The European Investment Bank

The European Investment Bank (EIB) was set up in 1958 by the Treaty of Rome as the long-term lending Bank of the European Union. The EIB lends money to the public and private sectors for projects of European interest, such as:

• Cohesion and convergence of EU regions
• Support for small and medium-sized enterprises
• Environmental schemes
• Research, development and innovation
• Transport
• Energy

The EIB is active in the EU and in some 140 countries worldwide with which the EU has a Cooperation agreement.

Philippe Maystadt, from Belgium, became President of the EIB on 1 January 2000.

What does the Bank do?

The EIB is a non-profit, policy driven bank. Unlike commercial banks, the EIB does not manage personal bank accounts, conduct over-the-counter transactions or provide private investment advice. The EIB makes long-term loans for capital investment projects (mainly fixed assets) but does not provide grants.

The EIB is owned by the Member States of the European Union. They subscribe jointly to its capital, each country’s contribution reflecting its economic weight within the Union. The EIB does not use any funds from the EU budget. Instead, it is self-financing, borrowing on the financial markets

Because the EU Member States are the EIB’s shareholders, it carries the highest possible credit rating (AAA) on the money markets. As a result, the EIB can raise large amounts of capital on very competitive terms. As the EIB is not-for –profit, its lending conditions are equally favourable. The EIB cannot however lend anymore than 50% of the total cost of an individual project.

The projects the Bank invests in are carefully selected according to the following criteria:

• they must help achieve EU objectives;

• they must be economically, financially, technically and environmentally sound;

• they should help attract other sources of funding.

The EIB also supports sustainable development in the candidate and potential candidate countries, in EU neighbour countries to the south and to the east, and in partner countries elsewhere.

The EIB is the majority shareholder in the European Investment Fund.

How is the Bank's work organised?

The EIB is an autonomous institution. It makes its own borrowing and lending decisions purely on the merits of each project and the opportunities offered by the financial markets. As a transparent institution, the Bank reports widely on all its activities.

The EIB maintains close working ties with the family of EU institutions in pursuit of the Community’s objectives. Most notably, the Bank is represented at a number of committees of the European Parliament, and the Ecofin Council of Ministers.

The Bank’s decisions are taken by the following statutory bodies:

• The Board of Governors consists of ministers (normally the Finance Ministers) from all the EU Member States. It defines the Bank’s general lending policy, approves the balance sheet and annual report, authorises the Bank to fund projects outside the EU and decides on capital increases.

• The Board of Directors approves lending and borrowing operations and ensures the proper management of the EIB. It consists of 28 Directors – one nominated by each EU Member State and one by the European Commission.

• The Management Committee is the Bank’s full-time executive. It handles the EIB’s day-to-day business and it has nine members.

• The Audit Committee is an independent body answerable directly to the Board of Governors and responsible for verifying that the operations of the Bank have been conducted and its books kept in a proper manner.