After a three hours trip from Strasbourg, we arrived in Luxembourg at the European Investment Bank. There we had a lecture about what this bank (the EIB) is and does.
The EIB was created by the treaty of Rome in 1958 as the long-term lending Bank of the European Union. Its main goal was to finance the poorer regions of the six founding members of the EU, mainly Italy. Now the task of the EIB is to contribute towards the integration, balanced development and economic and social cohesion of the EU Member States.
The shareholders of the bank are the 27 Member States of the EU. It is a save and solid institution with a consistent AAA rating because of the strong shareholder support. It also has a strong capital base, exceptional asset quality, conservative risk management and a sound funding strategy.
As many would expect, the bank is not financed through the EU budget. It derives its capital by lending from EU member states and by borrowing on the financial market from both private and public institutions. €60 to €70 billion is borrowed by the bank on a yearly basis and its own lendings to regional projects count for approximatly €50 billion per year.
The EIB operates both inside and outside the EU region. Inside the EU its projects and investments are divided beteen 6 areas; Regional development, Innovation (R&D and technology), Environment, Transport, Sustainable energy and loans to smaller projects of local authorities and small and medium-sized enterprises.
The EIB should not be compared with The World Bank but does lend money to projects in countries outside the EU based on EU external cooperation and development policies. It is active in 150 countries which count for 10-15% of the general lendings. Outside the EU it operates in the following areas;
· Candidate and Potential Candidate Countries of South-East Europe
· Mediterranean Partner Countries (e.g. Tunesia, Morocco and Egypt)
· Russia and Eastern Neighbours (e.g. Ukraine and Moldova)
· Africa, the Carribean and the Pacific
· Asia and Latin America (e.g. Brazil, Paraguay and India) [Jordy van Kuijk]