European Investment Bank

European Investment Bank
European Investment Bank (emblem).svg
Europäische Investitionsbank.jpg
EIB headquarters, East building
TypeInternational financial institution
OwnerEU member states
Werner Hoyer

The European Investment Bank (EIB) is a publicly owned international financial institution whose shareholders are the EU member states. It was established in 1958 under the Treaty of Rome as a "policy-driven bank" using financing operations to further EU policy goals [1] such as European integration and social cohesion.[2]

The member states set the bank's broad policy goals and oversee the decision-making bodies of the bank: its board of governors and board of directors.[3] It is the world's largest international public lending institution.[4]


The European Investment Bank was founded when the Treaty of Rome came into force 1958, located in Brussels and with 66 employees.[5] In 1968 it was relocated to Luxembourg, where it remains. By 1999, it had more than 1,000 staff members, and more than 2,000 in 2012.

The total subscribed capital of the Bank was €232 billion in 2012.[6] The capital of the EIB was virtually doubled between 2007 and 2009 in response to the financial crisis. The EU heads of government agreed to increase paid-in capital by €10 billion in June 2012, with implementation expected in early 2013.

Early days

It was originally found to supply the new common free trade area, the European Economic Community, with regional development funds. After the atrocities of the Second World War, the old continent received a lot of interest from the new global elites, now focused on post-war reconstruction. The Messina Conference in 1955 was the starting point for the negotiations which then led to EIB’s institution.[7] In particular, during that conference, the idea of a common investment bank for development and cohesion in Europe came out of the Italian delegation, focused at that time on the economic development of the southern regions.[7] Indeed, it was a compelling idea also for France which was facing regional post-war reconstruction in some areas of the country at that time.[7] Moreover, the very idea of an investment Bank for development was not new in the global context. The EiB owes most of its architecture to the International Bank for reconstruction and development, instituted after the Bretton Woods Conference in 1944.[8] It was coherent with a certain global tendency in economic governance which John Ruggie famously called “embedded liberalism”, characterized by the proliferation of international economic institutions and funds having as a focus the regulation of capital flows and the integration of the world economy.[9] In the mid-1950s, during the talks on the Spaak Committee, basic disagreements over the role of the Bank in the new common market between 6 founding members of the later EEC delayed the negotiations:[10]

1. For the Federal Republic of Germany the fund had to have a commercial profile, such as investments with immediate economic returns.

2. On the other side there was Italy, then supported by Belgium and France, propending for long-term and guaranteed investments, with an initial base of liquid assets ensured. Additionally, interest rates had to be issued at preferential rates for the least developed regions.[11]

Finally, during the negotiations for the Treaty of Rome in 1957, the 6 countries agreed on a common vision for the Bank in the European common market, compelled by the urgency of coordinating their development and industrial policies in the new free trade area. The common vision of the Bank was written down in the Treaty of Rome Title IV art. 130:

The task of the European Investment Bank shall be to contribute, by having recourse to the capital market and utilising its own resources, to the balanced and steady development of the common market in the interest of the Community. For this purpose the Bank shall, operating on a non-profit-making basis, grant loans and give guarantees which facilitate the financing of the following projects in all sectors of the economy:

a) projects for developing less-developed regions;

b) projects for modernizing or converting undertakings or for developing fresh activities called for by the progressive establishment of the common market, where these projects are of such a size or nature that they cannot be entirely financed by the various means available in the individual Member States;

c) projects of common interest to the several Member States which are of such a size or nature that they cannot be entirely financed by the various means available in the individual Member States''Italic text.”

In the years 1958-1970 important infrastructure projects around Europe were financed by the Bank, contributing in a significant way to the integration of the European continent. Some examples can be the motorway linking Paris to Bruxelles; the railways connecting the Italian and French Alps and creating a direct link from Chambéry to Milan; the motorway linking the North and the South of Italy. Along with infrastructural interventions, this period is characterized by the financing of industrial conversion programs in many sectors such as metallurgical, electrical, chemical, etc. One example is the cooperation between France and Germany in the Saar-Lorraine industrial region.[12] There were also loans for the conversion of industries in the Food and Agricultural sector, from which Italy benefited through the Cassa per il Mezzogiorno. From a geographic perspective, the allocation of funds was hugely unbalanced towards Italy and some underdeveloped regions of France. Interestingly, the EIB’s first two Presidents were both Italian: in 1958 it was Pietro Campilli, in 1959 he resigned in favor of Paride Formentini which held the position until 1970. They came both from the Christian Democrats and had a long history of management into national financial and banking institutions.

EEC enlargement: from the 6 to the 10

The 60s is the decade when the negotiations for the EEC enlargement began, involving the UK, Ireland, Denmark, Norway and Greece. In 1972, the UK entered the Community, benefiting from 27% of the EIB grants.[13] The EEC enlargement process to the UK also involved the re-negotiations of the Yaoundé Convention into the Lomé Convention, with the aim to include the UK ex-colonial space. The EIB had a pivotal role in both the treaties because it was recognized as the institution providing development aid to the ACP countries.

Furthermore, with the enlargement, change in the structure of the Bank’s shareholder body became urgent and two main issues had to be discussed among the 10:

1. Capitalization and decision-making in the directive bodies of the Bank.

2. Independence of the Bank from Governments.[14]

The first point ended up in a discussion about the nature of loans, with Germany pushing for a more commercial-like statute in which loans are guaranteed in the financial market and the member states’ quotas are minimal. Differently from other European bodies, the decision had to be taken by a qualified majority and the veto power of one country could be neglected.[15] At the financial level, the reserves of the Bank had to be composed of both monetary and capital reserves and the financial activity was guaranteed both by Member States’ reserves and the private financial markets.[16] In this period most of the funds went into the European periphery, in particular Greece, Spain and Ireland, to support their integration.[13]

Another point that came along the enlargement process was that of the independence of the Bank: the more the EEC enlarged, the more the EIB needed to clarify its legal position towards Governments and the Commission.[15]

The 1970s economic crisis

In 1973 the Nixon shock had huge repercussions on the economy of European community and the European Investment Bank was not taken out of the picture. Firstly, the monetary crisis and the end of the Bretton Woods monetary system imposed a reform of the capitalization of the Bank. Initially, it was monetized in units of accounts, corresponding to gold or US dollars shared by 6 founding members of the ECC.[8] It is in this climate of exchange rate fluctuations that they established a proper European mechanism for exchange rates, through which the exchange rates of European currencies could be equated with each other. The crises of the so-called Snake in the tunnel brought European countries into the negotiations for the European Monetary System.[17] In this critical period the EIB, in order to guarantee its loans and avoid the risk of devaluation, decided to use the strongest currency in the Community for its transactions: the German mark.[18] In 1975 it was recognised that the currency competition in the European monetary market could endanger European integration, this is why the Bank adopted the European Unit of Account, a basket of currencies intended to minimize the risk of floating exchange rate. The EIB was the first institution to adopt it, so as to temporarily solve the problem of storing very different reserves with very different reserve values rivaling each other. Nonetheless, the risk of devaluations of the peripheral European countries' currencies was still very high, putting the EIB financial position at risk.[19] In fact, starting from Italy, then France, Ireland and the UK, european countries disengaged from the system and devalued their currencies, affecting all assets denominated in those currencies (EIB assets included).[19] In 1979 the European Currency Unit was adopted, working as an additional common currency and replacing the old system.

During this turbulent period the Bank was led by Yves Le Portz, who became the third EIB President in 1970. His main focus was to recover the European economy from the global economic crisis and his main strategy focused on new industrial loans in the energy sector and for small and medium-sized enterprises (SMEs). The first objective was a due answer to the oil shock caused by OPEC decision to higher oil prices per barrel. The second one was meant to support SMEs, seen now as the backbone of the economic community. The following speech taken in Strasbourg in 1983 can be a good representation of its overall vision:

Since the oil crisis the EIB has wanted to help the SMEs to rationalise their energy consumption. To this end, since 1979, global loans have been granted for small and medium-sized investments in industry with a view to promoting energy savings. Since November 1982 there has been a third, much more extensive, possibility for action. The New Community Instrument, or NCI, for which the EIB has been entrusted with the task of managing lending operations, can grant global loans for the investments of SMEs outside regions experiencing difficulties. Now SMEs throughout the Community have potential access to Community assistance, regardless of their location.[20]

The economic and monetary union

On the 7th of February 1992, the Maastricht Treaty was officially signed by the 12 member states. Under this treaty the EIB was conceived as something different from Central Banks, this is why it was not included in the European System of Central Banks and the European Central Bank (as stated in Title II, art. IV of the Maastricht Treaty). Nonetheless, art. 130 refers to the EIB as a common European financial institution and when in 1994 the European Investment Fund was born as an equity fund, the EIB evolved into the EIB Group (which can be paralleled to the World Bank Group). Indeed, the EIB Group was formed in 2000, comprising the EIB and the European Investment Fund (EIF), the EU's venture capital arm that provides finances and guarantees for small and medium enterprises (SMEs). The EIB is the EIF's majority shareholder, with 62% of the shares.[21]

With the outbreak of the 2008 financial crisis, the EIB was used as part of an EU-stimulus action plan, involving the financing of the riskier investment project in the Eurozone, most of them from peripheral regions. For example, the Vienna initiative[22] 2009 2012. From 2014 to 2020 the European Commission Investment Plan for Europe had the same nature, with a strong commitment for demonstrating the role of the EU Commission in solving the crisis.

In 2012, the EIB Institute was created, with the goal of promoting "European initiatives for the common good" in the European Union and candidate and potential candidate states, as well as the four EFTA states. For the fiscal year 2011, EIB lent €61 billion in various loan products, bringing total outstanding loans to €395 billion; one-third higher than at the end of 2008. Nearly 90% of these were with EU member states with the remainder dispersed between around 150 "partner countries" (in southern and eastern Europe, the Mediterranean region, Africa, Asia, Latin America, the Caribbean and the Pacific). The Bank uses its AAA credit rating to fund itself by raising equivalent amounts on the capital markets. The total subscribed capital of the Bank was €232 billion in 2012.[23] The capital of the EIB was virtually doubled between 2007 and 2009 in response to the financial crisis. The EU heads of government agreed to increase paid-in capital by €10 billion in June 2012, with implementation expected in early 2013.


The Bank's mission is to fund infrastructure projects in Europe. The bank favors Public-private partnership funding models.[24]

Although about 90 percent of projects financed by the EIB are based in the European Union, the bank does fund projects in about 150 other countries—neighbouring Southeastern European countries, Mediterranean partner countries, ACP countries, Asian and Latin American countries, the members of the Eastern Partnership, and formerly Russia.[25] According to the EIB, it works in these countries to implement the financial pillar of the Union's external cooperation and development policies by encouraging private sector development, infrastructure development, security of energy supply and environmental sustainability. EU state finance ministers have "called on all multilateral development banks, such as the World Bank and the Asian Development Bank, to phase out financing of fossil fuel projects."[26]

In the wake of the 2014 Russian military intervention in Ukraine, the EU Council instructed the EIB to suspend all new financing operations in Russia.[27]


The European Investment Bank is a double-hatted body of the European Union. Its structure is based on the interaction of four essential bodies.


The shareholders of the EIB are the 27 member states of the EU, while each state's share in the EIB's capital is based on the percentage of its economic weight in the Union (expressed in GDP) at the time of its accession.[28] There is no discrimination because all countries have access to the Bank's financing.[29] Shares of capital are as follows:[30]

State Capital (€ million) Capital (%)
Germany 46,722 19.21
France 46,722 19.21
Italy 46,722 19.21
Spain 28,033 11.52
Belgium 12,951 5.32
Netherlands 12,951 5.32
Sweden 8,591 3.53
Denmark 6,557 2.70
Austria 6,428 2.64
Poland 5,980 2.46
Finland 3,693 1.52
Greece 3,512 1.44
Portugal 2,263 0.93
Czechia 2,206 0.91
Hungary 2,087 0.86
Ireland 1,639 0.67
Romania 1,513 0.62
Croatia 1,062 0.44
Slovakia 751 0.31
Slovenia 697 0.29
Bulgaria 510 0.21
Lithuania 437 0.18
Luxembourg 327 0.13
Cyprus 321 0.13
Latvia 267 0.11
Estonia 206 0.08
Malta 122 0.05
Total 243.2 100

Statutory bodies

These are the Board of Governors, the Board of Directors and the Management Committee, which have the role of decision-making bodies.[31] The Management Committee is responsible for general control and is the Audit Committee.[31]

Control and Evaluation Committee

The third body is the Control and Evaluation Committee, which ensures the integrity of the Bank. This control is done internally and independently. The Bank's Statute has established several internal control bodies such as: Investigations, Audit Committee, Compliance, Financial Control, External Auditors, Internal Control, Operations Evaluation. In terms of independent control bodies, the Bank cooperates with the European Court of Auditors, OLAF and the European Ombudsman.[32]

Organisational structure

The final element that structures the European Investment Bank is the "Organisational Structure". It is composed of the following departments: General Secretariat, Legal Directorate, Central Services Directorate, Operations Directorate, Transaction Management and Restructuring Directorate, Finance Directorate, Projects Directorate, Risk Management Directorate, Inspectorate General, Compliance Directorate, Financial Control Directorate, Internal Audit Department. In multidisciplinary teams, the EIB staff generally prepares and implements the decisions of the Bank's governing bodies.[32]


The fact that the Bank is both a body of the European Union and a bank with a corporate character means that its governance is governed in both directions, by the principles of public governance and those of corporate governance. This governance is also based on three essential elements: decision-making structure, decision-making processes and related controls that are carried out by all the bank's bodies.

Composition and duration of the appointment of statutory bodies

In charge of the governance of the Bank, there are three decision-making bodies: the Board of Governors, composed of 27 finance ministers from each member state whose appointment does not depend on the functioning of the Bank but on the results of national elections; the Board of Directors consists of 28 Directors with a renewable 5-year mandate, one director for each member state and one nominated by the European Commission. In addition, there are 19 Alternate Directors.[33] Furthermore, in order to broaden the Board of Directors' professional expertise in certain fields relevant to the Bank's activities, the Board has made use of the possibility of co-opting six experts who participate in the Board meetings.[34] The last decision-making body is the Management Committee with one President and eight VicePresidents appointed by the Board of Governors for a 6 years renewable period.[35] The control body of the EIB is the Audit Committee, composed of six members and three observers which may be appointed by the Board of Governors for a 6 year non-renewable period, to assist the Committee.[35]

The Board of Governors holds a plenary meeting once a year, which may be convened by the Chairman, by one of its members or by the Board of Directors. The Board of Directors may meet up to 10 times during the year, while the Management Committee may meet weekly or whenever it is deemed necessary. The last statutory body, the Audit Committee, meets at regular intervals of 4 to 8 weeks.


As an independent body, the European Investment Bank makes its own borrowing and lending decisions. It cooperates with other EU institutions, in particular the European Commission, the European Parliament and the Council of the EU.

Decision-making in the Board of Governors is subject to the double majority principle.[35] In other words, it is necessary to obtain the favourable vote of the majority of Governors and the majority of the subscribed capital.

On the Board of Directors, decisions are also taken under the double majority principle: all the different directors are entitled to one vote, even though they are allowed to delegate to another director, in case of absence. This majority includes at least one third of the votes of the directors and at least 50% of the subscribed capital.[36]

Differently to the Board of Governors and the Board of Directors, decisions taken in the Management Committee are not subject to the double majority principle. When issuing proposals to the Board of Directors, it ensures that these decisions are taken in accordance with the majority vote of the nine members, all of whom are entitled to one vote.[36]

Similarly, decisions in the Audit Committee are taken by a simple majority , except for the statements on the annual accounts and the report on the results of its work during the preceding financial year, which have to be approved unanimously.[36]

The double majority in the Board of Governors and the Board of Directors ensures that the opinions of minority shareholders, that is smaller Member States with a little contribution to the Bank's capital, are taken into account. In practice many decisions are taken by consensus, which ensures that minority shareholders have an even greater influence.


EIB headquarters, West building

The headquarters is situated at 100 Boulevard Konrad Adenauer in Kirchberg, Luxembourg.[37] The building's first phase, now the West building, was designed by British architect Sir Denys Lasdun and is one of his few works outside the UK. An extension, the East building, was designed by Ingenhoven Architects, Düsseldorf. Covered by a glass roof that spans the entire structure, the extension adds 72,500 meters of office space.[38]

The EIB has offices in cities throughout the Union, including Athens, Berlin, Brussels, Bucharest, Fort-de-France, Martinique (one of France's overseas departments); Dublin, Helsinki, Lisbon, Ljubljana, Madrid, Paris, Rome, Sofia, Warsaw, Copenhagen, and Vienna.

In 2007, the EIB opened a regional office in Helsinki, located at the headquarters of the Nordic Investment Bank (NIB), with the aim of enhancing the Bank's presence in the Baltic Sea region.[39]

Outside of the EU, the bank has offices in Belgrade, Serbia; Bogotá, Colombia; Kyiv, Ukraine; Ankara, Turkey; Beijing, China; Cairo, Egypt; Dakar, Senegal; Istanbul, Turkey; Nairobi, Kenya; Pretoria, South Africa; Rabat, Morocco; Sydney, Australia; and Tunis, Tunisia and Tbilisi, Georgia.[40]


The EIB president is the head of the Management Committee, a nine-member executive body that is responsible for the day-to-day operations of the EIB. They are "appointed by the EIB's Board of Governors, on a proposal from the board of directors", for a renewable six-year term. The President is also the chair of the board of directors.[41] The other eight members are vice-presidents.[42]

  • Pietro Campilli (Italy): February 1958 – May 1959
  • Paride Formentini (Italy): June 1959 – September 1970
  • Yves Le Portz (France): September 1970 – July 1984
  • Ernst-Günther Bröder (Germany): August 1984 – March 1993
  • Sir Brian Unwin (UK): April 1993 – December 1999
  • Philippe Maystadt (Belgium): March 2000 – December 2011
  • Werner Hoyer (Germany): January 2012 – present[43]

The intergovernmental nature and evolution of the relations with National Development Banks (NDBs)

The governance of the EIB is closely tied with Member States. Indeed, the main shareholders are the Member States and both the Board of governors and the Board of Directors are composed of Member States’ representatives. Since its creation in 1958, the European Investment Bank is closely tied both with Member States and with National Development Banks. Indeed, “the EIB’s relation to other banks, particularly NDBs, is not less important than its relations to other EU decision-making bodies”.[44] Starting with a strong intergovernmental governance and structure, the European Investment Bank has evolved since its creation. Even if its governance largely remains intergovernmental, its operations are more and more linked to a European Strategy.

“The institutionalisation and relative stability”[45]

From the beginning, the European Investment Bank has been designed as an intergovernmental body. Indeed, the creation of the EIB has been the result of intergovernmental bargaining between Germany and the Benelux who advocated for a private bank, financed independently from Member States and France and Italy who pushed for a State-owned Bank. Though, the board of governors was composed of national finance ministers and the board of directors was composed of Member States representatives, each State having one vote. Therefore, Member States are dominating the process and “first, the EIB was mainly a member state bank and its relations to the E[uropean] C[ommission] rather muted”.[46]

The first three decades of the Bank, characterized as the institutionalization period, aimed at finding an equilibrium. Indeed, the EIB has been created to serve the Community goals but was governed by Member States. Interestingly, the six founding Members of the Community also developed their own national development banks. During this first period, relations between the EIB and NDBs were weak and mainly based on competition, mostly with the KfW (German NDB), then biggest NDB and competitors in size with the EIB. Looking at the first board of directors, we can see that the EIB was governed by national interests, following an intergovernmental logic. In 1958, among the first members of the Board of Directors was Herbert Martini, Member of the Management Committee of the KreditAnstalt für Wideraufbau, the German NDB. We could also find Jean Paul Delcourt, then Head of the financing Department at the Commissariat Général au Plan. The presence of such people shows the intergovernmental logic driving the governance of the EIB. On the contrary, only one member, Jean Rey, came from the European Commission.[47] As it was the case between the European Court of Justice and the German Constitutional Court, relations were tense between the EIB and the KfW. Even though the EIB tried to establish cooperative relationships, the competitive dimension was too powerful as both banks competed for funds and projects. and the EIB.[48]

The period of increasing relations with NDBs

The Treaty of Maastricht and the German reunification changed the nature of the relations between the EIB and its main competitor, the German NDB. It led, in May 2000, to the opening of an EIB office in Berlin.[49] The German reunification and the end of the cold war led to a major increase of EIB lending to Germany. Indeed, it has been multiplied by six in around 10 years, making Germany the biggest recipient of funds, getting approximately, “18% of the Bank’s aggregate financing”.[49] Several factors can help to explain why EIB funds became more important in Germany, the most important one probably being the German reunification and the nature of new German Länder. Indeed, all these Länder were qualified as Objective 1 regions under the EU’s Regional Policy. The EIB has really contributed to modernise infrastructure and helped to the economic development of the regions.[49]

This period was of increasing importance for the EIB, through which structural funds were channelled. The importance of the EIB increased from 2007 onwards as the creation of financial instruments led to increasing relations between the EIB, the European Commission and NDBs.[50]

“Promotional banking and network formation”[51]

This second period paved the way for intensified relations between EIB and NDBs. This relations further increased in the last decade, which resulted in this period being labeled as times of “promotional banking [and] network formation”.[51]

It has been made possible with the restructuring of the European financial environment after the 2008 economic crisis as National Development Banks were directly involved through European financial instruments such as the Risk Sharing Finance Facility (RSFF[52]) or Jeremie.[53][54] It therefore led to new interactions between the different institutions and organs involved.

Strategies Outside the Union

The European Investment Bank is continuously seeking to boost its relations with the rest of the world through the promotion of selected lending projects.

When dealing with Non-EU countries, the EIB strategy has a wide range of objectives intended to work specifically on economic convergence through the development of local economic and social infrastructures.[55] The EIB-supported projects also aim to build long-term resilience of Small and medium-sized enterprises (SMEs) and promote regional integration, without neglecting convergence on economic and environmental criteria to minimize climate change.

The EIB carries on its activities on multi-faceted frameworks that include different countries. When making loans outside the EU, the bank has lending mandates based on EU external cooperation and development policies, which differ from region to region:

  1. Pre-Accession: Candidate and Potential Candidate countries in the Enlargement region (states which could possibly join the EU)
  2. European Neighbourhood: Mediterranean Neighbourhood / Russia and Eastern Neighbours
  3. Development: African, Caribbean and Pacific Group of States (ACP)/ Republic of South Africa
  4. Economic Cooperation: Asian Latin Americans countries(ALA).

In this regard, the Bank relies on three valuable instruments: the External Lending Mandate (ELM), the ACP-EU Cotonou Mandate, and its Own Risk Facilities (ORF).[55][56]

The EIB does not only operate through lending projects but also makes use of equity investments. Moreover, it has become increasingly important for the Bank to channel additional funds provided by external donors into its own projects. This is to ensure greater sustainability and quality of EIB loans.[57]

By strengthening its commitment outside the EU, the EIB thus contributes to the EU External action and enhances its relations with the Commission by making frequent use of EU Blending facilities.[57]

Climate policies

With the implementation of the 2015 Climate Strategy, the European Investment Bank (EIB) initiated an environment-friendly transition through a selection of qualitative and quantitative lending strategies aimed at tackling pollution.

Following the Paris Agreement, the European Investment Bank has strived to align its financial flows and interests to the approach developed by COP 21 in Paris. Indeed, differently from other financial institutions, the Bank increased its level of green ambitions aiming at progressive fossil fuels divestment.[58] As a consequence, the Bank has undertaken to progressively incorporate new priorities and goals in the 2019 Energy Lending Policy,[58] thus expanding its own portfolio by:

  • Aligning activities to Paris Agreement Standards by the end of 2020;
  • Dedicating at least 50% of investments to climate action operations starting from 2025;
  • Calculating estimated support of 1 trillion Euros for green projects during the period from 2021 to 2030;
  • Eliminating all forms of investment in fossil fuels projects by the beginning of 2022.[59]

Equally important is the collaboration between the EIB and EU Member States, especially in those countries whose economy is largely fossil fuels dependent. For those, the EIB has developed a new financial framework (Energy Transition Package) specifically intended to modernize national economies through ad-hoc plans that would ease energy transitions away from fossil fuels.[60] Today, the need for a greener EU finance has been incorporated into the agenda of Governments and EU’s financial institutions such as the European Central Bank (ECB), the European Investment Bank (EIB), and the European Bank for Reconstruction and Development (EBRD).[61] However, the EIB autonomously operates the majority of EU Climate finance both within and outside the EU.[62] With the introduction of the European Green Deal, the EIB plan to achieve EU green goals comes through a multi-faceted commitment in renewing the environment and energy sector, therefore widening the Bank‘s contribution to the EU’s ambitious plan towards climate neutrality.[63][64] Accordingly, the European Green Deal Investment Plan (EGDIP) has attributed the Bank a key role in bolstering EU Green Deal’s goals. As such, EIB’s contribution includes:

  • Financial activities which take the form of quantitative lending operations, including the possibility to invest in high-risk projects;
  • Non-financial activities which mainly provide technical assistance to implement projects and raise EU green standards.[58][65]

Such Green investments have a double purpose: on the one hand, help the EIB mitigating all forms of pollution; on the other hand, encourage the Bank to end progressively all its dirty lending by the end of 2021.[66] The realization of these goals takes place through direct and indirect lending instruments, most commonly through long-term loans, guarantees, investment loans, and equity.[60][62][63] Moreover, careful scrutiny through “the three pillar assessment” (3PA) allows the EIB to prioritize specific green projects. High emphasis will be placed on:

  • energy efficiency investments;
  • decarbonize the energy supply;
  • clean energy innovation;
  • enabling activities.[60][63]

Development banking

The European investment bank can be referred to as the EU’s ‘Multilateral Development Bank’ (MDB).[67] Effectively, the EIB was founded by sovereign states (the ‘Six’ original member states of the EU), which are today the bank’s shareholders along with the 21 other member states. Based on the bank’s volume of borrowing and lending, the EIB is often considered as the largest MDB worldwide.[68]

As a development bank, the EIB’s role is to fund projects dedicated to the development of specific sectors across the EU. For example, the three main sectors in which the bank has invested are the credit lines, transport and energy sectors, which together account for close to two thirds of the EIB’s total investments.[69] The investment patterns of the EIB and its apparent preference for certain specific sectors such as the transport or industry sectors have led commentators to depict the EIB as prioritising development and European integration rather than focusing primarily on easing capital access like most international financial institutions do.[70]

Additionally, the EIB funds numerous projects in more than a hundred non-EU countries. In this sense, between 2010 and 2020, the EIB’s total financing outside of the Union’s borders totalled 78 billion euros, out of which 26.6 billion were directed towards Africa. Outside of the Union, the EIB funds projects that are linked to the specific needs and conditions of the recipient countries. In 2019, the EIB started to invest in 108 additional projects for a total of 7.8 billion euros.[71] The projects financed can be grouped under four main categories of investments: social and economic infrastructure (€5.5 bn), private sector development (€2.3 bn), climate change mitigation and adaptation (€3.2 bn) and regional integration (€1.3 bn).[72] All of the projects in which the EIB invests or has invested in the past can be found on the bank’s website.

In the aftermath of the 2008 financial crisis, the EIB and the National Development Banks (NDBs) of the EU’s member states have seen their balance sheets increased significantly (for example, the EIB saw its assets grow by 100 per cent and the Finnish Finnvera by 275 per cent).[73] The reinforcement of such institutions have generally been welcomed across the Union given their recovery and counter-cyclical functions. This strengthening of the EIB and of the various NDBs can be understood as a desire to establish a so-called ‘European Investment state’ that would have as an objective to compensate for the lack of fiscal coordination and transfers at the EU level.[73]

Active projects


In 2016, Transparency International rewired the European Investment Bank on three important issues. The report stated that the importance and status of EIB implied that the latter should attain the highest standards in terms of transparency, accountability and integrity.[74] Another report made in 2016 by CEE Bankwatch Network, criticized EIB for not being transparent enough in the projects which it funded outside of the EU.[75]


In its report, Transparency International argued firstly that, with regards to integrity, senior managers had too much discretion which could lead to favour proposals for investments which would benefit their home country.[74] The integrity rules of the Board of Directors establish that any conflict of interests are to be prevented by the publication of the meeting’s minutes on the EIB’s website. The Management Committee however does not have to publish its minutes. This body is responsible for various daily activities of the Bank and Transparency International holds that they should publish their minutes.


The EIB is accountable to various actors. It is accountable mainly to its shareholders, which are the member states. Through the years, the Bank has taken a bigger role in the European Union and is now accountable to the European Commission, the European Court of Justice and the European Ombudsman trough Complaints Mechanism.[76] With regards to accountability, the Transparency International report stated that given the official internal structure of the EIB, the final decision that is made on the projects should be taken by the Board of Directors, which are usually high level officials from member states.[74] They meet ten times a year, implying there is a possibility that the final projects do not enjoy the attention they deserve.[74]


The European Investment Bank has to follow regulations and laws of the European Union and international organizations. The rules regarding transparency can be found in the Treaty on the Functioning of the European Union, more specifically under Article 15 TFEU. There are also specific regulations concerning the right to access information. Other rules for transparency and rights to access documents of the institutions and bodies can be found in Article 42 of the Charter of Fundamental Rights of European Union. According to the Aarhus Convention, which sets a legal framework for environmental information, the EIB has an obligation to publish the environment-related information about both approved and not approved projects.[77] This has also been confirmed by European Court of Justice in what has been called a landmark case.[78] In January 2019, an environmental law charity called ClientEarth made a case against the EIB in front of the ECJ. This case concerned the refusal by the EIB to finance a green project in Northern Spain.[79] When the ClientEarth asked the EIB to review its decision, the EIB refused to do so arguing that the request was inadmissible.[78] The ECJ gave its judgment in January 2021. In this judgment it sided with ClientEarth and stated that EIB has to follow the transparency rules set by European Law.[80]

Additionally, environmentalists and supporters of the “de-growth” thesis in economic development are currently putting forward sound criticisms to the “green finance” initiative of the European institutions, EIB included. What they believe is that it is impossible to have sustainable growth without putting current economic growth paradigms into question. According to them, without re-thinking the whole industrial sector, it might not be enough to stop carbon emissions.[81]

Controversial projects

There are a few projects financed or under the appraisal procedure by the EIB that have raised objections from local communities as well as international and national NGOs.[82][83] Such projects include the M10 motorway in Russia,[84] the Gazela Bridge in Serbia,[85] Rača Bridge between Serbia and Bosnia and Herzegovina,[citation needed] the D1 motorway in the Slovakia, Šoštanj Power Plant in Slovenia,[86] the Bujagali Hydroelectric Power Station in Uganda,[87] the Nenskra Hydropower Plant in Georgia,[88][89] the Trans Adriatic Pipeline transporting natural gas from Azerbaijan to Europe starting from Greece, through Albania to Italy,[90] the Volkswagen emissions scandal also known as Dieselgate,[91] the Mombasa-Mariakani road project in Kenya,[92] the Olkaria geothermal development in Kenya,[93] the Vinca incinerator in Belgrade, Serbia.[94][95][96]

See also

Notes and references

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  8. ^ a b RICHARD R. DILLENBECK, THE EUROPEAN INVESTMENT BANK, The Business Lawyer , Vol. 17, No. 3 (April 1962), pp. 568-583
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  10. ^ Éric Bussière, Michel Dumoulin and Émilie Willaert, in collaboration with Charles Barthel, Jürgen Elvert, Paolo Tedeschi and Arthe Van Laer, The Bank of the European Union. The EIB, 1958-2008, Imprimerie centrale, société anonyme, Luxembourg, 2008, pag. 36
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