Affairs

Community and Financial Affairs; Lending Operationsoutside Europe

Marc DUFRESNEDeputy General Counsel

• Jean-Philippe MINNAERTData Protection Officer

2 Financial IssuesNicola BARRAssociate Director

2 Institutional and Staff IssuesCarlos GÓMEZ DE LA CRUZ

2 Mediterranean (FEMIP), Africa, Caribbean, Pacific – InvestmentFacility, Asia and Latin AmericaReganWYLIE-OTTEAssociate Director

Lending Operations in EuropeGerhard HÜTZDirector

• Gian Domenico SPOTA

2 Operational Policy, New Financial InstrumentsJoséMaría FERNÁNDEZ MARTÍN

2 Adriatic Sea, South-East EuropeManfredi TONCI OTTIERIAssociate Director

2 United Kingdom, Ireland, Baltic States, Denmark, Finland,Sweden, EFTA CountriesPatrick Hugh CHAMBERLAINAssociate Director

2 France, Belgium, Netherlands, LuxembourgPierre ALBOUZE

2 Central Europe, Poland, Russia, Eastern Neighbours…

2 Spain, PortugalIgnacio LACORZANA

• Maria SHAW-BARRAGAN

Strategy and Corporate Centre

Rémy JACOBDirector GeneralFinancial Controller and Chief Information Officer

• Luis BOTELLA MORALESDirector

2 Financial ControlFrank TASSONE

2 Resource Management and CoordinationGeneviève DEWULF

Strategy andManagement ControlJürgen MOEHRKEDirector

•Methods and Processes Improvement Task ForceTheoharry GRAMMATIKOSAssociate Director

• IFRS Task ForceHenricus SEERDEN

2 Economic and Financial StudiesÉric PERÉEAssociate Director

2 Budget, Analytics and PartnershipsJanette FOSTER

2 Strategy and ProcessesClaudio PASQUI

2 Corporate Responsibility PolicyFelismino ALCARPE

CommunicationGill TUDORSpokesperson and Director

2 Press Office…

2 Public Information and Relations with Civil SocietyYvonne BERGHORST

Information Offices

h Paris OfficeHenry MARTY-GAUQUIÉDirector

h London OfficeAdamMcDONAUGH

h Berlin OfficePaul Gerd LÖSER

h Rome Office…

h Madrid OfficeMercedes SENDÍN DE CÁCERES

h Brussels OfficeNicholas ANTONOVICS

Department 2 Division h External Office (situation at 1 June 2008)


Organisation chart

Information TechnologyDerek BARWISEDirector

2 Technology and Infrastructure…

2 Finance and Lending ApplicationsJean-Yves PIRNAY

2 Administration and Risk ApplicationsSimon NORCROSS

Buildings, Logistics and DocumentationPatricia TIBBELSDirector

• New Building Task ForceEnzo UNFER

2 Facilities ManagementEnzo UNFER (ad interim)

2 Purchasing and Administrative ServicesGudrun LEITHMANN-FRÜH

2 Documentation and Records Management...

Directorate for Operations inthe European Union andCandidate Countries

Thomas HACKETTDirector General

Operations SupportSimon BARNESChief Operational Coordinator

2 CoordinationDietmar DUMLICH

• Ann-Louise AKTIV VIMONT

2 Information Systems and ApplicationsThomas FAHRTMANN

2 Business SupportBruno DENIS

JESSICAEugenio LEANZA

• Gianni CARBONARO

Action for Growth InstrumentsThomas BARRETTDirector

2 Trans-European NetworksJukka LUUKKANEN

• Ale Jan GERCAMA

2 Knowledge Economy (i2i)Heinz OLBERS

2 Environment, Energy and AdvisoryChristopher KNOWLESAssociate Director

• Andrew VINCE

Western EuropeLaurent de MAUTORTDirector

2 i2i and CorporatesRobert SCHOFIELD

2 Project FinanceCheryl FISHERAssociate Director

2 Public Sector and UtilitiesJean-Christophe CHALINE

2 ImplementationPeter JACOBS

Spain, PortugalCarlos GUILLEDirector

2 Spain – InfrastructureLuca LAZZAROLI

2 Spain – Banks and CorporatesFernando de la FUENTEAssociate Director

h Madrid OfficeAngel FERRERO

2 PortugalMiguel MORGADO

h Lisbon OfficeManuel NETO PINTO

2 ImplementationRui Artur MARTINS

Central EuropeJoachim LINKDirector

2 Germany – Infrastructure, Energy and Promotional BanksPeggy NYLUND GREENAssociate Director

2 Germany – Banks and CorporatesAnita FUERSTENBERG-LUCIUS

2 Austria, Czech Republic, Hungary, Slovakia – Infrastructure andPromotional BanksJean VRLA

2 Austria, Czech Republic, Hungary, Slovakia – Banks andCorporatesPaolo MUNINI

h Vienna OfficeEmanuel MARAVICDirector

Adriatic SeaRomualdo MASSA BERNUCCIDirector

• Luigi MARCON

2 Italy, Malta – InfrastructureAntonello RICCI

• Flavio SCHIAVO CAMPO de GREGORIO

2 Italy, Malta – Banks and CorporatesMarguerite McMAHON

2 Slovenia, Croatia, Western BalkansDominique COURBIN



Organisation chart

South-East Europe

Andreas VERYKIOSDeputy Director General

2 GreeceThemistoklis KOUVARAKIS

h Athens OfficeFotini KOUTZOUKOU

2 Bulgaria, Romania, CyprusCormac MURPHY

h Bucharest OfficeGötz VON THADDEN

2 TurkeyFranz-Josef VETTER

• Hakan LUCIUSh Ankara Office

...h Istanbul Office

Alain TERRAILLON

Baltic SeaTilman SEIBERTDirector

2 PolandKim KREILGAARD

h Warsaw OfficeMichal LUBIENIECKI

2 Baltic States, Denmark, Finland, Sweden, EFTA CountriesMichael O’HALLORAN

h Helsinki OfficeJaani PIETIKAINEN

Directorate for Operationsoutside the European Union andCandidate Countries

Jean-Louis BIANCARELLIDirector General

•Matthias ZÖLLNERManagerial Adviser for Climate Change Operations

2 Development Economics Advisory ServiceDaniel OTTOLENGHIChief Development EconomistAssociate Director

• Bernard ZILLER

European Neighbour and Partner CountriesClaudio CORTESEDirector

• Alain NADEAU

2 MaghrebBernard GORDON

h Rabat OfficeRené PEREZ

h Tunis OfficeDiederick ZAMBON

2 Near EastJavier GUTIÉRREZ DEGENÈVE

h Cairo OfficeJane MACPHERSON

2 Eastern Europe, Southern Caucasus and RussiaConstantin SYNADINO

• Umberto DEL PANTA

2 Special OperationsJean-Christophe LALOUX

Africa, Caribbean, Pacific – Investment FacilityMartin CURWENDirector

2 West Africa and SahelGustaaf HEIM

h Dakar OfficeJack REVERSADE

2 Central and East AfricaFlavia PALANZAAssociate Director

h Nairobi OfficeCarmelo COCUZZA

2 Southern Africa and Indian OceanSerge-Arno KLÜMPER

• Angela JENNIh Tshwane (Pretoria) Office

DavidWHITE

2 Caribbean and PacificDavid CRUSH

h Fort-de-France OfficeAnthonyWHITEHOUSE

h Sydney OfficeJean-Philippe DE JONG

2 Resource and Business DevelopmentTassilo HENDUSAssociate Director

2 Portfolio Management and PolicyCatherine COLLIN

Asia and Latin AmericaFrancisco de PAULA COELHODirector

2 Latin AmericaAlberto BARRAGAN

2 AsiaPhilippe SZYMCZAK

Transaction Management andRestructuring

Klaus TRÖMELDirector

2 Counterpart and Contract Monitoring and ReviewStefano BOTTANI

2 Restructuring, Refinancing and RepackagingVolkmar BRUHN-LÉON



Organisation chart

Finance Directorate

Bertrand de MAZIÈRESDirector General

2 Coordination and Financial PoliciesÉric LAMARCQ

Capital MarketsBarbara BARGAGLI PETRUCCIDirector

2 EuroCarlos FERREIRA DA SILVA

• Aldo ROMANI

2 Europe (excluding euro), AfricaRichard TEICHMEISTER

• Thomas SCHROEDER

2 America, Asia, PacificEila KREIVI

• Sandeep DHAWAN

2 Investor Relations andMarketingPeter MUNRO

TreasuryAnneli PESHKOFFDirector

2 Liquidity ManagementFrancis ZEGHERS

• Timothy O’CONNELL

2 Asset/Liability ManagementJean-Dominique POTOCKI

• Nicola SANTINI

2 Portfolio ManagementPaul ARTHUR

2 Financial Engineering and Advisory ServicesGuido BICHISAO

Planning and Settlement of OperationsElisabeth MATIZDirector

2 Back Office Loans and Operational Lending SupportRalph BAST

2 Back Office TreasuryCynthia LAVALLÉ

2 Back Office BorrowingsAntonio VIEIRA

2 Systems and ProceduresLorenzo CICCHELLI

Projects Directorate

Grammatiki TSINGOU-PAPADOPETROUDirector General

2 Sustainable DevelopmentPeter CARTERAssociate Director

• Resources ManagementBéatrice LAURY

2 Quality ManagementMaj THEANDER

2 Project Development and Implementation SupportHugh GOLDSMITH

Innovation and CompetitivenessConstantin CHRISTOFIDISDirector

2 Manufacturing and Industry (R&D)Gunnar MUENT

2 ICT and e-EconomyHarald GRUBER

2 Human CapitalJohn DAVIS

•Maria Luisa FERREIRA

2 Services and SMEs, Agroindustry (including Biofuels)Hans-Harald JAHN

• Pedro OCHOA• Rüdiger SCHMIDT• Campbell THOMSON

Transport and EnergyChristopher HURSTDirector

• Nigel HALL

2 Road and RailMatthew ARNDT

2 Air and SeaJosé Luis ALFAROAssociate Director

• Klaus HEEGE

2 Energy Generation and NetworksFrançois TREVOUX

• Heiko GEBHARDT• JosefWELTERMANN

2 Energy Efficiency and RenewablesJuan ALARIOAssociate Director

Convergence and EnvironmentGuy CLAUSSEDirector

2 Water and Environmental ProtectionJosé FRADEDeputy Director

•Michel DECKER

2 Programme LendingEugenia KAZAMAKI-OTTERSTEN

2 Urban Transport and other Urban InfrastructureMateo TURRÓ CALVETAssociate Director

•Mario AYMERICH



2 Development Projects, New Initiatives, Solid WasteStephenWRIGHTAssociate Director

• Eberhard GSCHWINDT• Philippe GUINET

JASPERS

PatrickWALSHDirector

Agustin AURÍADeputy Director

h Vienna OfficeAxel HÖRHAGER

h Bucharest OfficeNicos YIAMBIDES

h Warsaw OfficeMichael MAJEWSKI

Risk Management Directorate

Pierluigi GILIBERTDirector General

2 Coordination and SupportJuliette LENDARO

• Pierre TYCHON

Credit RiskPer JEDEFORSDirector

2 Corporates, Public, InfrastructureStuart ROWLANDSAssociate Director

2 Project and Structured FinancePaolo LOMBARDO

2 Financial Institutions and SecuritisationsPer de HAAS (acting)

Financial and Operational RisksAlain GODARDDirector

2 ALM andMarket Risk ManagementGiancarlo SARDELLI

• Vincent THUNUS

2 DerivativesLuis GONZÁLEZ-PACHECO

2 Operational RisksAntonio ROCA IGLESIAS

Inspectorate General

JanWillem van der KAAIJInspector General

• Fraud Investigations UnitSiward de VRIES

2 Internal AuditCiaran HOLLYWOOD

2 Operations EvaluationAlain SÈVEAssociate Director

• Gavin DUNNETT• Rainer SAERBECK•Werner SCHMIDT

EIB Group Compliance Office

Konstantin J. ANDREOPOULOSChief Compliance Officer

• Francesco MANTEGAZZADeputy Chief Compliance Officer

Human Resources

Michel GRILLIDirector

• Jean-Philippe BIRCKEL

2 Administration andManagement Systems…

• Catherine ALBRECHT

2 StaffingLuis GARRIDO

2 Internal CommunicationAlain JAVEAU

Barbara BALKEDeputy Director

2 People Development and OrganisationManagement…

• Ute PIEPER-SECKELMANN

2 Well-being andWork/Life BalanceRené CHRISTENSEN

Representation on Board of Directorsof European Bank for Reconstruction and Development

Terence BROWNDirector representing the EIB

Walter CERNOIAAlternate Director


The organisation chart, curricula vitae of the Directors General and heads of control units and additionalinformation on the remuneration arrangements for all EIB staff are regularly updated and posted on theBank’s website: www.eib.org


EIF Statutory Bodies

EIF Management and Key People

Detailed information on EIF’s statutory bodies (composition, curriculavitae ofmembers, remuneration) and services (composition, curriculavitae of Directors General and Directors, remuneration of all staff ) isregularly updated and posted on EIF’s website:www.eif.org

EIF is managed and administered by the fol-lowing three authorities:

➾ the General Meeting of shareholders (EIB,European Union, 31 financial institutions),which meets at least once a year;

➾ the Board of Directors, composed of sevenmembers and seven alternates, which, interalia, decides on the Fund’s operations;

➾ the Chief Executive, who is responsible forthe management of the Fund in accord-ance with the provisions of its Statutes andthe guidelines and directives adopted bythe Board of Directors.

EIF’s accounts are audited by a three-personAudit Board appointed by the General Meet-ing and by independent external auditors.

Chief ExecutiveRichard PELLY

Deputy Chief ExecutiveJean-Marie MAGNETTE

JEREMIE2 Head ➾ Marc SCHUBLIN2 Deputy Head ➾ Hubert COTTOGNI2 Key People ➾ Alexander ANDÒ

➾ Graham COPE

Risk Management andMonitoring2 Head ➾ Thomas MEYER2 Key People ➾ Helmut KRAEMER-EIS

➾ Pierre-Yves MATHONET

Secretary GeneralRobertWAGENER

Legal2 Head ➾ Maria LEANDER

Compliance2 Head ➾ Jobst NEUSS

Corporate Affairs and Finance2 Head ➾ Frédérique SCHEPENS2 Key People ➾ Petra de BRUXELLES -

Human Resources➾ Marceline HENDRICK - Accounts➾ Delphine MUNRO -

Marketing Communications➾ John PARK - ICT

Director, InvestmentsJohn A. HOLLOWAY

Venture Capital2 Heads ➾ Jean-Philippe BURCKLEN

➾ Jacques DARCY➾ Ulrich GRABENWARTER

2 Deputy Heads ➾ Matthias UMMENHOFER➾ David WALKER

2 Key People ➾ Christine PANIER

Guarantees and Securitisation2 Head ➾ Alessandro TAPPI2 Deputy Head ➾ Christa KARIS2 Key People ➾ Per-Erik ERIKSSON

➾ Gunnar MAI

Situation as at 25/04/2008


Projects eligible for financing by the EIB Group

Within the European Union, projects considered for financing must contribute to one or moreof the following objectives:➾ strengthening economic and social cohesion: promoting investment in all sectors of the

economy to foster the economic advancement of the less-favoured regions;➾ furthering investment contributing to the development of a knowledge-based and inno-

vation-driven society;➾ improving infrastructure and services in the health and education sectors, the key contrib-

utors to human capital formation;➾ developing transport, telecommunications and energy transfer infrastructure networks

with a Community dimension;➾ preserving the environment and improving the quality of life;➾ securing energy supplies through rational use, harnessing of indigenous resources, includ-

ing renewable energy, and import diversification.

The EIB Group assists the development of SMEs by enhancing the financial environment inwhich they operate by means of:➾ medium and long-term EIB credit lines;➾ EIF venture capital operations;➾ EIF SME guarantees.

In the Candidate and Partner Countries, the Bank participates in implementing the Union’s de-velopment aid and cooperation policies. It operates in:➾ the Candidate and potential Candidate Countries in South-East Europe, where it contrib-

utes to the goals of the Stability Pact by directing its lending towards not only reconstruc-tion of basic infrastructure and projects with a regional dimension but also private sectordevelopment;

➾ the non-member Mediterranean countries by helping to attain the objectives of the Euro-Mediterranean Partnership with a view to the creation of a free trade area by 2010;

➾ the African, Caribbean and Pacific (ACP) States, South Africa and the OCTs (Overseas Coun-tries and Territories), where it promotes the development of basic infrastructure and thelocal private sector;

➾ Asia and Latin America, where it supports projects of mutual interest to the Union and thecountries concerned.


EIB Group Addresses

External offices:

AustriaMattiellistraße 2-4A-1040Wien3 (+43-1) 505 36 765 (+43-1) 505 36 74

BelgiumRue de la loi 227 / Wetstraat 227B-1040 Bruxelles / Brussel3 (+32-2) 235 00 705 (+32-2) 230 58 27

FinlandFabianinkatu 34PL 517FI-00101 Helsinki3 (+358) 106 18 08 305 (+358) 92 78 52 29

France21, rue des PyramidesF-75001 Paris3 (+33-1) 55 04 74 555 (+33-1) 42 61 63 02

GermanyLennéstraße 11D-10785 Berlin3 (+49-30) 59 00 47 905 (+49-30) 59 00 47 99

Greece1, Herodou Attikou & Vas. Sofias AveGR-106 74 Athens3 (+30-210) 68 24 5175 (+30-210) 68 24 520

ItalyVia Sardegna 38I-00187 Roma3 (+39) 06 47 19 15 (+39) 06 42 87 34 38

PolandPlac Piłsudskiego 1PL-00-078Warszawa3 (+48-22) 310 05 005 (+48-22) 310 05 01

PortugalAvenida da Liberdade, 190-4° AP-1250-147 Lisboa3 (+351) 213 42 89 895 (+351) 213 47 04 87

RomaniaStr. Jules Michelet 18-20R-010463 Bucureti, Sector 13 (+40-21) 208 64 005 (+40-21) 317 90 90

SpainCalle JoséOrtega y Gasset, 29, 5°E-28006 Madrid3 (+34) 914 31 13 405 (+34) 914 31 13 83

United Kingdom2 Royal Exchange BuildingsLondon EC3V 3LF3 (+44) 20 73 75 96 605 (+44) 20 73 75 96 99

European Investment Bankwww.eib.org -U [email protected]

100, boulevard Konrad Adenauer 3 (+352) 43 79 1L-2950 Luxembourg 5 (+352) 43 77 04


Please consult the Bank’s website for any change in the list of existing offices and for details on offices that mayhave been opened following publication of this brochure.

Caribbean1, Boulevard du Général de GaulleF-97200 Fort-de-France3 (+596) 596 74 73 105 (+596) 596 56 18 33

Egypt6, Boulos Hanna StreetDokki, 12311 Giza3 (+20-2) 33 36 65 835 (+20-2) 33 36 65 84

KenyaAfrica Re Centre, 5th floorHospital Road, PO Box 40193KE-00100 Nairobi3 (+254-20) 273 52 605 (+254-20) 271 32 78

MoroccoRiad Business CenterAile sud, Immeuble S3, 4e étageBoulevard Er-RiadRabat3 (+212) 37 56 54 605 (+212) 37 56 53 93

PacificLevel 32, ABN AMRO Tower88 Phillip StreetSydney NSW 2000Australia3 (+61-2) 82 11 05 365 (+61-2) 82 11 05 38

Senegal3, rue du Docteur RouxBP 6935, Dakar-Plateau3 (+221) 338 89 43 005 (+221) 338 42 97 12

South Africa5 Greenpark Estates27 George Storrar DriveGroenkloof0181 Tshwane (Pretoria)3 (+27-12) 425 04 605 (+27-12) 425 04 70

Tunisia70, avenue Mohamed VTN-1002 Tunis3 (+216) 71 28 02 225 (+216) 71 28 09 98

European Investment Fundwww.eif.org -U [email protected]

43, avenue J.F. Kennedy 3 (+352) 42 66 88 1L-2968 Luxembourg 5 (+352) 42 66 88 200


The EIB wishes to thank the following promoters and suppliers for the photographs illustrating this report:Jp Laudanski, Vinci Construction Grands Projets (EIB Building).The other photographs and illustrations were supplied by the EIB’s Graphic Workshop.

Printed in Luxembourg by Imprimerie Centrale s.a. on AcondaVerd Silk paper using vegetable oil-based inks. Certified in accordancewith Forest Stewardship Council (FSC) rules, the paper consists of 60% virgin fibre (of which at least 30% fromwell-managed forests), 30%de-inked post-consumer waste and 10%mill broke.

On the CD-Rom enclosed with this brochure, readers will find information contained in thethree volumes, plus the “Corporate Responsibility 2007”document as well as the main bro-chures and other documents published in 2007 in the different languages available.

The Annual Report is also available on the Bank’s websitewww.eib.org/report.

EIB-Gruppe EIB Group Groupe BEI

2007

Europä i sche Inves t i t ionsbank-Gruppe • European Inves tment Bank Group • Groupe Banque européenne d ’inves t i s sement

1. Tätigkeits- und Corporate Responsibility-Bericht

Activity and Corporate Responsibility Report

Rapport d’activité et rapport sur la responsabilité d’entreprise

2. Finanzbericht

Financial Report

Rapport financier

3. Statistischer Bericht

Statistical Report

Rapport statistique

Ann

ualRep

ort2

007

VolumeI

© EIB – 06/2008 – EN QH-AD-08-001-EN-C ISSN 1725-3551


Annual Report 2007 • Volume I Annual Report 2007


Volume I


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