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Guarantees

Within the EU the Bank may provide guarantees for senior and subordinated debt. The guarantee is either a standard guarantee or debt service guarantee similar to that offered by monoline insurers.

Depending on the underlying funding structure of the operation, an EIB guarantee may be more attractive than an EIB loan.

It can provide:

  • higher value-added
  • lower capital charges - under Basel II, EIB guarantees provide a zero risk weighting to the guaranteed obligation

In addition, the Loan Guarantee Instrument for TEN Transport (LGTT) is designed to guarantee revenue risks during a limited period following construction of TENs projects, notably under a PPP structure.

Guarantees are also provided under the Investment Facility for financing African, Caribbean and Pacific countries.