Arcelor Mittal Steel product and processing R&D Facility Project

The project covers the research, engineering and technological innovation for process improvements (i.a. emission’s reductions and recycling) and for new steel products and markets. These activities will be carried out in the ArcelorMittal’s research and technology centres in Gent and Liège (Belgium), Esch-sur-Alzette (Luxembourg), Isbergues, Montataire, Gandrange, Maizières-les-Metz, and Le Creusot (France), and Avilès (Spain). The project further includes preparatory investments related of relining of the two blast-furnaces selected for the European Steel Technology Platform’s ultra-low CO₂ steelmaking, for in situ research on CO₂ sequestration, recycling and storage on industrial scale, in Eisenhüttenstadt (Germany) and Florange (France).

The complaint concerns the compliance of the appraisal of the project with the Treaty on the Functioning of the EU (TFEU) as well as with the EIB Statute. The allegation is, in fact, that that operation had been proposed in spite of the availability of alternative financial resources for the borrower and that therefore the EIB, in lending towards the financing of this project, would fail to rationally employ its funds, as required by its Statute. The allegations are also that the EIB failed to adequately reply to earlier expressions of concern in this matter and the complainants demand that the EIB suspend its processing of the operation (due-diligence appraisal, contract negotiation up to the signature of the Finance Contract).

The EIB/CM work:

During its investigation the EIB/CM found, in the Appraisal Report of the operation as well as in the Proposal of the Management Committee to the Board of Directors, that the EIB services did, indeed, assess the availability of alternative sources of funding available to the borrower for the project.

The EIB/CM rejects the allegation of breach of article 309 TFEU and 16 of the EIB Statute. However, a serious assessment of the availability of alternative funds for the project, as e.g. under article 16 of the EIB Statute, shall be undertaken in the appraisal of the project and should be clearly identified as one of the step of the appraisal in the operating manuals of the concerned EIB services. Such assessment should be documented and be kept with the appraisal file. A paragraph dedicated to this assessment should be included in the Appraisal documents. The EIB/CM, moreover, feels that the Management Committee complied with its statutory duty by informing the Board of Directors of scarcity and necessary nature of the investment proposed for approval. In light of this consideration the Management Committee could consider to include in its proposal to the Board of Directors, a paragraph dedicated to such assessment as information necessary for the Board of Directors to exercise its functions under article 9 of the Statute.

Conclusion:

In view of the findings above, the EIB CM concludes that the competent services of the EIB acted in compliance with the applicable policy of the Bank and therefore files the allegation as ungrounded. The EIB/CM recommends that the EIB should keep documentary evidence of the assessment performed during the appraisal and report on it in a paragraph in its Appraisal Report, with a view to fulfilling statutory requirements. That information should also be systematically included in the documentation provided to the Board of Directors when requesting the approval for a proposed operation as instrumental for the exercise of the Board’s functions under article 9 of the Statute.

As information on availability of alternative sources of funding available to the borrower do not fall under the exception of confidentiality (such as e.g. the protection of commercial interests of the borrower) the EIB/CM considers that the complainants should have been provided with this information in answer to the earlier expressions of concern.