1. Financing investments in the shipping sector
Shipping and the Law, Naples 3 October 2013
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European Investment Bank Group 1

2. The European Investment Bank at a glance
Providing finance and expertise for sound and sustainable investment projects
Natural financing partner of the EU institutions
Shareholders: 28 EU Member States
Largest multilateral lender and borrower in the world
Raises funds on the international capital markets
Passes on favourable borrowing conditions to clients
More than 400 projects each year in over 160 countries
Headquarters in Luxembourg and some 30 local offices
Around staff:
Not only finance professionals, but also engineers, sector economists and socio-environmental experts
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European Investment Bank Group 2

3. The EIB: Supporting EU policy goals
Sustainable growth and jobs in Europe
Innovation and skills
Trans-European Networks
Sustainable, competitive and secure energy
Financing smaller businesses
Economic and social cohesion
Special support for economically weaker regions
Helping regions absorb EU funds
Environmental sustainability
Climate action
Sustainable transport
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European Investment Bank Group 3

4. The EIB: loans signed and disbursed from 2008 to 2012
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European Investment Bank Group 4

5. EIB Lending to transport sector
2012: EUR 14.5 billion

6. Transport lending guidelines
Strategic Transport Projects (incl. Trans-European Transport Networks (TEN-T))
develop Trans-European Transport Networks (TEN ports) and major transport axes in Neighbouring Countries
Sustainable transport
Foster modal shift from road to maritime/inland waterway/railway transport by:
allowing maritime cargo to come closer to the final destination, thus reducing cargo onward journey by land transport modes
facilitating the provision of a maritime alternative to road based-freight transport (motorways of the sea/ short-sea shipping)
facilitating the connection between maritime and rail/waterway hinterland transport (multimodal terminals)

7. Transport lending guidelines
Regional Development
Support projects located in ‘Convergence’ regions
Knowledge Economy (i2i)
Support R&D projects which feature a technological process or product innovation.

8. Eligibility (i) TENS (Motorways of the Seas):
Essential for the achievement of an efficient and cohesive Community-wide transport system
Often shipping provides the only vehicle for imports and exports to and from some European islands and peripheral maritime regions.
Specialised vessels, such as tugs and pilot vessels are essential for the operation of the Trans-European Ports Network under adequate safety conditions
EU regional development:
Shipping ensures the security of supply of energy, food and commodities and is indispensable for passenger transport and tourism in many regions
Maritime industries are an important source of employment and income for the EU economy

9. Eligibility (ii) Sustainable transport:
Short sea shipping and inland waterway transport solutions constitute sustainable alternatives to road transport corridors and have the potential to solve road congestion problems
Focus on supporting the development of clean technology, and increased fuel efficiency as well as more concentrated effort in the safe and environmentally efficient methods of phasing out older and less fuel efficient vessels
Investment in RDI:
For the reasons explained above, but also
To maintain the lead that EU has in world maritime equipment, components and specialist vessel industry

10. Maritime transport projects Examples of projects EIB could finance
Motorways of the Sea projects (infrastructure and vessel components) –full support
Vessels and port facilities on routes part of the Motorways of the Sea network
New vessels
In the EU: vessels with EU flag to be operated on « eligible routes », originating or ending on a EU country, during the loan life.
Short sea shipping: vessels operating on routes aimed at modal shift from road to maritime transport.
Convergence: vessel operations solely aimed at developing region assistance.
Remote community support where no viable alternate to shipping is available (EU island community support).
Replacement of older less energy efficient vessels.
N.B. The Bank pays special attention that the ships it finances use best available technologies and that Borrowers use sound environmental management practices.

11. EIB funded vessel projects in the EU
Ro-ro vessels (Baltic Sea and Western Europe Motorways of the Sea)
Ro-pax vessels (Spain-Italy & Italy-Greece Motorways of the Sea)
Feeder Containers linking EU ports with Africa
Car carriers linking EU, West Africa and South America
Offshore wind turbine installation vessels
Ro-pax vessels incorporating LNG technology
LNG Engine retrofitting
Cruise ships
EIB funded vessel projects outside the EU
Istanbul Urban Transport, Turkey (ferries for the Bosphorus)
Ro-Pax ferry – Linking Dakar with Ziganchor in Sénégal

12. Maritime transport projects Examples of projects EIB could finance
Vessel R&D
R&D to enhance ship environmental performance and energy efficiency (ship hull, propulsion, power plants, waste treatment, etc).
Shipbreaking
Development of safe and environmentally sound ship decommissioning facilities.

13. EIB funded marine R&D activities
Electric motors - thrusters with increased efficiency and reduction of fuel consumption
Dynamic Positioning Systems for vessels, and Automation systems for marine propulsion applications
Heat Exchangers for Fresh water generation on board ships, high speed separators for onboard bilge water cleaning systems, marine sludge dewatering system and oil mist separation
Sealing solutions for use in Offshore applications such as buoyancy offshore applications, rubber offshore products and sub sea solutions / deep water drilling applications
Improvement of marine engines in order to comply with increasingly strict exhaust regulations
Generators and electric power distribution systems for ships

14. Vessel acquisition requirements
All shipping financed by EIB under EU eligibility should have an EU flag to ensure compliance with European safety, operating and environmental norms. Furthermore, under an EU eligibility, Bank financed vessels are to operate to or from an EU port.
As a strict minimum, all shipping projects will adhere to all EU and IMO safety and environmental rules and regulations with regard to the construction and operation of vessels.
For projects involving the expansion of the deep-sea fleet, the project implementation will result in an overall improvement of the shipping line environmental performance.

15. Procurement guidelines
As a general rule the Bank will require the borrower to consult at least five companies from at least three different countries. Should there not be enough shipyards with the technical capabilities to uphold these conditions, the Bank will ensure that the result of the tendering process is in accord with the project’s best interests, and respects the principles of economy, fairness and transparency.
The Bank will, on the basis of the available information, take steps to confirm that project vessel prices are in line with market prices and, in co-operation with the EU Commission (under Article 19), will check the existence of any outstanding issues concerning Intellectual Property Rights, potential breaches of trade agreements and, as far as possible the risk of distortions caused by anti-competitive practices (including, inter alia, state aid, direct subsidisation, injurious or below-cost pricing, or subsequent public rescue of bankrupt companies) in the producer country or in the shipyard concerned.

16. Financing Facilities 2 main facilities Direct Loans
Large-scale projects (investment cost > EUR 25m)
Intermediated Loans (investment cost < EUR 25m)
Small and medium-scale projects (particularly to SMEs) via national and regional intermediary banks
Lending decision remains with the financial intermediary
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17. Project Requirements Projects must:
Meet at least one of the EIB’s objectives
Be technically sound
Be financially viable
Show an acceptable economic return
Comply with environmental protection and procurement regulations
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18. The EIB project cycle
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19. European Investment Bank Group
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European Investment Bank Group 19