The European Investment Bank intends to raise its total lending in the European Union and Pre-Accession countries to as much as EUR 70 bn in 2009 in response to strong demand for its funding in the current tough economic and financial climate.

Loan signatures in the European Union from October 2008 to end-May 2009 amounted to EUR 46.9 bn – a rise of 63% over the same period to May 2008. Disbursements in the same period rose 37% year-on-year, to EUR 35.8 bn.

The EIB committed itself last December to a European Economic Recovery Package that would increase overall lending in both 2009 and 2010 by some 30 percent, or EUR 15 bn, over the more typical annual total of around EUR 45 bn, provided it could identify enough suitable projects.

The EIB is already well on course to meet this 2009 target, and an ample stream of viable projects means loan signatures could now exceed the total foreseen in December by a further EUR 10 bn, President Philippe Maystadt told the EIB’s Board of Governors  at its annual meeting in Luxembourg.

This is a sign of how quickly and efficiently the EIB can deliver on its promises,” President Maystadt said. “Total lending of some EUR 70 bn would mean a truly significant contribution in terms of liquidity to European banks, corporates and public sector clients.

Lending has advanced particularly strongly in three key areas targeted by the Recovery Package: small and medium-sized enterprises (SMEs); energy and mitigation of climate change; and investment in the poorer, ‘convergence’ regions of the EU. Loan signatures in all three of these areas in the five months to end-May show a clear increase over the equivalent period of 2008.

Lending for SMEs amounted to EUR 4.4 bn to end-May – more than half the full-year target of EUR 8 bn – while loans for energy and mitigation of climate change reached EUR 3.9 bn against a full-year target of EUR 9 bn. Loans to support convergence have been signed for EUR 7.7 bn in the year to date, compared with a 2009 target of EUR 22 bn.

As well as providing extra liquidity, the EIB is helping to ease the impact of widespread risk aversion in the wider financial sector by expanding its activities into a broader range of financial products than ever before. This entails taking on greater levels of calculated risk, while maintaining tight controls to ensure that the EIB remains on a solid footing within safe financial boundaries.

For example, approvals for sub-investment grade loans financed under the Structured Finance Facility (“SFF”) amounted to EUR 6.4 bn over the past nine months – almost as much as outstanding stock.

The EIB Group’s  capacity to take on more risk is also being expanded through new guarantee products, an extended range of risk-taking instruments for the financing of SMEs and MidCaps, and increased availability of equity and quasi equity finance in critical sectors.

Note to editors:

The European Investment Bank was created by the Treaty of Rome in 1958 as the long-term lending bank of the European Union. The task of the Bank is to contribute towards the integration, balanced development and economic and social cohesion of the EU Member States. The EIB raises substantial volumes of funds on the capital markets which it lends on favourable terms to projects furthering EU policy objectives. The EIB continuously adapts its activity to developments in EU policies.