What is the full form of EIB?

Introduction

European Investment Bank (EIB) is an international finance Agency that consists of 27 European member states. These states fund various projects and investments.

These members contribute to the EIB concerning their GDP ratio. In past years it funded around 200 billion euros for Covid-19 recouping and around 65 billion euros in more than 700 projects in 2021. Its maximum contribution was green climate projects and the economic growth of the EU. It is the largest investor in green projects.

Establishment and Overview

The European Investment Bank (EIB) was established on 25 March 1958 in “Brussels” by “the 1957 Rome Treaty of the European Economic Community (EEC). In 1968 its headquarters shifted to “Luxembourg”. Since its foundation, it has invested more than one trillion euros in various projects in Europe, Asia and Africa in green projects. It has more than 3000 employees and two satellite offices in Brussels and Abidjan. “Dr Werner Hoyer has been president of EIB since 2012”. Earlier it invested only in infrastructure projects.

Membership and Governance

The European Investment Bank has had 27 members since January 2007. EIB board members have one president, vice-president and board members from the European Union Commission.

• All the EU countries are members of the EIB and the contribution of members is according to their GDP ratio.

• The decision in the EIB is taken by the Board of Governance, the Management Committee and its board members.

• There is an audit committee in EIB that looks into the functioning of EIB.

Objectives and Functions

The objective of EIB is to contribute to the development of the EU internal market, modernise it and fund in all sectors of the economy for development.

• It works for the promotion and development of Europe and other underdeveloped regions.

• It funds the development of underdeveloped regions.

• The focus areas of EIB investment are the protection of climate and environment, innovation and skill development, infrastructure, cohesion, etc.

• It is the prime investor in climate action and environmental sustainability.

• The EIB’s European Investment Fund (EIF), provides funds to small and medium enterprises through venture capital and micro or risk finance.

• The initiative of EIB is to construct a link between business and economies and people.

• EIB cherishes the potential of the public and private sector in their circular transition in the economy.

Projects and Activities

The EIB has invested in thousands of projects since 1959. The project financed by the EIB must comply with the standard of environmental, technical and social. It makes decisions for lending based on the priority of the project.

• It also ensures the project is financed and protects the community's interest.

• EIB has financed more than 700 projects in 2021 with around 95 billion euros.

• Apart from this, it has lent 50 billion euros to member states in infrastructure, SME, innovation, skill development, clean energy etc.

• During the covid-19 pandemic, it has lent around 28 billion euros and additional 200 million euros for recovery from the pandemic.

• EIB has contributed to the agriculture, health, and infrastructure sectors.

• It has finance activities that work for climate change as per the Paris Climate Change Agreement for reducing carbon footprint.

• It expects EIB to contribute 1 trillion euros in climate action and environmental sustainability projects by 2025.

Conclusion

The European Investment Bank (EIB) is an investment entity owned by the 27 members of the European Union state. The EIB aims to finance member states, other states and non-profitable projects for sustainable growth and development. It finances local banks, startups, and climate and environment projects, for their growth and development. The focus areas of EIB are climate and environment, infrastructure, innovation and skill, and SME projects.

FAQs

Q1. What is EIF and how does it work?

Ans: The European Investment Fund (EIF) was formed on 25 May 1994. It has the major share of EIB. It finances small and medium enterprises through venture and finance. It works in all the EU countries. It funds innovative companies which are seeking finance.

Q2. What is EIB global financing in 2022?

Ans: In 2022 the EIB had financing increased by 1.98 billion euros from 7.2 billion to 9.18 billion. Its investment in sub-Saharan Africa is 28 % of the total 2022 investment. It has also supported Ukraine with 1.7 billion Euros along with 668 million loans to SMEs, 1.05 billion in infrastructure, and

Q3. How much has EIB invested in climate and Environment sustainability financing?

Ans: EIB has invested around 36.5 billion euros in climate and environmental sustainability in 2022. It is 58% of the total EIB investment in 2022. EIB is the main finance of the Climate Action and environmental sustainability plan.