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What is the EIB? The EIF?

The EIB Group

1. The European Investment Bank
1.1 The statutes of the EIB
1.2 Structure and administration
1.3 Goals and activities


2. The European Investment Fund
2.1 The statute of the EIF, reformation
2.2 Structure et administration
2.3 Objectives and activities

Next: The funds allocated by the EIB group

1. The European Investment Bank

1.1 The statutes of the EIB

Created in 1957 but to be distinguished from a Community institution, the IEB is the financial organisation of the European Union.
Its goal (article 267) " The Bank facilitates the financing of investments related to investments in Structural Funds and other financial tools of the Community ."
It has held its sitting in Luxembourg since 1968.

1.2 Structure and administration

Who decides ?
The Board of Governors is made of the Finance Ministers of each Member State. It defines the general guidelines of the credit policy, approves the balance sheet and the annual report, decides of the capital increase and nominates the members of the Board of directors, the Managing Committee and the Verification Panel.
The Board of Directors is made of 25 Directors and 13 substitutes. They are high representatives of the Finance and Economic Ministers, executives of Banks and credit institutes. It checks the conformity of the Bank administration with the provisions of the Treaties, the statutes and directives of the Board of Governors. It defines the allocation of the loans and guarantees, the conclusion of borrowings and posts the interest rates of the loans.

Who manages?
The Managing Committee is made of the Bank president and 7 Vice-presidents. It monitors the management of ordinary business, prepares the decisions of the Board of Directors and ensures them to be carried out.

Who monitors ?
The Verification Panel is made of 3 members nominated by the Board of Governors for their skills in public financial and accounting audit. It controls the regularity of the operations and of the Bank outgoing books and their conformity with the accounting rules and principles. It gets support from the internal Audit department and an international external audit office .

Internal structure
The Bank has seven Directorates and a body of technical advisers: general administration, 2 Directorates in charge of the Community financing, financing outside the Community, Finance and Treasury, Studies, Legal Affairs.

Contacts at the EIB
http://www.bei.org/pub/contact.htm
EIB offices in Europe :
http://www.bei.org/pub/eibadr.htm


1.3 Goals and activities

As a non-profit organisation, the EIB belongs to the 15 Member States of the European Union and grants long-term loans for investment projects fostering the application of the Community policies.

The EIB collaborates with the Member States and the other Community institutions.

Within the Union : it finances investment projects which promote the balanced development of the different Member States integration.
Outside the Community boarders : it contributes to aid policies and financial cooperation applied by the Union to foster the sustainable economic development of the third countries.
Most of the loans allocated to the third countries support the projects that tie the links with the Community, improve the living conditions and foster the co-enterprises gathering local operators and companies of the European Union.

Characteristics :
The IEB clears like a bank and gets its financial resources on the capital markets to finance projects. The excellent note of the EIB (its bonds are always scored with a AAA) refers to the reliability of its credit policy and its financial operations, the quality of its loan portfolio and the good capital base of its owners, the Member States that subscribe the capital.
The turnover has increased so that it is nowadays the greatest multilateral financial institution and the biggest non-sovereign borrower in the world.

The different kinds of loans :
There are two kinds of loans:
· The direct individual loans for the big projects of more than 25 million Euros.
Rate: fixed, resetter or variable
Period: from 4 to 18 years with a possible repayable after the period
Contact : send your application for loans directly to the EIB
· The indirect loans for the small and middle investments.
Procedure : the EIB grants global loans to banks and financial intermediaries that lend this money to the projects coordinators (companies or local authorities)
Criteria established by the EIB according to the localisation, the structure of the company, the project..…
Rate : variable depending on the project and the lending entity
Contact : send your application to the local financial authorities.

Cooperation with the banking organisations
Thus, the EIB closely collaborates with the banking sector for its activities on the capital markets as for the loan allocation. This cooperation is indispensable for the EIB so that it:
· Contributes to the financing of numerous individual projects, sometimes using intermediation
· Can request for adequate guarantees to subsidy individual private projects, the third of the granted guarantees is made by banks or financial institutions.
· Can take up its role as a catalyst, in the implementation of solid pools, allowing the financing of projects at the best rate and period conditions , thanks to its experience in the project evaluation calling for long-term grants.
· Contributes to the amelioration of the SMEs' financial environment and of the promoters of projects of small or medium infrastructure through global loan allocations to the banking sector.

This indirect and decentralised financing mechanism for investments on a small or large scale was elaborated in order to satisfy the needs of the SMEs or local authorities. In the third countries, the EIB collaborates with national or European commercial banks, multilateral or bilateral financial institutions or even the Community institutions operating on the European budgetary funds or the Member States.
The EIB will keep on cooperating with these institutions in order to:
- Foster the most efficient financial package,
- Share the risks
- Ensure coordination and complementarity between different partner financial institutions.

Banks and financial intermediaries within the European Union:
http://www.bei.org/loans/int_eu.htm#France
Banks and financial intermediaries outside the European Union:
http://www.bei.org/loans/int_neu.htm#ACP

The EIB, partner of the institutions
The importance of its contribution in the implementation of the essential Community policies has triggered the development of relationships with the European Parliament and the will of the Parliament to integrate the works of the EIB into the evaluation and the achievement of the Union objectives. There is also a closer cooperation with the Commission in all the fields covered by the Bank. For instance, a cooperation agreement was signed in order to strengthen the complementarity of the Banks operations and the support measures of the Community budget for the structural actions and the preparation for enlargement for the period 2000-2006. Other example : the agreement dated 6 June 2001 between the Commission and the EIB for Research .

News Welcomeurope :
http://www.welcomeurope.com/news_fr/stimul_rech&innov.asp


2. The European Investment Fund

2.1 The statute of the EIF, reformation

Creation :
After the European Council of Edinburgh conclusions, that had foreseen the creation of a European Investment Fund, a conference gathering representatives of the Member States governments has carried an act finalising the protocol on the Bank's statutes, which allows the Community to become one of its member and to share its capital.
The capital of the Fund is subscribed by its members.

Reformation of the statutes:
In March 2000, the shareholders of the European Investment Fund approved a reformation of the institution on 20 June 2000, in order to make of the EIF the subsidiary of the EIB Group specialised in capital-venture. The structure of the shareholders body is tripartite and includes the EIB as the major stakeholder (60,75%), the European Community represented by the European Commission (30%) and a great number of banks and European financial institutions (9,25%).
The EIF acts independently and commercially under market conditions. It targets appropriate return for its shareholder.
The EIB tranferred all its activities of capital-venture to it. The EIF is now able to coordinate all the activity in the field of capital venture in all the European Union supporting the implementation of the Community objectives.
The EIF also holds its sitting in Luxembourg.

2.2 Structure et administration

The Fund has almost the same institutional structure as the EIB (General Assembly, Supervisory Board and Financial Committee).
This new kind of relationship between the EIB and the EIF will allow to target the activities in highly specialised fields with a better efficiency and will strengthen the catalyst effect of the Group within the European banking and financial Community in favour of the SMEs.
In the frame of groups' synergism, the EIB has pursued working on some administrative tasks in order to allow the EIF to operate more efficiently. The Governors of the EIB have authorised the Bank to release up to 2 billion Euros from its management results for the capital-venture activities to be concluded by the EIF by 2003.

2.3 Objectives and activities

Main activity: capital venture
The EIF shall subsidy the innovative and job creating SMEs through capital venture within the Union and 12 candidate countries.
It shall also seek to anticipate the market evolutions.
Its investments shall focus on the "early stage" financing:
Ÿ Development capital notably in the case of "e-migration" investments, aimed at the dissemination of innovation among all SMEs
· Funds focused on specific industries or technologies (i.e. biotechnologies, agrobusiness, "enabling technologies, nanotechnologies )
· Regional Funds
· Funds financing the exploitation of research and development results
· Pan-European Funds
· On a pilot basis, funds fighting against social exclusion through micro-credit

Guarantee instruments
They constitute the other financing tool for European SMEs, which the EIF has at his disposal (SME Guarantee Facility, Growth and Environment Facility).

Long-term objectives
On the basis of these concrete experiences with market operators, the EIF should become a driving force in terms of proposal and reflection. In order to optimise its role in the definition and implementation of the Community policies in which it is involved, the Fund will:
· Develop a capacity of analysis of the venture capital market in order to anticipate its trend, to be reactive and to play fully its catalytic role
· Propose appropriate initiative as far as new instruments for SMEs are concerned, in close cooperation with its share holders or other partners. Such an exercise could notably be undertaken to define instruments tailored for the media and audiovisual sector (content industry), the fight against social exclusion…

Transfer of know-how is an important part of its activity, either towards the less developed regions of the Union or to the Applicant countries. The EIF shall develop a high-level communication policy, targeted in particular at Specialist circles..


Next: The funds allocated by the EIB group

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