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The Statute of the European Investment Bank (EIB)

This Statute lays down the operational rules of the European Investment Bank (EIB), the European Union's financing institution. The EIB, which was set up in 1958 under the Treaty of Rome, contributes to the achievement of the Union's objectives by financing investment projects that encourage European integration, balanced development, economic and social cohesion and an innovative knowledge-based economy.

ACT

Protocol on the statutes of the European Investment Bank (EIB) annexed to the Treaty on European Union and the Treaty on the Functioning of the EU.

SUMMARY

This Protocol establishes the composition and missions of the European Investment Bank. The EIB has legal personality, financial autonomy and its own decision-making structure. Its mission is to contribute to the development of the European Union’s (EU) internal market. It grants loans or guarantees in order to facilitate the financing of projects in all sectors of the economy.

GENERAL PROVISIONS

Seat, members and capital

The seat of the EIB is in Luxembourg. Furthermore, the members of the EIB are the 27 Member States of the Union and its capital has increased to EUR 232.3 billion. All the Member States jointly subscribe to the capital. The contribution of each Member State of the Union is calculated in accordance with its economic weight (expressed in GDP) at the time of its accession. Moreover, the accession of a new State to the EU leads to an increase in capital. Furthermore, the Board of Governors may decide unanimously to increase the subscribed capital.

ADMINISTRATIVE BODIES

Board of Governors

The Board of Governors consists of Ministers designated by the Member States (usually Finance Ministers). The Board of Governors is the principal decision-making body of the EIB. It lays down guidelines for the bank and takes the most important decisions.

The Board of Governors performs the following roles:

  • it lays down the credit policy guidelines for the bank;
  • it can decide whether to increase the Bank's capital;
  • it exercises the powers of appointment and compulsory retirement of members of the Board of Directors and of the Management Committee;
  • it approves the annual report, balance sheet and profit and loss account at its annual meeting;
  • it authorises the Bank to finance projects outside the EU;
  • it may, acting unanimously, take any decisions concerning the suspension of the operation of the bank. It may also suspend the granting of loans or guarantees to a Member State or its nationals if the Members State in question fails to meet its obligations;
  • it approves the rules of procedure of the Bank.

Board of Directors

The Board of Directors is chaired by the President of the Bank and consists of 28 directors and 18 alternate directors appointed by the Board of Governors. They are appointed for a renewable period of five years. Each Member State and the Commission nominates one Director from persons whose independence and competence are beyond doubt.

The Board of Directors manages the finance granted by the EIB. It also performs the following roles:

  • it has sole power to take decisions in respect of granting loans and guarantees and raising loans;
  • it fixes the interest rate on loans granted and the commission on guarantees;
  • it sees that the EIB is properly run in accordance with the provisions of the Treaties and the general directives adopted by the Board of Governors.

So as to widen the professional expertise available to it in certain fields, the Board of Directors may co-opt a maximum of six experts to sit on the Board on an advisory basis, without the right to vote.

Management Committee

The Management Committee is the Bank's full-time executive. It consists of a President and eight Vice-Presidents appointed for a period of six years by the Board of Governors on a proposal from the Board of Directors. Their appointments are renewable. The Board of Governors, acting unanimously, may change the number of members on the Management Committee.

The Management Committee performs the following roles:

  • it is responsible for the current business of the EIB, under the authority of the President and the supervision of the Board of Directors;
  • it prepares the decisions of the Board of Directors and ensures that these decisions are implemented;
  • it acts by majority when delivering opinions on proposals for raising loans or granting loans and guarantees.

Audit Committee

The Audit Committee comprises six members appointed by the Board of Governors. It is an independent body answerable directly to the Board of Governors and responsible for verifying that the operations of the EIB have been conducted, and its books kept, in a proper manner.
It reports to the Board of Governors and, at the time of approval by the Governors of the Annual Report of the Board of Directors, issues a statement on the audits carried out.

OBJECTIVES AND OPERATION

Missions

In carrying out its task, the Bank grants loans to Member States or to private or public undertakings for investment projects to be carried out in the European territories of Member States. By way of derogation, the EIB may grant loans for projects to be carried out, in whole or in part, outside the European territories of Member States.

The financed projects may, for example, promote the development of the least-favoured regions, contribute towards modernising or reorganising companies, or they may be large-scale joint projects between several Member States.

As far as possible, loans are granted only on condition that other sources of finance are also used (this acts as a catalyst to encourage other banks to provide funding).

The Bank may also guarantee loans contracted by public or private undertakings or other bodies.

Interest rates on loans and commission on guarantees must be adjusted to conditions prevailing on the capital market and enable the Bank to cover its expenses and to build up a reserve fund. This reserve fund must be built up progressively to 10 % of the subscribed capital.

Principles to be observed in granting loans

The EIB must ensure that its funds are employed as rationally as possible in the interests of the EU.

It may neither acquire any interest in an undertaking nor assume any responsibility in its management unless this is required to safeguard the rights of the Bank in ensuring recovery of funds lent.

Neither the Bank nor the Member States may impose conditions requiring funds lent by the Bank to be spent within a specified Member State. The Bank may not finance, in whole or in part, any project opposed by the Member State in whose territory it is to be carried out.

How to apply for a loan

Applications for loans or guarantees may be made to the Bank either through the Commission or through the Member State in whose territory the project will be carried out. An undertaking may also apply direct to the Bank for a loan or guarantee.

Applications made through the Commission are submitted for an opinion to the Member State and vice versa. Applications made direct by an undertaking are submitted to the Commission and to the Member State.

The Management Committee examines whether applications for loans or guarantees are compliant. To receive its support, projects and programmes must be viable in four essential areas: economic, technical, environmental and financial. All investment projects are carefully assessed and monitored until completion.

Where the Management Committee is in favour of granting a loan or guarantee, it submits the draft contract to the Board of Directors for a decision.

Where the Management Committee delivers an unfavourable opinion, the Board of Directors may not grant a loan unless its decision is unanimous.

Where the Commission delivers an unfavourable opinion, the Board of Directors may not grant a loan unless its decision is unanimous, the director nominated by the Commission abstaining.

Where both the Management Committee and the Commission deliver an unfavourable opinion, the Board of Directors may not grant the loan or guarantee in question.

Operations on the capital markets

As part of its activities, the EIB is authorised to carry out operations on the capital markets. It may:

  • borrow on the capital markets the funds necessary for the performance of its tasks;
  • buy and sell securities on the financial markets;
  • invest on the money markets.

European Investment Fund (EIF)

The Protocol authorises the EIB to establish subsidiaries or other entities, which shall have legal personality and financial autonomy. The statutes of these organisations shall be adopted unanimously by the Board of Governors.

The EIB created the European Investment Fund in 1994. The EIF is part of the ‘EIB group’. In particular, its mission is to provide venture capital to small and medium-sized enterprises. Moreover, the EIB shall be entitled to participate in the management of the EIF and contribute to its subscribed capital up to the amount determined by the Board of Governors.

REFERENCES

ActEntry into forceTransposition in the Member StatesOfficial Journal

Protocol No 5 on the Statute of the European Investment Bank

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Official Journal C 83 of 30.3.2010

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.

 
Last updated: 15.01.2011
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