The Board of Governors, consisting of the Finance Ministers of the EU Member States, the EIB's shareholders, held its annual meeting today in Luxembourg. Ministers of the 10 Acceding States participated as observers and were welcomed as future Governors.

The President of the EIB, Philippe Maystadt, provided a summary of the Bank's activities in support of EU policies and an overview of operational priorities, both within and outside the European Union.

The Board of Governors endorsed the EIB's operational priorities:

  • Regional development and economic and social cohesion;
  • Implementation of the Innovation 2010 Initiative (i2i);
  • Environmental protection and improvement;
  • Preparation of Accession Countries for joining the EU; and
  • Support for EU development and cooperation policies with Partner Countries.

Concerning regional development and economic and social cohesion, the Bank pursues the ambitious objective of granting 70% of direct loans to projects situated in assisted areas of the European Union. The Bank is actively participating in a Joint Working Group set up with the Commission aimed at designing future modes of support for assisted areas, in particular with a view to maximising the leverage effect of the structural funds. The EIB also contributes to economic and social cohesion through sustained backing for the financing of Trans-European Networks. Building on the experience acquired over the past 10 years (EUR 75 billion lent to this sector), the Bank intends to integrate its action into the priority measures currently being drafted by the High Level Group on TENs. The EIB will continue and extend its support for innovation. The EIB's Board of Governors approved the "Innovation 2010 Initiative", which will ensure that the financing of innovation remains a top priority until 2010. Subject to a mid-term review, the new i2i envisages a lending envelope of EUR 20 billion up to end-2006 for projects in three key areas:

  • Education and training;
  • Research & Development and innovative downstream investment;
  • Information and Communications Technologies.

Concerning the protection of the natural and urban environment, the Bank is maintaining its target of devoting 25-35% of total lending to environmental projects. Moreover, it will seek new ways to reflect the EU's environmental policy priorities in its actions, in particular by supporting the EU's international undertakings regarding greenhouse gases, renewable energies and the Johannesburg millennium goals. The Bank is represented in the Commission's working group for developing new financing mechanisms for renewable energy, and is closely following the progress of the Commission's Water Initiative.

Regarding activities outside the European Union, the Board of Governors approved the EIB's orientations in the Accession Countries and Western Balkans, and welcomed the Facility for Euro-Mediterranean Investment and Partnership (FEMIP) and the Cotonou Investment Facility.

In the Accession Countries, where the EIB has established itself as the single most important source of external finance, the funding of specific projects aims to assist the transposition of the acquis communautaire and generally facilitate the enlargement process. The Bank will strengthen its efforts in certain key sectors: lending to municipalities for local infrastructure; foreign direct investment; broader support for SMEs through a co-financing scheme developed with the Commission to promote long term lending; and increased backing for projects in education, R&D and health. With the substantial increase in EU grant aid to be made available to the new member states under the Structural and Cohesion Funds, the Bank will reinforce its cooperation and co-financing with the Commission in order to maximise synergies. Following the enlargement scheduled for 2004, the Bank will step up its activity in Romania and Bulgaria in order to help ensure that the timetable for further enlargement in 2007 is met.

In the Western Balkans, the Bank remains committed to playing a pro-active role in the development of the region and plans to lend EUR 1.2 billion over the next three years. Until now, the EIB has primarily focused on basic infrastructure reconstruction. As the region becomes more stable, activity will progressively expand into other sectors. The protection of the environment, the development of municipal infrastructure, the dissemination of innovation and the promotion of health and human capital will gradually gain in importance. The EIB will continue to coordinate its action with that of other International Financial Institutions, notably the World Bank and the EBRD.

Concerning operations in the Mediterranean Partner Countries, 2002 saw the official launch of the FEMIP initiative in Barcelona. Since October 2002, the EIB has approved loans totalling EUR 1.5 billion, more than one third of which in favour of the private sector, the prime target of the facility. As to the future direction of FEMIP, the Ministerial Committee Meeting held in April 2003 in Istanbul opened a constructive dialogue with the representatives of all interested parties: the EU Member States, Partner Countries and Institutions. FEMIP will focus on promoting access to finance for the private sector; the development of global loans and new financial instruments for equity and quasi-equity financing will prove instrumental in achieving this objective.

Activities in the African, Caribbean and Pacific Countries fall within the framework of the Cotonou Agreement. This Agreement represents a milestone in EU-ACP co-operation for economic development aimed at the reduction of poverty. It acknowledges the private sector's central role in the creation of economic wealth. In this context, the operations supported by the Investment Facility, officially launched on 2 June, will involve risk sharing more frequently than in the past and projects will be required to offer the likelihood of a reasonable level of remuneration. In this way, the Bank will create a revolving facility, using the proceeds of repayments and dividends. The task of generating sufficient returns to sustain a revolving facility undoubtedly constitutes a challenge, given the financial risks inherent to most ACP projects. The Bank will manage up to EUR 2.2 billion from the budgetary resources of the EU Member States. And finally, the EIB will complement the Investment Facility with loans of EUR 1.7 billion from own resources.

In 2002, the EIB's total lending reached EUR 39.6 billion (2001: EUR 36.8 billion). Lending within the EU amounted to EUR 33.1 billion. Loans devoted to regional development ran to close on EUR 20 billion. Projects financed under the Innovation 2000 Initiative in support of the EU's Lisbon strategy for strengthening innovation and competitiveness totalled EUR 3.3 billion. The Lisbon European Council (March 2000) had asked the Bank to dedicate, over three years, EUR 12 to 15 billion to projects furthering innovation - a mandate which has been fulfilled, with loans worth EUR 15.8 billion approved as of 1 May 2003. Lending in favour of the natural and urban environment increased substantially to EUR 9.3 billion.

Outside the European Union, a record EUR 3.7 billion in loans was signed in the Accession Countries (+37% compared to 2001), consolidating the EIB's position as the most important external source of finance for this region. Infrastructure projects - transport in particular - accounted for about half of the loan volume, while the environment took the second largest share, with EUR 1.3 billion signed under this heading. The Mediterranean region absorbed EUR 1.8 billion, paving the way for successful implementation of the Facility for Euro-Mediterranean Investment and Partnership.