EIB reviews financing targets for energy sector

October 30, 2006

Luxembourg, 26 October 2006

The European Investment Bank has completed a review of its financing targets for energy projects that help to implement the relevant EU policies.

The Bank will focus on five target areas: large projects; energy efficiency; renewable energies; R& D for energy and cooperation on energy outside the EU.

EIB energy lending as percentage of its total lending in the EU declined from 23% in the 1980's to 9% in the period 2000-2005. The outcome reflects the pattern of energy investment in the EU. The EIB financed about 5% of the investments by the energy sector in the EU, at an annual average of some EUR 3.3. billion in the past five years. Outside the EU financing of energy projects represents a larger part of EIB financing in those countries.

The reprioritization of energy in the Bank's activities reflects EU policy on climate change and the renewed tensions in the oil market. According to the new strategy for the EIB Group, the Bank's role in the EU should evolve from a universal provider of funds to become a flexible partner acting with more tailor-made products adapted to local market circumstances and to the needs of the counterparts.

In partner countries outside the EU, the objective is to better serve the development objectives by putting more emphasis on country and other sector intervention strategies that may involve more risk-taking, coupled with greater availability of subsidies and closer cooperation with all relevant actors.

1. Financing for large energy projects will focus on those with the highest EU priority. Support will go in particular to projects enhancing the security of energy supply and the internal market, including notably priority TENs.

2. The energy efficiency target areas include financing energy efficiency investment programmes, combined heat and power as well as district heating. In addition, it will explore with promoters possibilities to develop the energy efficiency potential of their projects financed by the Bank.

3. In renewable energy the EIB aims at the existing financing targets (average annual financing is above EUR 500 million). Additionally, emphasis will be on developing the less mature renewable markets, both within and outside in the EU, on the underdeveloped renewables (particularly biomass), and on new technologies.

4. R&D for energy will increase under the existing (i2i) policy for a knowledge-based economy. New risk sharing financial instruments will be developed for this type of projects. The EIB Group will seek complementarity between the EU's 7th Framework Programme for Research and its i2i, and it will support the European Technology Platforms as well as the research infrastructure for energy.

5. In partner and neighboring countries efforts will go towards a pan-European Energy Community with Neighboring Countries to better integrate energy markets. The EIB will also support new energy import routes and projects enhancing energy supply. In developing countries the EIB will seek to increase access to modern sources of energy and to further sustainable energy solutions, favoring in particular the emergence of low-carbon economies.

Complete text of the "EIB Energy Review"

European Investment Bank
News release 2006-115
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