Subsidies
Target:
- projects with social economic and/or environmental benefits;
- infrastructure projects in Heavily Indebted Poor Countries or similar
Under the Cotonou Framework, Investment Facility operations and own resources loans can benefit from interest rate subsidies under specific conditions.
- for infrastructure projects in the Least Developed Countries, in post-conflict countries and post-natural disaster countries that are prerequisites for private sector development;
- for infrastructure projects by commercially-run public entities that are prerequisites for private sector development in countries subject to restrictive borrowing conditions under the Heavily Indebted Poor Countries (HIPC) initiative or another internationally agreed debt sustainability framework;
- for projects which involve restructuring operations in the framework of privatisation or for projects with substantial and clearly demonstrable social or environmental benefits.”
Revised Cotonou Partnership Agreement, Annex II, Article 2(7)
In cases of concessional funding, part of the interest rate subsidy can be channelled to leverage certain additional environmentally or socially desirable components of the project.
The subsidy amount is subject to the ceilings set out in the lending mandate and varies according to the specific conditions and benefits of each operation.
For the period running from 2008 to 2013, up to 10% of the EUR 401.5m financial envelope dedicated to subsidies can be used to fund project-related technical assistance.
For both interest rate subsidies and grant-funded technical assistance, the EIB cooperates closely with other international financial institutions and the European Commission, making sure operations are well conducted and complementary.
A number of initiatives - notably the EU Africa Infrastructure Trust Fund and the second phase of the EU-ACP Energy and Water Facilities - usefully complement EIB refundable support by way of interest rate subsidies and/or technical assistance and grants to projects in accordance with their own eligibility rules.
