European Investment Bank investing for development?

1. European Investment Bankinvesting for development? The HUB 2. 12. 2010, Praha

2. What is the EIB EIB and it's role in development The work of the Counterbalance coalition

3. Who are we? The Counterbalance coalition is composed of environmental and development NGOs from several European countries A watchdog coalition

4. What is the EIB?

5. The basics The EIB was founded in 1957 under the treaty of Rome Currentrly, it is one of the largestinternational public financial institution Initially it was funded through “subscribed capital”, but now raises most of its funds on global debt markets (AAA rated)

6. Who decides ... The voting power of states is derived from the amount of subscribed capital, but ... There is a tendency to take decisions by consensus. Board of governors Board of directors Management committee

7. The EIB and the global South

8. EIB outside of the EU (1) The EIB operates outside of the EU under so called mandates, which set priorities for the EIB lending provide community guarantees There is a significant number ofcompeting expectations from the EIB lending – highly politicised objectives

9. EIB outside of the EU (2) ACP countries are covered under the agreement from Cotonou Development objectives from the very beginning The rest (ALA, candidate countries, Mediterranean, south Caucasus and Russia) The present mandate sets out different objectives for each region

10. EIB outside of the EU (3) Neighbourhood countr.: up to EUR 12,4 bln. Asia and Latin America: up to EUR 3,8 bln. energy security of the EU, economic co-operation through direct investment Mediterranean: up to EUR 8,7 bln. Priority for energy investment and large infrastructure

11. The winds of change “Wise person's panel”which stared as a mid-term review of the ELM Decision of the ECJ on the 6thof November 2008 Refusal of the EPto rubber-stamp the present mandate. The EP insisted on preparation of a new one. CRISIS

12. The EIB and types of lending

13. Safety? Efficiency first!

14. Types of lending (1) Traditionally, the main focus of the Bank was on projects Environmental and social impacts assessment weaker than in many other IFIs Very weak or no ex-post evaluation Often questionable value added

15. Types of lending (2) Growing attention is focused on financial intermediaries (global loans, private equity) “Black box” effect No clarity on either disbursementor performance Assessment of the projects delegatedto the intermediary institution

16. One example for all - Zambia EIB has been lending in the country since 1978 Sectors funded in the last 32 years restricted to 4; Industry (largely mining), Credit Lines, Energy and Services No lending to other industriessuch as agriculture, infrastructure, health, education, telecommunications, transport, water or sewage No lending at all by the EIB since end of 2008

17. EIB in Zambia (2)

18. EIB in Zambia since 2003 (3) 3 credit lines– c. €54 million 4 separate mines(3 copper & one nickel) Kansanshi, Mopani, Lumwana & Munali. c. €196 million 1 energy- Zesco Kariba North, €7.6 million No others

19. Thank you for your attention. Isabella Besedova & Martin Krylmartin.kryl@hnutiduha.cz