EIB’s New Fund Includes Offshore Wind Farms
New investment in energy efficiency, renewable energy, and strategic energy infrastructure, was among the more than EUR 8 billion of financing approved by the European Investment Bank board meeting on May 19.
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 backing for energy efficiency investment to reduce heating bills of private homes in France; new renewable energy and related transmission links in northern and western Europe; reduction of industrial energy use in Finland; and improvement to gas transmission in Spain. The project to support energy efficiency investment in France 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 EUR 21 billion, comprising EUR 5 billion from the European Investment Bank and a EUR 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 EUR 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.