EIB financing of climate action
outside the EU
Bert Teuwen
Senior Banker
02/06/2017 European Investment Bank Group 1
Brussels, 18 May 2017
Business opportunities in the framework of Europe's climate
actions outside the EU Seminar

The EIB: the EU bank
02/06/2017 European Investment Bank Group 2
Investing in Europe’s growth
• Created in1958
• Shareholders: 28 EU
Member States
• Driven by EU policy
• Around 90% of lending is
within the EU
• Operates outside EU
through specific Mandates

EIB Group financing in 2016: EUR 83.8bn
02/06/2017European Investment Bank Group 3
Signatures
EFTA &
Enlargement
Countries
EUR 3.35bn
Eastern
Neighbours
EUR 1.65bn
Africa,
Caribbean,
Pacific,
South Africa
EUR 0.77bn
Asia and
Latin
America
EUR 0.98bnSouthern
Neighbours
EUR 1.63bn
European
Union
75. 4bn
Outside EU
8.38bn
EUR EUR
Total EUR 83.8bn

EIB Priorities
EIB financing supports EU policy priorities and objectives
 Climate action is a horizontal objective, i.e. it is integrated in the other priority
objectives.
02/06/2017European Investment Bank Group 4

The Paris Agreement & EIB Climate Action
02/06/2017 European Investment Bank Group 5
The Paris Agreement
• Ambitious mitigation goal
• Country-led NDCs
• Explicit call for climate finance
• (Alignment with EU climate
policies)
EIB’s traditional approach based on
volume (25% target)
Increased focus outside the EU (35%
target)
EIB’s 2015 Climate Strategy
Impact
+
Resilience
+
Mainstreaming
EIB Climate Action

EIB Response: Volume (1)
• EIB has a 25% target towards climate action relative to its overall financing
volume.
• EIB provided >EUR 90bn in climate finance over the last 5 years.
• In 2016, EIB delivered EUR 19.6 bn to specific climate action projects:
 Exceeded the 25% financing target towards climate action.
 Remained the largest MDB in terms of support to climate action.
 EUR 1.9 bn were channeled to developing countries.
02/06/2017 European Investment Bank Group 6

02/06/2017 European Investment Bank Group 7
Total:
EUR 19.6bn
EIB Climate Action Lending 2016
EIB Response: Volume (2)

EIB Response: Increased Focus outside EU
In the lead up to COP-21, the EIB committed to increase its climate finance
for developing countries to 35% by 2020.
02/06/2017 European Investment Bank Group 8

EIB Response: Climate Strategy
Complementing EIB’s volume-driven approach, EIB’s 2015 Climate
Strategy will help implement the Paris Agreement inside and outside the
EU by focussing on three key-areas:
02/06/2017 European Investment Bank Group 9
EIB
Climate
Strategy
Reinforcing the impact of
climate financing
Building resilience to climate
change
Further integrating climate
change considerations across
EIB standards, methods and
processes
http://www.eib.org/info
centre/publications/all/
eib-climate-
strategy.htm

Engaging the Private Sector is Key
 There is no doubt that the bulk of the investment
needed to address climate change will have to
come from the private sector
 As part of its Climate Strategy, EIB will identify
operation types with a particularly high financial
impact and/or high mitigation or adaptation
gains, focusing on:
02/06/2017 European Investment Bank Group 10
 Financial innovation and mobilisation of private
resources.
 Capital markets investors.
 Blending with public funds.
 Increased pipeline of climate action projects
http://www.eib.org/info
centre/publications/all/
eib-climate-
strategy.htm

02/06/2017 European Investment Bank Group 11
EIB lending instrument
For Investment Grade operations
Project
Public Sector
Financing
Project Finance
Direct Loans
Intermediated
Loans
Project Finance
with direct
project risk
Risk Sharing
Equity through
Funds
Banks
EIB special activities
For Low and Sub Investment
Grade operations
What can the EIB do? – Financing Instruments
The EIB has an extensive range of instruments to finance public and private
sectors at investment and sub-investment grades of risk to its disposal.

What can the EIB do? – Innovative Products
02/06/2017 European Investment Bank Group 12
Encouraging private and public sector commitment of
investment, project implementation and management
experience
Enhancing the investment market complements other
initiatives and additional sources of funding (including
institutional investors)
In addition to the more traditional financing products, EIB offers a number of
innovative climate finance products coupled with technical and financial advice to
engage the private sector to achieve:
Flexibility
Leverage Effect
Catalytic Effect
Expertise &
Creativity
Broader eligibility of expenditure and in the use of funds for equity,
debt and guarantee investment
Encouraging private and public sector commitment of investment,
project implementation and management experience
Enhancing the investment market complements other initiatives
and additional sources of funding (including institutional investors)
EIB expertise and rigorous due diligence help meet the highest
standards

How to best engage the private sector?
02/06/2017 European Investment Bank Group 13
1
2
3
4
Do not crowd out other sources of funding
(public and private!)
Enable the private sector to do things that it
otherwise would not be able to do
Focus on leveraging public funds to engage
the private sector
BUT: do not re-invent the wheel
→ many mechanisms already exist!

Project example: Lake Turkana Wind Project - Kenya
 The site, covering 40,000 acres, is located in in northern Kenya.
 The wind farm will have an installed capacity of 310MW and includes 365
turbines, a 33 kV electricity grid system, and a 33/200 kV substation and
related utility services including civil works, housing and buildings.
 The project is on course with full capacity expected to be achieved in June
2017.
 With EUR 625 million project costs this makes it the single largest wind
power project to be constructed in Africa and is, to date, the largest private
investment in the history of Kenya.
 EIB loan of EUR 200 million and EUR 25 million contribution from EU-ITF
(EU-Infrastructure Trust Fund) under Sustainable Energy for All Window
(SE4All).
 This is an example of blending: EIB lending combined with EU funding.
14 European Investment Bank

15
European Investment Bank
Project location

16 European Investment Bank
Wind Turbines and OHL Lines Installation
WTG erection in progress

02/06/2017European Investment Bank 17
Project example: Vientiane Sustainable Urban Transport-
Laos
• Construction of a Bus Rapid Transit (BRT)
system in Vientiane:
 11.5 km of dedicated bus lanes
 21 enclosed stations
 acquisition of 96 new BRT buses,
 which should meet a minimum EURO IV
emissions standard (clean technology).
• The project will also set up a city transport agency and improve pedestrian
facilities near bus stations.
• The project will benefit from an EUR 20 m EIB loan and from TA provided by
the EIB and funded through a EUR 5m grant provided by the EU Asian
Investment Facility.
• As a result of the project, it is expected that bus passengers will save 1.5
million hours per year and local pollutants will be significantly reduced.

02/06/2017European Investment Bank 18
Project example: IIFCL Energy Sustainability & Climate
Action Framework Loan - India
• Framework loan to support renewable energy and energy efficiency
investment projects that contribute to climate change mitigation.
• RE projects eligible for financing include grid connected wind parks, solar PV,
biomass, hydroelectricity and may include transmission lines that evacuate
renewable electricity production. EE projects include electricity transmission
and distribution investments that meet the EIB’s energy efficiency criteria.
• Borrower: India Infrastructure Finance Company Limited (IIFCL), a wholly
government owned entity mandated to provide long term finance to viable
infrastructure projects by extending long-term subordinated and senior loans
as a junior partner of financing consortia led by commercial banks.
• EIB loan = EUR 200 m
• A second phase of this facility is expected to be approved later this year.

•02/06/2017 •19•European Investment Bank
Example fund of funds: GEEREF
The Global Energy Efficiency and Renewable Energy Fund is sponsored by
the European Union, Germany and Norway and advised by the European
Investment Bank Group
GEEREF is a fund of funds that invests in private equity funds which invest on
renewable energy and energy efficiency projects in emerging markets,
thereby further enhancing the leveraging effect of GEEREF's investments.
Launched in 2008 with an initial capital of EUR 112 million
The Fund currently manages € 222 million, which could mobilised over € 10
billion through the funds in which GEEREF participates and the final projects
in which these funds invest.
GEEREF had invested in 13 funds across Africa, Asia, Latin America and the
Caribbean as of May 2017.

•20•European Investment Bank
MGM Sustainable Energy Fund
 GEEREF has committed € 10.0 million to the MGM Sustainable
Energy Fund, managed by MGM Innova Capital LLC
 MSEF is a private equity fund providing equity and mezzanine
financing to projects in the demand-side energy efficiency and
renewable energy sectors in Colombia, Mexico, Central America and
the Caribbean region.
 The fund will seek to invest 70% of its committed capital in energy
efficiency projects (residential sector: consumer financing for green
appliances; commercial sector: hotels, hospitals, other large buildings;
municipal sector: street lighting); and 30% in renewable energy
projects (proven technologies including hydro
expansion/rehabilitation, solar and wind).
Example of GEEREF portfolio

02/06/2017European Investment Bank 21
Project example: FEMIP Sustainable Energy Facility
 FEMIP Sustainable Energy facility aims at providing credit lines to local
Financial Intermediaries (FIs) in Jordan and Morocco to finance energy
efficiency and small renewable energy investments in the industrial, SMEs,
agribusiness, commercial services and residential sectors.
 The project, which is co-financed by the EBRD (Lead IFI), AFD and KfW,
will contribute to the reduction of greenhouse gas emissions and the
enhancement of security of supply.
 EIB loan = EUR 35 m
 So far two intermediary banks:
• Banque Centrale Populaire (Morocco)
• Banque Marocaine du Commerce Exterieur

Thank You!
02/06/2017 European Investment Bank Group 22