European Investment Bank investing for development? The HUB , Praha

1) What is the EIB 2) EIB and it's role in development 3) The work of the Counterbalance coalition

Who are we? ● The Counterbalance coalition is composed of environmental and development NGOs from several European countries ● A watchdog coalition

What is the EIB?

The basics ● The EIB was founded in 1957 under the treaty of Rome ● Currentrly, it is one of the largest international public financial institution ● Initially it was funded through “subscribed capital”, but now raises most of its funds on global debt markets (AAA rated)

Who decides... ● The voting power of states is derived from the amount of subscribed capital, but... ● There is a tendency to take decisions by consensus. Board of governors Board of directors Managemen t committee

The EIB and the global South

EIB outside of the EU (1) ● The EIB operates outside of the EU under so called mandates, which ● set priorities for the EIB lending ● provide community guarantees ● There is a significant number of competing expectations from the EIB lending – highly politicised objectives

EIB outside of the EU (2) ● ACP countries are covered under the agreement from Cotonou ● Development objectives from the very beginning ● The rest (ALA, candidate countries, Mediterranean, south Caucasus and Russia) ● The present mandate sets out different objectives for each region

EIB outside of the EU (3) ● Neighbourhood countr.: up to EUR 12,4 bln. ● Asia and Latin America: up to EUR 3,8 bln. ● energy security of the EU, economic co- operation through direct investment ● Mediterranean: up to EUR 8,7 bln. ● Priority for energy investment and large infrastructure

CRISIS The winds of change ● “Wise person's panel” which stared as a mid- term review of the ELM ● Decision of the ECJ on the 6 th of November 2008 ● Refusal of the EP to rubber-stamp the present mandate. The EP insisted on preparation of a new one.

The EIB and types of lending

Safety? Efficiency first!

Types of lending (1) ● Traditionally, the main focus of the Bank was on projects ● Environmental and social impacts assessment weaker than in many other IFIs ● Very weak or no ex-post evaluation ● Often questionable value added

Types of lending (2) ● Growing attention is focused on financial intermediaries (global loans, private equity) ● “Black box” effect ● No clarity on either disbursement or performance ● Assessment of the projects delegated to the intermediary institution

One example for all - Zambia ● EIB has been lending in the country since 1978 ● Sectors funded in the last 32 years restricted to 4; Industry (largely mining), Credit Lines, Energy and Services ● No lending to other industries such as agriculture, infrastructure, health, education, telecommunications, transport, water or sewage ● No lending at all by the EIB since end of 2008

EIB in Zambia (2)

EIB in Zambia since 2003 (3) ● 3 credit lines – c. € 54 million ● 4 separate mines (3 copper & one nickel) Kansanshi, Mopani, Lumwana & Munali. c. € 196 million ● 1 energy - Zesco Kariba North, € 7.6 million ● No others

Thank you for your attention. Isabella Besedova & Martin Kryl