The European Investment Bank (EIB) is the financing institution of the European Union. The Bank, which is owned by the EU's 27 Member States, provides long term finance to eligible projects supporting EU policy objectives such as the economic development of lagging regions, promoting sustainable and secure energy supplies, developing transport infrastructure and others. The Bank finances its investments by raising large amounts of funds on world capital markets; these funds are then on-lent to eligible projects on a "not-for-profit" basis. The Bank's financial value added to borrowers comes from its AAA status, its willingness to share risks on projects with other lenders and the long maturities it can offer in a variety of currencies. The EIB is also known for the robust environmental, technical, economic and financial due diligence it applies to projects; for this reason, EIB finance can act as a catalyst for other funders to participate in project financings.
EIB is Europe's leading funder of PPP projects, providing over €11 billion of funding to PPP projects since 2005, of which 34% was for UK PPP projects. Details of the Bank's PPP lending in the UK from 2005 to 2009 are given in the Annex to this note. The financial crisis has increased the Bank's attractiveness as a source of funding for PPPs and the Bank has remained, therefore, an important source of lending to PPPs, committing over €1 billion to projects in the UK alone in 2009.
Notwithstanding the bank's substantial financial commitment to PPP projects, the EIB is available to fund eligible projects regardless of whether PPP or a conventional public sector funded procurement method is used (provided such procurement complies with EU Directives). In this context EIB is a major funder of local authorities and governments throughout the EU, and in the UK recently signed a £1 billion loan facility with Transport for London to part fund the Crossrail project.
In late 2008, and in recognition of requests from its shareholders and its experience in the field, the Bank established the European PPP Expertise Centre (EPEC) as a joint initiative with the European Commission and Member States. EPEC, which now includes some 25 national or regional public sector PPP taskforces or policy units, is designed to improve sharing of information, expertise and good practice across the public sector in Europe.