Investment Plan for Europe to support renewable energy projects

The European Investment Bank (EIB) has approved more that €8 billion (US$8.98 billion) of financing for energy efficiency, renewable energy, and strategic energy infrastructure.

The EIB Group’s Board of Directors approved loans for a total of 21 projects, including four projects earmarked, subject to agreement by the European Commission, for support from an EU budget guarantee under the European Fund for Strategic Investments (EFSI) once it is formally established. Approval by the board represents a key milestone prior to final negotiation of the loans.

The four projects earmarked for financing under EFSI include:

• A project to support energy efficiency investment in France that will enable renovation work to cut energy bills in more than 40,000 homes.
• Backing for energy investment across northern and western Europe, through equity participation in a specialised fund, will support investment in a range of energy schemes, including construction of new offshore wind farms, biomass facilities, and energy transmission links that will help cut carbon emissions and create thousands of jobs.
• The financing approved by the EIB board for a new large scale pulp mill in Finland will allow the plant to be self-sufficient using renewable energy.
• New investment in the Spanish gas distribution network will for the first time give consumers in some areas the choice of using natural gas, a cleaner and cheaper alternative to fuel oil.

Other lending, agreed in principle by the board of Europe’s long-term lending institution, includes backing for a modernisation of a regional hospital in Austria, support for sustainable investment by local authorities in Spain and Hungary, upgrading urban infrastructure in Ukraine, and improving key road links in Honduras.

Lending under EFSI is expected to be backed by a core endowment of €21 billion, comprising €5 billion from the European Investment Bank and a €16 billion guarantee from the EU. This initial capital will strengthen capital market borrowing and onward lending capacity by the European Investment Bank, the world’s largest multilateral borrower and lender, mobilising €315 billion of additional investment in Europe over three years.

Earmarking projects for EFSI support reflects the EIB Group’s response to calls by Governments, the European Parliament, and the Commission, for swift implementation of the Investment Plan for Europe, even before the EFSI fund is formally established within the EIB Group. Once final loan details are concluded, the EIB Group is committed to supporting projects earmarked for financing under EFSI on its balance sheet even if the EU guarantee should be found not to apply.

Werner Hoyer, European Investment Bank Group President, stated:

“The EIB Group is moving fast in rolling out the Investment Plan for Europe, as requested by Governments, the European Parliament, and the Commission when the Plan was launched. Investment in renewable energy and measures to cut energy bills are urgently needed. The projects approved by the EIB this week also reflect the EU Bank’s focus on climate action. EFSI will allow us to do more of the good work the EIB has done in the past unlocking investment needed to reduce energy use and cut emissions. Projects earmarked today for EFSI guarantee support complement the EIB Group’s support for projects in innovation, social infrastructure, and SME funding beyond EFSI as part of its ordinary activity. The EIB Group’s support for the EU’s economy remains substantial and consistent, and the Investment Plan for Europe builds upon that support.”