1. European Investment Bank
EPEC – Private sector Forum II Europe 2020 – A view of the future Brussels June 2nd 2010
2nd of June 2010
European Investment Bank

2. European Investment Bank
The European Investment Bank (EIB) Long-term finance promoting European objectives
European Union’s long-term lending bank set up in 1958 by the Treaty of Rome.
Shareholders: 27 EU Member States
Governance
Board of Governors – EU Finance Ministers
Board of Directors - Member States & European Commission
Management Committee –EIB’s executive body
Audit Committee – independent, non-resident
2nd of June 2010
European Investment Bank

3. The European Investment Bank (EIB) European priority objectives
Within the Union:
Cohesion and convergence
Small and medium-sized enterprises (SMEs)
Environmental sustainability
Knowledge Economy
Trans-European Networks (TENs)
Sustainable, competitive and secure energy
2nd of June 2010
European Investment Bank

4. European Investment Bank
Trans-European transport network (TEN-T) Progress until end 2009
2nd of June 2010
European Investment Bank

5. European Investment Bank
Infrastructure financing needs – Transport Trans-European Networks (TEN)
The estimated TEN-T investment requirement in is ca. €390bn
Potential Sources of Finance:
National Public resources finance ca %
Private sector risk finance needed to finance 20-25%
EIB loans finance ca % of TENs investments
Commission resources (Structural Funds and TENs) cover ca. 15%
Source: DG MOVE, EIB
2nd of June 2010
European Investment Bank

6. EIB’s support for Trans-European Networks (TENs)
Large transport and energy infrastructure networks
Transport supporting development and integration
Security and diversification of internal energy supply
Loans of EUR 12.7bn in EU in 2009:
EUR 10.7bn for TEN Transport
EUR 2.0bn for TEN Energy
Total loans of EUR 49.9bn
EUR 42.9bn for TEN Transport
EUR 6.9bn for TEN Energy
2nd of June 2010
European Investment Bank

7. European Investment Bank
Clear step-up in EIB TEN lending activity
EIB Funding
2004
2005
2006
2007
2008
2009
TEN
7.9
8.2
8.3
9.7
12.6
13.9
TEN-E
1.3
0.9
0.4
1.4
2.7
2.0
TEN-T
6.6
7.3
9.9
11.9
Priority Projects
2.2
2.9
3.1
3.2
1.8
Other Projects
4.4
5.2
6.7
10.1
PPP in TEN-T
0.3
0.2
1.1
Senior loans
7.1
7.8
11.1
SFF in TEN-T
0.0
0.5
1.6
0.8
Percentage of total TEN-T in Rail
40%
42%
37%
46%
27%
2nd of June 2010
European Investment Bank

8. European Investment Bank
In addition to standard EIB Senior loans for TENs projects, EIB also provides:
Structured Finance Facility (SFF): to fund projects with a higher risk profile and enable equity financing; mezzanine and guarantee operations for infrastructure schemes
Loan Guarantee Instrument for TEN Transport projects (LGTT): EUR 5 bn EIB guarantee programme for which EUR 1 bn risk capital has been jointly provided by the EIB and EU budget. LGTT shares the revenue risk in the early years of TENs projects
Investments in Equity Funds: EIB invests in equity funds, e.g. Marguerite, which in turn take direct equity participations in infrastructure investments
European PPP Expertise Centre (EPEC): Expertise service provided by the EIB and European Commission to support programme and policy development as well as best practice by the public sector for PPP transactions.
Joint Assistance to Support Projects in the European Regions (JASPERS): a joint policy initiative of EIB, DG REGIO, EBRD and KfW to provide assistance for absorption of Structural & Cohesion Funds period 2007 to 2013
European Clean Transport Facility (ECTF) is a major EIB financing programme to support investments targeting RDI (Research, Development and Innovation); emissions reduction and energy efficiency in the European transport industry. EIB lending under the ECTF facility currently amount to EUR 4.2 bn and targets automotive (OEMs/Suppliers), railroad, aircraft and shipping industries as well as related infrastructure.
2nd of June 2010
European Investment Bank

9. European Investment Bank
EIB as a financier of PPPs
PPP an important additional instrument for infrastructure investment
Since 1990, EIB has progressively broadened geographic and sectoral spread of its PPP lending
The Bank is now Europe’s foremost funder of PPP projects. Portfolio of 120 projects and investment of around EUR 25 billion
Signatures in 2008 in excess of EUR 3.5 billion. Despite difficult economic conditions in 2009, signatures exceeded EUR 2 billion.
2nd of June 2010
European Investment Bank

10. EIB support for major transport PPPs
2008
2009
INFRABEL RAIL TUNNEL PPP (BE) - €313m
AUTOBAHN A-5 PPP TEN (DE) - €225m
METRO DE MADRID IV- TR C (ES) - €50m
METRO DE SEVILLA DBFO 1&2 (ES) - €10m
AUTOVIAS RENOVACION PPP (ES) - €211m
M25 WIDENING TRANCHE A (GB) - €448m
AUTOROUTE A 19 (TEN/SFF) (FR) - €200m
M80 MOTORWAY PPP (GB) - €157m
TRAMWAY DE REIMS PPP (FR) - €107m
SCUT ACORES (PPP) TRANCHE BST (PT) - €60m
AUTOROUTE A88 PPP (FR) - €102m
SCUT ACORES (PPP) TRANCHE BBVA (PT) - €60m
E-K-P-P-T MOTORWAY PPP PROJECT (GR) - €200m
BAIXO ALENTEJO MOTORWAY (PT) - €225m
M6 DUNAUJVAROS-SZEKSZARD (HU) - €200m
AEROPORTI DI ROMA II (IT) - €80m
2ND COEN TUNNEL PPP (NL) - €194
A1 MOTORWAY - 2ND PHASE (PL) - €575m
DOURO LITORAL PPP (IC 24) (PT) - €350m
IP4 AMARANTE-VILA REAL (PT) - €200m
TRANSMONTANA MOTORWAY (PT) - €289m
2nd of June 2010
European Investment Bank

11. European Investment Bank
EIB Structured Finance Facility - SFF
Purpose of SFF is to create value added by financing riskier parts of selected transactions and by increasing EIB leverage and financing capacity. EIB’s total SFF financing of EUR 4.2 bn in 2008, EUR 5.8 bn in 2009
SFF Target Companies
risk profile
SFF allows EIB to increase the leverage on its own Funds and those of the EU Budget through Structured Finance
2nd of June 2010
European Investment Bank

12. LGTT – EUR 5 bn Loan Guarantee instrument
LGTT is a specialized risk based instrument developed by the EIB in cooperation with the European Commission.
The LGTT Guarantee Facility is designed to provide contingent mezzanine debt and thereby to protect senior debt in TENs projects that are exposed to traffic risk.
It provides up to 20% of additional mezzanine debt funds to meet traffic down side scenarios
LGTT makes the capital structure more robust to traffic; project and financial uncertainties
In current market circumstances, LGTT proved decisive to attract senior lenders and to close PPP projects with traffic risk components.
2nd of June 2010
European Investment Bank

13. European Investment Bank
LGTT – State of play
The pipeline at the end of 2009 stands at 17 active projects
The project pipeline is estimated to represent 20 projects by the end of 2010 and roughly projects by the end of 2011.
LGTT is fully on track, facilitating the progress of traffic based PPP throughout the Union.
It covers the majority of eligible deals in the market.
2nd of June 2010
European Investment Bank

14. Technical Assistance – JASPERS
Joint Assistance to Support Projects in the European Regions
Joint policy initiative of EIB, DG REGIO, EBRD and KfW
Assistance for absorption of Structural & Cohesion Funds period 2007 to 2013
Assistance with project presentation and identification
Analysis of horizontal issues such as grant/loan blending
Project implementation support to follow in second phase
2nd of June 2010
European Investment Bank

15. European Clean Transport Facility (ECTF)
ECTF facility is targeting RDI (Research, Development and Innovation) investments in emission reduction and energy efficiency in the European transport industry.
This Risk Sharing facility targets larger scale investments with corporate sponsors (or project finance structures).
Such risk-sharing facility is used for example for investments in:
intelligent traffic management (e.g. variable message signs, advanced traveller information systems, advanced driver’s assistance, speed advisory/control, electronic tolls, etc.), and
(ii) “Smart” vehicles (e.g. Advanced Drivers’ Assistance, accident sensors, automated guided vehicles, navigation systems, inter-vehicle communications systems etc.), and “Green” vehicles (application of ICT in reducing the congestion of vehicles).
2nd of June 2010
European Investment Bank

16. European Investment Bank European Investment Bank
EIB Fund Investments
Fund
First closing
Fund Commitment
Total EIB Commitment
Geographical Focus
Sector Focus
EUR (M)
Emerging Europe Convergence Fund
Aug-05
655 50
CEE
ITC expansion
Dexia Southern EU Infrastructure Fund
Mar-06
120 25
FR, IT, ES, PT
PPP
Dutch/Northern EU Infrastructure Fund
121 15
NW Europe
Barclays European Infrastructure Fund
Jul-06
315 28
UK, IE, FR, DE
San Paolo IMI Infrastructure Fund
Dec-06 18 IT
Enercap Power Fund
Jun-07 98
Renewable Energy
DIF Renewable Energy Fund
Sep-07
314
Benelux, FR, DE, Scandinavia
Mid Europa Fund III
Aug-07
1531 35
Central & Eastern Europe
Meridiam Infrastructure Fund
Oct-06
547 EU
Green Alliance Renewable Fund
Dec-07 41
ES,PT
Espirito Santo Infrastructure Fund
May-08 96
DIF Infrastructure Fund II
Dec-08
220
PPP / Renewable Energy
Dasos Timberland Fund I
May-09 85 17
Worldwide (40% Europe)
Timberland assets
Meridiam Infrastructure Fund II
Dec-09
175
SE Europe Energy Efficiency Fund 95
 SE Europe including Turkey
Energy Efficiency & Renewable Energy
2020 European Fund for Energy, Climate Change & Infrastructure [Marguerite]
710
100
Renewable Energy, TEN-T, TEN-E
Total
5243
528
2nd of June 2010
European Investment Bank
European Investment Bank 16

17. European Investment Bank European Investment Bank
2020 European Fund for Energy, Climate Change and Infrastructure – the Marguerite Fund
The Fund targets an equity base of EUR 1.5bn and an associated Debt Co-
Financing Initiative (DCI) of EUR 5bn
Major publicly funded Core Sponsors (EIB, CDC, CDP, ICO, PKO and KfW) as
well as the European Commission, CGD and Bank of Valetta are backing this
Fund; also Nordic Investment Bank and Black Sea Trade & Development
Bank support it through the Debt Co-financing Initiative. Public and private
sector investors from all EU countries are expected to join at a later stage.
Target sectors: TEN-T, energy and climate change
Focus on solid IRR targets - Fund to give preference to projects with
satisfactory Economic Rates of Return (ERR)
Expected to be a model in the future for other similar public and private funds so
as to attract Capital Market Institutions (including private and public pension
funds and insurance companies) to invest in TENs infrastructure
2nd of June 2010
European Investment Bank
European Investment Bank 17

18. Future Financing of Trans-European Networks (TEN)
TEN-T investment programme is so large that there is currently uncertainties relating to the scale of investments and the way it is to be financed.
Continued EIB effort to develop private sector participation in TENs funding
Source: DG MOVE, EIB
2nd of June 2010
European Investment Bank

19. European Investment Bank
Ideas on Future Financing of TEN-T Europe 2020 Strategy – Communication from the EC
Europe 2020 Strategy
Priority 1: Smart growth (Innovation, Education, Digital Society)
Priority 2: Sustainable growth (Climate, Energy and Mobility, Competitiveness)
Priority 3: Inclusive growth (Employment and Skills, Fighting Poverty)
4 Working Groups to determine how the EIB can best support the new policy framework
Preliminary outcomes
A lot can already be done with our current offering
However, to close “market gaps”, the Bank may need to expand or develop
Ways to leverage EU Budgetary funds
Risk-sharing activities
Capital-light structures
2nd of June 2010
European Investment Bank

20. EIB’s Role in Facilitating additional TEN-T investment
Facilitating Investment by Capital Market Institutions in infrastructure through guarantee and subordinated debt instruments
Establishing Equity Funds to finance TEN-T Infrastructure such as the 2020 European Fund for Energy, Climate Change and Infrastructure – the Marguerite Fund
Improvement of the coordination of EU Funds
Expand the development of knowledge sharing/expertise advice such as EPEC and JASPERS
European Clean Transport Facility (ECTF)
Possible broadening of the scope of LGTT
2nd of June 2010
European Investment Bank

21. European Investment Bank
Expansion of Investment by Capital Market Institutions
Facilitation of the issuance of bonds through subordinated debt instruments
Senior
Tranche –
Project Bond
Greater availability of subordinated debt tranches could enhance the credit of projects. The size of this tranche would depend on the risk profile of the project/portfolio as the purpose is to uplift the credit profile of the higher ranking senior debt financing to single-A rating
Institutional investors would be interested to invest in the sector. The subordinated tranche could, inter alia, be provided on contingent basis by EIB (subject to its standard credit and other requirements), which would make it similar in structure to LGTT,
Suitable for risk sharing between public and private institutions.
TEN-T budget could contribute to such instrument through risk sharing.
Target rating A/AA
Subordinated
Tranche
Size depends on the project
Shareholder
funding
Normal or elevated level of equity/shareholder/mezzanine debt
2nd of June 2010
European Investment Bank

22. European Investment Bank
Ideas on Future Financing of TEN-T Possible broadening of the scope of LGTT
In order to reach a larger pool of candidate projects, EIB/EC consider that broadening the scope of LGTT to availability-based schemes is worth examination.
This would allow targeting significant investments in the rail and inland waterway projects which are in many cases being procured as availability-payment –based PPPs.
A clear focus would be to introduce even stronger support for TEN-T priority Projects, most of them in the Rail sector, but also including priority projects like SESAR or Canal Seine Nord.
This innovation could substantially open Rail PPPs to Capital Market Financing and provide ground braking solution for difficult multi-national projects like SESAR.
2nd of June 2010
European Investment Bank

23. Guarantee for Availability based Projects Definition / Objectives
Unfunded guarantee instrument designed to enhance the credit of the project.
The unfunded nature provides a supplementary buffer to down sides, as they exceed the project funding and are more cost efficient.
Encourage primarily the bond but also the bank debt financing of TEN-T railway projects
The GAP Facility would:
Improve the rating be assigned to the senior debt/bonds to A, AA-levels;
Consequently
enable certain institutional investors to invest in an asset class that matches their own liabilities;
maximise provided service to institutional investors lacking specialist expertise in the sector, project finance or PPPs
2nd of June 2010
European Investment Bank

24. Improvement of the Coordination of EU Funds
The TEN-T budget and Cohesion Fund are among the most important providers of Community support for the implementation of the TEN-T projects
Their roles, availability, as well as the way they are managed vary substantially.
An improved system of coordination could be envisaged, perhaps based on EC/EIB/National Task Forces
These task forces could i) assists national authorities to make the best use of the available Community resources and ii) oversee and coordinate the implementation of the TEN-T network, ensuring the commitment to individual projects.
2nd of June 2010
European Investment Bank

25. European Investment Bank
Contacts
Thomas C. Barrett, Director
tel:
Jukka Luukkanen, Head of Division
tel
Matthias Woitok, Deputy Head of Division - LGTT
tel:
Institutional and Operational Policies within the EU:
Alfredo Panarella Head of Unit
tel. (+32)(0)
José Brito
Liaison with European Parliament
tel. (+32)(0)
2nd of June 2010
European Investment Bank