European Investment Bank

The European Investment Bank (EIB) was created in 1957 to serve as the European Union’s long-term financing arm. Its operations focus on supporting economic and social cohesion within the European Union (EU). It is non-profit-making and is financed through borrowing on the financial markets and by contributions by its shareholders—the EU member states. They subscribe jointly to the bank, each country’s contribution reflecting its economic weight within the Union. On May 1, 2004, 10 new EU member states joined the EIB as shareholders^[1], and EIB’s capital subscription rose to € 163.6 billion. 

The EIB Group consists of the European Investment Bank and the European Investment Fund (EIF). The EIF specializes in venture capital and guarantees for small and medium enterprises and participations financing in the new technology sector. The EIB is the EIF’s majority shareholder. Other shareholders include the EU, represented by the Commission, and some 20 EU banking institutions.

The EIB has AAA credit rating. In 2004, total lending reached euro;43.2 billion (2003: €42.3 billion). Financing in the EU-25 member states totalled €39.7 billion (of which €3.8 billion in the ten new member states), and € 3.5 billion was made available to non-EU countries. EIB lending in accession countries (Romania and Bulgaria) amounted to €119 million. In the Western Balkan countries the EIB provided financing worth €461 million Lending in support of EU development policy totalled €2.9 billion. About €2.2 billion in loans were made available under the EIB’s ‘Facility for Euro-Mediterranean Investment and Partnership’ (FEMIP); €440 million went to the EU’s ACP partner countries, €100 million to South Africa, and €233 million to Asia and Latin America.

European Investment Bank and World Bank Cooperation

 

Over the past few years, relations between the World Bank and the EIB have evolved from ad hoc cooperation towards operational partnerships, with particular emphasis on Central and Eastern Europe and in the southern Meditearranean regions.

 

A series of meetings between the institutions’ senior management provided impetus for strengthening collaboration. In 2004, the World Bank, European Commission and EIB signed a Memorandum of Understanding for a ‘Strategic Partnership in the Middle East and North Africa Region’.  Also in 2004, the EIB and the World Bank signed a Memorandum of Understanding for cooperation on the establishment of a Pan-European Carbon Fund.