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EIB Financing of Renewable Energy David Kerins

European Investment Bank

“A competitive market environment for renewables” – UNECE GERE, 2014

The EU bank

• Natural financing partner

for the EU institutions since

1958

• More than 90% of lending

is within the EU

• Shareholders: 28 EU

Member States

European Investment Bank Group 2

Investing in Europe’s growth

Wide geographic focus

The world’s largest multilateral lender

European Investment Bank Group 3

Our products

We help catalyse investment

European Investment Bank Group 4

LENDING BLENDING ADVISING

Loans

But also:

Equity participation

(Crescent Capital)

Combining EIB finance

with EU budget

(Green for Growth)

Higher risk projects for

innovation (InnovFin)

Prepare & implement

projects (WBIF,

ELENA)

Attracting FUNDING for long-term growth

EIB Energy Lending 2007-2013

European Investment Bank Group 5

2.15 2.56

4.88 6.31

5.57

2.83

4.80 0.21 0.76

1.45

2.37

1.21

0.79

2.10

2.57

5.38

6.07

6.60

4.63

4.10

5.20

2.11

1.64

2.42

2.88

1.39

0.70

0.20

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20.00

2007 2008 2009 2010 2011 2012 2013

Security of supply

Energy Networks

Energy Efficiency

Renewable Energy

7.04

10.34

14.82

18.16

8.42

12.30 12.80

European Investment Bank 6

Investment drivers

General context

• Political support

• Social consensus

• Strategic planning

• Sufficient capacity

of the promoters

Regulatory

Framework

• Predictable

• Stable

• Acceptable profit

Natural and

technical conditions

• Natural resources

• Grid access and

capacity

• Licensing process

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

European Investment Bank Group 7

Financing Facilities

2 main facilities:

• Direct Loans

• Large-scale projects (more than EUR 25m)

• Intermediated Loans

• Small and medium-scale projects (particularly to

SMEs) via national and regional intermediary banks

• Lending decision remains with the financial

intermediary

European Investment Bank Group 8

European Investment Bank 9

Projects example – Green for Growth Fund Southeast

Europe (GGF)

Financing Small-Scale Renewable Energy Projects in the Southeast Europe region including Turkey and the Eastern European Neighbourhood region.

Hydro Power (<30 MW)

Wind farms (<30 MW)

Solar (thermal and photovoltaic)

Biogas / Biomass (no food-crops)

Geothermal Projects

European Investment Bank 10

Projects example – TA under Western Balkan

Investment Framework (WBIF)

Examples of TAs for projects:

1. Irrigation and Hydroelectric Power Scheme Zletovica, HS Zletovica, FYROM;

2. Wind farm Poklecani EPHZHB Bosnia and Herzegovina;

3. Hydroelectric Power Plant Krusevo, EPBIH, Bosnia and Herzegovina;

4. Wind Farm Vlasic, EPBIH, Bosnia and Herzegovina etc.

TA for financing

preparation of Feasibility

study including Technical

Design, Environmental and

Social Impact Assessment

and Tender documentation

for construction works

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Thank you! For more information…

http://www.eib.org/

d.kerins@eib.org

European Investment Bank 12

BACK UP

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EIB’s E&S standards http://www.eib.org/attachments/thematic/environmental_and_social_practices_handbook.pdf

Comply with EU policy, principles, standards and practices, especially the requirements of EU legislation, for the protection of the environment, and satisfy social safeguards

Potential impacts acceptable: public consultation, natural habitats, forestry, indigenous people, involuntary resettlement, child and forced labour, cultural heritage, waterways, climate change

Typical criteria for wind: local development plan / SEA and cumulative impact + impacts on: landscape / visual, sensitive areas, migrating / nesting / feeding birds & bats, fauna & flora species of conservation value, local residents, other impacts from auxiliary facilities

Guidance note: http://ec.europa.eu/environment/nature/natura2000/management/guidance_en.htm

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EIB’s procurement policy http://www.eib.org/attachments/thematic/procurement_en.pdf

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 a 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)

In EU Law on Public Procurement to be complied with Determine whether the project is ruled by public or private sector procurement

Relevant directive concerning competitive tendering on the basis of fair and non-discriminatory terms

Open or restricted procedures with publications in OJEU

Candidate and Potential Candidate

Countries

• EIB can lend up to EUR 9bn with EU guarantee

during 2007-2013

• Pre-Accession Facility

• Priorities:

• Projects supporting accession agreements with EU

• Incorporation and implementation of acquis communautaire

• Loans of EUR 3bn in 2013

• Total loans of EUR 22bn 2007-2013 (excluding Croatia)

25/11/2014 European Investment Bank Group 15

Russia & Eastern Neighbours

• up to EUR 3 848m with EU guarantee during 2007-2013

• Eastern Partners Facility

• Loans of EUR 1.8bn in 2013 for: Small and medium-scale projects implemented by SMEs and mid-caps, Transport, Environmental infrastructure

• Total loans of EUR 4.8bn 2007-2013

25/11/2014 European Investment Bank Group 16