EIB contribution to Sustainable Development. Yohann Chaigneau

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1 EIB contribution to Sustainable Development Yohann Chaigneau

2 2 EIB OVERVIEW Largest multilateral bank in the world Non-profit, policy-driven EU Bank Playing an integral role as an instrument of EU internal and development policies Focused on private sector development Aiming at high socio-economic impact

3 WE DELIVER IMPACT WHERE IT IS NEEDED 3

4 WE FOCUS ON OUR KEY PRIORITIES EIB activities focus (and are measured) on four Public Policy Goals (PPGs): AND Cross-Cutting Goals (Climate Action, Social & Economic Convergence and Cohesion) 4

5 GLOBAL APPROACH 5

6 WE ARE THE WORLD S LARGEST SUPRANATIONAL BORROWER 6

7 TOWARDS THE 2030 DEVELOPMENT AGENDA 7 In compliance with the EU Agenda for Change Greater focus on investing in drivers for inclusive and sustainable growth Higher share of EU aid through innovative financial instruments, including under facilities for blending grants and loans Focus on helping reduce developing countries' exposure to global shocks such as climate change, ecosystem and resource degradation From Billions to Trillions: MDB Contributions to Financing for Development/SDGs leverage catalytic effect smart ODA partnerships Overarching priorities Private sector development (currently 70% of the EIB activity in the ACP region, mainly through the ACP Investment Facility) Climate change mitigation and adaptation

8 17 SDGs and 169 targets addressing economic, social and environmental dimensions in a balanced manner 8

9 CLIMATE STRATEGY 9

10 EUROPEAN FUND FOR STRATEGIC INVESTMENTS WITHIN EU 10

11 EFSI INVESTMENTS BY SECTOR 11

12 OUTSIDE EU: NEW PROJECTS BY REGION 12

13 LENDING OUTSIDE EU NEW PROJECTS (2015) 13

14 EIB TOOLS in CONTRIBUTION TO SDGs LENDING under own resources and with 3rd party resources (Mandates, Impact Financing Envelope of the ACP-IF) BLENDING risk-sharing instruments (NIF, EU Africa Infrastructure Trust Fund) FOCUSED ACTIONS to respond to emergency situations (e.g. migration and refugees crisis) ADVISORY / TECHNICAL ASSISTANCE BORROWING ACTIVITIES (green bonds) 14

15 INSTRUMENTS FOR DEVELOPMENT IMPACT 15 Standard Project Loans Intermediated lending (Credit line, MBILs, Microfinance) Funds (Equity & Risk Capital) Blending Technical Assistance Concessional lending Guarantees PPPs Investment Grants Risk sharing Innovative Impact Financing Envelope Climate Awareness Bonds Social Impact Funds Local currency hedging Higher Risks for Higher Impact Outreach Catalytic Effect Leverage Effect Diversification

16 THE THREE PILLARS & REM FRAMEWORK Pillar One Quality and Contribution of the project to Sustainable Growth and Employment Growth Promoter Capability Environmental and social sustainability Employment, Technology and other benefits Pillar Two Contribution of the project to EU/EIB policy EIB Eligibility Higher Priority Areas Exceptional Contribution Pillar Three Contribution of the EIB to the project Financial Contribution Financial Facilitation Technical Contribution 16

17 MULTI-PARTNERSHIP APPROACH 17 Policy guidance MDBs Others + Civil society + Private Sector + Public Sector + Donors

18 18 CONTRIBUTION TO Resilient Infrastructure Access to clean water Reliable Energy Sustainable Climate action Sustainable & Inclusive Growth Food Security Healthy Lives Equitable Education

19 SDG 2: End hunger, achieve food security and improved nutrition and promote sustainable agriculture Priorities: Helping to meet growing demand for food Sustainable and inclusive rural development Climate-smart and innovative resource management Supporting the agro-business value-chain Project Country Description APEX Loans AGRIF Ukraine ACP Countries The project targets private sector agri-food entities and includes small and medium farmers across the country. The project is expected to support technological modernisation in order to improve resource efficiency, reduce losses and waste along the value chain, improve competitiveness in the selected chains, enhance food safety and quality and ensure that sales of Ukrainian products can be strengthened both in the country and internationally. AgRIF will invest in financial intermediaries in emerging economies that enhance financial inclusion of smallholder farmers and rural MSMEs in the agricultural value chain. AgRIF is a 10 year closed-ended mixed fund, that will make equity and debt investments. The average ticket size of the investments will be between 5-10 million USD. Indirect SDGs EIB Financing EUR 400 m 19

20 SDG 13: Take urgent action to combat climate change and its impacts Priorities: Building water and energy-secure future Banking on sustainable transport Growing a greener economy Tackling future climate risks Project Country Description Ouarzazate Solar Power Plant Morocco Once operational, the Ouarzazate complex will have a capacity of 500 MW, which is equivalent to powering a city of 250,000 inhabitants. Co-financed by the EIB, it will be one of the largest in the world. In its first phase of construction alone, it is expected to contribute to avoiding 193 tonnes of carbon dioxide per year while developing renewable energy and energy security in Morocco, as well as creating jobs and promoting an integrated local solar industry. As a renewable energy project, Ouarzazate Solar Power Plant is classified as 100% eligible for Climate Awareness Bonds. Indirect SDGs EIB Financing CAB allocation 2014: EUR 40m 20

21 SDG 8: Promote sustained, inclusive, and sustainable economic growth, full and productive employment and decent work for all Priorities: Enabling continuous and affordable access to finance Mobilising additional financing to the real economy Providing finance for essential Project Country Description Indirect SDGs EIB Financing Novastar Venture s East Africa Fund This investment is going towards a total fund of around EUR 60m which will be dedicated to local entrepreneurs involved in early stage private sector MSMEs, for whom attaining credit is a challenge. This fund will provide equity or quasi-equity funding to around 20 such small businesses in education, healthcare, basic financial services, agribusiness, and access to food and water. The Novastar East Africa Fund aims to reach at least two million individuals from low-income households, who will benefit either directly or indirectly from the activities of the target investee companies. It also aims to create around new jobs, of which will go to those low-income households or individuals, while at least half of those jobs directly created will go to women. EUR 8m 21

22 SDG 9: Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation SDG 11: Make cities and human settlements inclusive, safe, resilient, and sustainable Priorities: Regional integration Promoting sustainable infrastructure Making cities and human settlements sustainable and inclusive Project Country Description Quito Metro Mongolia Housing project Ecuador Mongolia The project consists of the construction of the first metro line in Quito, Ecuador, 23 km long, with 15 stations. The project promotes a sustainable public transport system in Quito, currently suffering from problems of congestion, attracting users from private cars. Long-term loan (co-financed with the ADB) for a multi-sector urban development investment project aimed at improving the living conditions in the informal settlements of Ulaanbaatar. It will extend water distribution and wastewater collection infrastructure, including new domestic connections, to up to inhabitants of the poor areas. This is expected to reduce waterborne diseases by a third. Indirect SDGs EIB Financing EUR 200 m EUR 50m 22

23 SDG 6: Ensure availability and sustainable management of water and sanitation for all Priorities: Sector development Climate change Water efficiency Additional supply requirements Project Country Description Indirect SDGs EIB Financing Keeping up with water demand in Zambia Zambia The project consists of rehabilitating and expanding water and wastewater services. The project leads to upgrades to key water and sanitation infrastructure which is generally over 50 years old and cannot cope anymore with the growing demand and with historical pollution levels. The objective is to connect 95% of households to the sewer system. EUR 75m 23

24 SDG 7: Ensure access to affordable, reliable, sustainable and modern energy for all Priorities: Sustainability through renewable energy sources Supply security through diversification Energy efficiency technology Project Country Description Indirect SDGs EIB Financing Expending electricity supplies in Burkina Faso Burkina Faso Financing of the installation of a 30 MW solar plant. This is the only pilot solar plant project in Burkina Faso and West Africa. The objective of this is to reduce Burkina Faso s dependence on neighbouring countries for its energy, and contribute to cutting costs for local users as well as increasing the reliability of supply by 10% per year by producing stable energy domestically from renewable sources. The EIB s additional TA will enable the solar plant to be connected to the grid. EUR 23m 24

25 SDG 3: Ensure healthy lives and promote well-being for all at all ages GOAL 4: Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all GOAL 5: Achieve gender equality and empower all women and girls Project Country Description Novastar Venture s East Africa Fund Modernizing schools Tunisia Investment towards a fund of EUR 60m which will be dedicated to local entrepreneurs involved in early stage private sector MSMEs, for whom attaining credit is a challenge. This fund will provide equity funding to around 20 such small businesses in education, healthcare, basic financial services, agribusiness, and access to food and water. The EIB is supporting a comprehensive programme to modernise the country s schools, which will enable an additional school students to be enrolled. Indirect SDGs EIB Financing EUR 8 m EUR 70m Hospitals New Caledonia Support of the construction of a new hospital complex on the outskirts of the capital of New Caledonia, Nouméa. EUR 20m Empowering women Jordan Credit line Microfund for Women in the Jordanian microfinance sector. In this instance, the EIB is supporting a wellestablished institution with a 95% focus on women. 25

26 EFSI IS OUR MOST EXCITING CHALLENGE TO DATE 26

27 EFSI 10 PRIORITIES Jobs, Growth and Investment Stimulating investment for the purpose of job creation Digital Single Market Bringing down barriers to unlock online opportunities Energy Union and Climate Making energy more secure, affordable and sustainable A balanced EU-US Free Trade Agreement Freer trade without sacrificing Europe s standards Justice and Fundamental Rights Upholding the rule of law and linking up Europe s justice systems Migration Towards a European agenda on Migration A Deeper and Fairer Economic and Monetary Union Stability for the single currency, solidity of public finances and social fairness in implementing structural reforms Internal Market A deeper and fairer internal market A Stronger Global Actor Bringing together the tools of Europe s external action Democratic change Making the EU more democratic 27

28 EFSI: SMALLER COMPANIES Project Country Description SDGs MALIN CORPORATION - LIFE SCIENCES INVESTMENTS FOND-ICO RISK SHARING LOAN UK, Ireland Spain The project concerns the investment into innovative research and development (R&D) intensive earlystage companies in the life sciences sector. Loan to ICO to fund Fond-ICO Global s participations in selected private growth funds in Spain for growth and expansion finance of private companies in the EU EFSI Financing EUR 70 m EUR 125 m NORMANDY DAIRY PRODUCTION FACILITY France Construction and operation of a new modern milkprocessing factory EUR 125 m RAFFINERIA DI MILAZZO SCPA Italy The project consists of various investments at a refinery located on the northern coast of Sicily. A third of the total investment will aim at improving the energy efficiency of the plant. EUR 225 m 28

29 EFSI: RESEARCH, DEVELOPMENT & INNOVATION Project Country Description SDGs AUTOMOTIVE STEEL RDI AGRO FOOD INDUSTRY RDI MIDLAND METROPOLITAN HOSPITAL PPP Germany, France, Sweden, UK, Spain Greece UK The project comprises investments in research, development and innovation (RDI) for automotive mechanisms, body-in-white and chassis. The project will finance Creta Farm's expansion plan through the development of new product lines in the premium branded meat snack and dairy segments The project involves the construction and maintenance of the new Midland Metropolitan Hospital to replace two existing outdated facilities and is part of a comprehensive integrated healthcare plan for the served population. EFSI Financing EUR 160m EUR 15 m EUR 148 m 29

30 EFSI: ENERGY Project Country Description SDGs EFSI Financing SMART METERS - PROJECT SPARK UK Installing smart gas and electricity meters for a major energy supplier in the United Kingdom EUR 478m 2I RETE GAS SMART METERING Italy Installation of smart metering systems in the distribution networks of 2i Rete Gas throughout Italy EUR 200m MALL OF TRIPLA NEAR- ZERO ENERGY BUILDING PROJECT Finland The project relates to the construction of a commercial nearly-zero-energy building (NZEB) in the Helsinki Metropolitan Area. EUR 130 m GALLOPER OFFSHORE WIND UK The project concerns the design, construction, and operation of a medium-scale offshore wind farm with ca. 340 MW total capacity. EUR 314m 30

31 EFSI: DIGITAL Project Country Description SDGs TI - ACCELERATED HIGH SPEED BROADBAND ROLLOUT DIGITAL INNOVATION FRENCH OVERSEAS TERRITORIES RISK SHARING Italy Finland, Denmark, Sweden France Financing the accelerated investment plan of Telecom Italia for next generation networks. The project relates to research, development and innovation (RDI) investments used for the development of new content as well as content delivery platforms in Sweden. Multi-sector investments, including urban development, tourism, energy and social services with public and private promoters, located the French Departments d'outre Mer (risk-sharing with AFD) EFSI Financing EUR 500m EUR 100m EUR 150m 31

32 EFSI: TRANSPORT Project Country Description SDGs SPANISH STATE FUND FOR PORTS ACCESSIBILITY D4R7 SLOVAKIA PPP LISBON URBAN REGENERATION CLIMATE HOUSING Spain Slovakia Portugal Framework loan to fund rail and road access investments in state-owned ports in Spain. The project will help to improve land connectivity in key ports all located in the TEN-T Network The project consists of the design, construction and financing of approximately 27 km of the D4 motorway around Bratislava and is to be procured as part of the D4R7 public-private partnership (PPP). Framework loan to co-finance the multi-annual investment plan of the city of Lisbon. The operation includes environmental remediation, prevention and risk-protection projects, urban regeneration infrastructure and social housing, including new houses and major repairs in existing stock. EFSI Financing EUR 105m EUR 427m EUR 250m 32

33 EFSI: ENVIRONMENT AND RESOURCE EFFICIENCY Project Country Description SDGs MALL OF TRIPLA NEAR- ZERO ENERGY BUILDING PROJECT GINKGO FUND II IRISH WATER ERVIA LOGEMENTS INTERMEDIAIRES - SLI Finland EU, France, Belgium Ireland France The project relates to the construction of a commercial nearly-zero-energy building (NZEB) in the Helsinki Metropolitan Area. This project involves the EIB participation in an infrastructure fund for the remediation and regeneration of polluted brownfield sites in the EU. Financing part of the Irish Water regulatory capital expenditure (capex) programme for the period Construction de logements intermédiaires (logements à loyers maîtrisés) par une société dédiée dont l'etat français sera actionnaire EFSI Financing EUR 130 m EUR 30m EUR 200m EUR 500m 33