EIB and the Energy Sector European Investment Bank – 3 rd MEDREG-IMME Seminar – September Tunis 1

EIB and the Energy Sector European Investment Bank – 3 rd MEDREG-IMME Seminar – September Tunis 2 1)Policy context Inside the European Union Outside the European Union 2) Portfolio Inside the European Union Outside the European Union 3) Perspectives for RE and EE in the MED region Challenges Instruments EIB eligibility parameters

Policy priorities since 2007 => 2012: Renewable energy – RE Energy Efficiency – EE Security of energy supply => energy networks RDI Outside the EU: Supporting climate action (RE, EE, mitigation / adaption) Supporting economic growth Contributing to security of energy supply significant increase in funding for RE and EE EIB Lending to the Energy Sector - Context European Investment Bank – 3 rd MEDREG-IMME Seminar – September Tunis 3

Energy Lending: Portfolio European Investment Bank – 3 rd MEDREG-IMME Seminar – September Tunis

EIB Energy Lending by Area Signatures

European Investment Bank – 3 rd MEDREG-IMME Seminar – September Tunis EIB Energy Lending by Sector Signatures

The EU bank RE Signatures by Sector 2007 – 2011 (%) European Investment Bank – 3 rd MEDREG-IMME Seminar – September Tunis

EU: EUR 53 bn European Investment Bank – 3 rd MEDREG-IMME Seminar – September Tunis Cumulative EIB Energy Lending Breakdown by Area and Sector Outside EU: EUR 10 bn

Key energy objectives: Supporting climate action Supporting economic growth Contributing to EU security of energy supply Specific Initiatives (e.g.. MSP), Instruments (e.g. GEEREF) and TA European Investment Bank – 3 rd MEDREG-IMME Seminar – September Tunis EIB Energy Lending Outside EU, Regional breakdown and objectives EUR 10 bn cumulative signatures

Perspectives for RE/EE in the FEMIP region European Investment Bank – 3 rd MEDREG-IMME Seminar – September Tunis

EIB in MENA => FEMIP Facility for Euro-Mediterranean Investment and Partnership (FEMIP) is the EIB financial arm in the Mediterranean partner countries* FEMIP supports the modernisation and opening-up of Mediterranean partner countries economies FEMIP has two broad priorities: 1 Provision of direct support to the private sector 2 Creation of an enabling, investment-friendly environment *Algeria, Egypt, Gaza/West Bank, Israel, Jordan, Lebanon, Morocco, [Syria] and Tunisia

European Investment Bank – 3 rd MEDREG-IMME Seminar – September Tunis Energy challenges in the FEMIP region MPCs: Algeria, Egypt, Jordan, Israel, Lebanon, Morocco, Syria, Tunisia, West Bank/Gaza Energy Challenges in the Mediterranean region Growing urban population Growing energy consumption Inefficient use of energy Investing in EE and RE as a Strategic goal

The EU bank European Investment Bank – 3 rd MEDREG-IMME Seminar – September Tunis Building and upgrading national energy infrastructure Strengthening regional energy interconnections and developing new energy routes Exploiting the regions exceptional renewable energy potential: sun, wind and hydropower Optimising sustainable energy development in a way that meets environmental concerns Last 10 years: EUR 5 bn +to energy sector

The EU bank Mandates from the EU for external lending: broad range of instruments from senior loans to equity Direct lending for large individual projects: e.g. wind Global & Framework loans to finance small and medium sized projects Advisory services TA resources available for FEMIP from the EC, and country Donors (FEMIP Trust Fund) Specific instruments GEEREF, etc. Support to specific initiatives: Mediterranean Solar Plan (MSP) MSP-PPI – Advanced project preparation (since March 2012) Financial Instruments

The EU bank 15 EIB Projects Eligibility Criteria 1.Benefit from appropriate regulatory framework and permitting processes 2.Be relevant to EU energy objectives & be technically sound Renewable energy, energy efficiency, security of supply, external mandates 3.Be economically and financially viable 4.Comply with EIBs Procurement Policy 5.Comply with EIBs Environmental and Social standards

The EU bank Benefit from appropriate regulatory framework and permitting processes A clear and stable RE support framework is key Limit exposure to energy price volatility Regulatory changes should not create regulatory uncertainty (e.g. changes in PV tariffs) RE moves from marginal to mainstream: How will regulations change to accomodate it? Predictability and transparency of permitting process and other regulatory frameworks Experience shows that financing is flowing when RE regulatory frameworks are clear and stable

The EU bank Be relevant to EU energy objectives & be technically sound Fit with NREAPs and overall national / regional RE strategy in MT/LT Mature or emerging technologies Financing easier for technologies with proven long term track record (on- shore wind, PV) More difficult for biomass, technologies in the early market penetration, or innovative or new RE markets Resource modelling and (feasibility) studies to be conducted by qualified specialists with proven experience For example for on-shore wind: at least one year on on-site wind measurements, preferably hub height

The EU bank Be economically and financially viable Cost of energy to be economically competitive with the fossil fuel alternative Incl. environmental externalities and security of supply benefit Project to be financially bankable Impact on profitability from: Regulatory changes to RE support systems Constraints

The EU bank Comply with EIBs procurement policy Obtain the economically most advantageous offer (best value for money) in purchasing the works, goods and services necessary to implement a project Principles: Competition as a basis to obtain attractive offers Fairness vis-à-vis competitors Appropriate selection process Most logical criterion: net present cost of constructing and operating the project component over its lifetime Transparency and accountability (well defined and documented)

The EU bank Comply with EIBs Environmental and Social standards Comply with EU policy Principles, standards and practices, including the requirements of local legislation for the protection of the environment Satisfy social safeguards Potential impacts need to be acceptable incl. Public consultation Natural habitats Forestry Indigenous people Involuntary resettlement Child and forced labor Cultural heritage Waterways Climate change

The EU bank Conclusions European Investment Bank – 3 rd MEDREG-IMME Seminar – September Tunis EIB is ready to contribute significantly to the financing of EE, RE and energy projects in the Mediterranean region Three key criteria for financing (good) RE projects Regulatory framework and permitting processes E&S (& procurement) guidelines Economics and financials

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