The European Investment Bank is the lending arm of the European Union. It is the biggest multilateral financial institution in the world and one of the largest providers of climate finance. The EIB helps the economy, create jobs, promote equality and improve lives both for EU citizens and for people in developing and emerging countries. In India, and in Asia more generally, EIB clients are primarily governments, policy banks and state-owned companies, and in some cases commercial banks and businesses.
The EU's CLIMATE ACTION BANK
Climate change is one of the greatest global challenges of its time. Immediate and coordinated action is crucial to overcome its effects. The European Investment Bank, as the EU's climate action bank, has made climate action one of its top priorities and today is one of the largest multilateral providers of climate finance worldwide.
Ahead of the 2019 United Nations climate change conference in Madrid, the EIB Board of Directors approved a new set of targets for climate action and environmental sustainability, drastically increasing the EIB's ambition for the critical decade to 2030 which includes support for €1 trillion of investments in climate action and environmental sustainability in the critical decade from 2021 to 2030.
Today, the EIB commits more than 25% of its financing to climate change adaptation and mitigation and will gradually increase this share dedicated to climate action and environmental sustainability to reach 50% of operations in 2025 and beyond. The EIB has already provided USD 100 billion to climate-related projects in the five years from 2016 to 2020, as it helps turn the COP21 ambitious Paris agreement into reality.
The mission of the European Investment Bank is to foster sustainable growth within the EU and abroad. Sustainable Finance is at the heart of the EIB Group and shapes its activities and investment decisions. The EIB is firmly committed to sustainable development, which is anchored in its strategy and remains the foundation of the EIB's business model.
The EIB apprises and monitors all the investment projects it finances with regard to their sustainability credentials such as environmental, social and governance aspects. The EIB makes a separate economic appraisal of all its investment projects to assess the costs and benefits to society as a whole. Only projects that fulfil both financial and a separate sustainability due diligence can be financed by the EIB. Projects financed by the EIB also have to comply with EU Environmental and Social Principles and Standards to incorporate environmental and social sustainability considerations into EIB investments.
THE EIB IN INDIA
The EIB has supported long-term investment projects in India for over 25 years, bringing the experience and expertise of its in-house engineers and economists to help develop and appraise top quality projects. As of today, the EIB has approved €3.4 billion for India, of which €600 million still need to be signed. These operations have helped mobilise some €10.2 billion of investment in India's infrastructure.
The EIB's financing in India over the last six years has been 100% climate action, contributing both to the EIB's own ambitious climate action goals and to the climate strategies of the Indian government. Most recently, the Bank's Board approved in December 2019 financing of €400 million for the Bhopal metro.
The EIB opened its Regional Representation for South Asia in New Delhi on March 31st, 2017 and is hosted within the offices of the Delegation of the European Union. EIB Vice President Andrew McDowell recently visited Pune and Mumbai in January 2020, meeting the Chief Minister of Maharashtra, representatives of the State Government of Goa, Indian partner organisations, whilst hosting two seminars on urban public transport and sustainable finance for resilient urban infrastructure respectively. The EIB's President, Werner Hoyer last visited India in March 2018 for the inauguration of the International Solar Alliance, meeting PM Modi and Minister Piyush Goyal during his visit.
As an AAA-rated, policy-driven EU financial institution, the EIB offers attractive financial terms-competitive interest rates with loan durations aligned with the projects. Through its partnerships with the EU and other donors, the EIB can often provide grants to further improve the development impact of the projects the EIB support.
Through its financing, the EIB acts as a catalyst to attract the funding needed to meet the UN's Sustainable Goals for 2030. In India, and in Asia more generally, the EIB has chosen to focus its lending on climate action across all sectors. The EIB also works to include gender equality in its projects, ensuring that women, men, girls and boys can benefit from projects equally and equitably.
ENSURING URBAN MOBILITY IN INDIA'S BIG CITIES
India's rapid growing population and increased economic development are straining the country's transport systems and posing serious environmental challenges. For the past five years, the Bank's financing has changed the way millions of people move- and breathe- in some of India's most heavily populated cities.
- Lucknow Metro- a €450 million loan from the EIB is expected to increase the share of public transport services from 10% to 27% by 2030
- Bangalore Metro- a €500 million EIB loan for the new metro line is expected to cut travel times for some journeys from two hours a day to just 15 minutes
- Pune Metro- a €600 million loan will support the construction of two metro lines, which includes 31 kilometres of tracks and 30 stations
- Bhopal Metro- a €400 million loan for the construction of two lines of metro totaling 31 km with 30 stations and purchase of a related fleet of metro cars
Transport is the key to growth and competitiveness, as it provides the physical networks enabling the movement of people and goods. Better mobility provides access to jobs and social services such as hospitals and schools that contribute to the improvement of people's lives.
BACKING INDIA's RENEWABLES REVOLUTION
The promotion of sustainable, competitive and secure sources of energy is a key EU policy objective and an important sector of EIB financing worldwide. In support of the sustainable generation and transmission of energy, the EIB not only finances mature renewable energy technologies, such as onshore wind farms, hydropower, geothermal and solid biomass, but also strongly encourages the expansion of early-stage of evolving techologies, such as offshore wind, photovoltaic, concentrated solar power and second-generation biofuels.
Energy accounts for almost one-half of the EIB's portfolio in India, amounting to €1.6 billion. The Bank has supported investments in the generation and transmission of energy, most notably large-scale solar parks and wind farms across 7 states in India.
INVESTING IN INDIAN PRIORITIES
The EIB gives priority to the following types of projects in India, and Asia more generally
- climate change mitigation and adaptation (e.g renewable energy, energy efficiency, urban transport and other projects that reduces CO2 emissions)
- development of social and economic infrastructure, including water and sanitation
- local private sector development, in particular support to SMEs
Projects with a total investment above €25 million can be financed either directly to a project promoter or indirectly through a government or financial intermediary. Project promoters are required simply to provide the EIB with a detailed description of their capital investment together with the prospective financing arrangements. The total investment of a typical project in India is typically above €100 million.
For smaller projects, the EIB provides credit lines to selected partner financial institutions, which then on-lend the funds mainly to small and medium-sized enterprises(SMEs). The financial institutions assess each project, assume the credit risk and set the loan conditions for the final beneficiary according to criteria agreed with the EIB.
For more information, the EIB can be reached at : email@example.com