The European Investment Bank (EIB) announced an emergency financial assistance of €250,000 (approximately Rs 2.2 crore) to support India’s response to the COVID-19 crisis.

The donation will go to UNICEF Luxembourg, Red Cross International and Malteser International to acquire life-saving equipment in particular to improve access to oxygen including oxygen generation plants as well as the procurement of oxygen cylinders urgently needed across India.

Investment in metro rail

The EIB and India’s finance ministry also signed €300 million (approximately Rs 2,673 crore) for the construction of new metro lines in Kanpur and Pune. 

The EIB had approved a total loan of €600 million euros to fund the Pune Metro Rail project. The finance contract for the first tranche of €200 million euros was signed on July 22, 2019.

To date, the EIB has invested €2.6 billion in urban metro systems in Bhopal, Kanpur, Pune, Lucknow and Bengaluru.

New EIB–SBI partnership 

The EIB and the State Bank of India signed a cooperation agreement to support €100 million of clean energy, energy efficiency, water and circular economy investment by Indian business through the new NEEV II investment fund.

The initiative will be managed by SBICAP, a subsidiary of SBI, and will allow innovative and growing Indian companies to use equity finance to accelerate sustainable investment and climate action.

European Investment Bank

• The European Investment Bank was created in 1958 by the Treaty of Rome as the long term lending bank of the European Union. 

• Founded in Brussels in 1958, the EIB moved to Luxembourg in 1968.

• The task of the Bank is to contribute towards the integration, balanced development and economic and social cohesion of the EU Member States.

• The EIB is jointly owned by the EU countries. 

It seeks to:

• Boost Europe’s potential in terms of jobs and growth.

• Support action to mitigate climate change.

• Promote EU policies outside the EU.

• All EU countries are shareholders in the EIB. 

• As an independent body, the Bank takes its own borrowing and lending decisions. 

Decisions are taken by the following bodies:

• The Board of Governors, comprising mostly finance ministers from all EU countries. It defines general lending policy.

• The Board of Directors, chaired by the EIB president, which comprises 28 members appointed by the EU countries and one appointed by the European Commission. It approves lending and borrowing operations.

• The Management Committee, the Bank’s executive body, which handles day-to-day business.

• It makes borrowing and lending decisions, based on the merits of each project and the opportunities offered by financial markets. Within the EU, it has specific lending priorities. Outside the EU, it supports the EU development and cooperation policies worldwide.

• The EIB raises substantial volumes of funds on the capital markets and lends these funds on favourable terms to projects furthering EU policy objectives. 

• It makes long-term finance available for sound investment in order to contribute towards EU policy goals.

• The EIB works closely with other EU institutions — especially the European Commission, the European Parliament, and the Council of the EU — to foster European integration, promote the development of the EU and support EU policies in over 140 countries around the world.

The EU’s ‘climate bank’

• Since 2012, the EIB has provided €197 billion of finance supporting over €670 billion of investment in projects that protect the environment, reduce emissions and help countries adapt to the impacts of climate change.

• In June 2019, the European Council invited the EIB to step up its activities in support of climate action. The EIB responded in November 2019 with a new climate strategy and energy lending policy.

• The EIB has committed to align all its financing activities with the goals of the Paris Agreement. Most notably, the EIB will increase the share of investments under its ‘climate action and environmental sustainability’ priority to 50 per cent by 2025. The EIB will stop financing fossil fuel projects from the end of 2021.

The EIB’s new energy lending policy, which will govern its activities in the energy sector, is based on five principles:

• Prioritising energy efficiency with a view to supporting the new EU target under the EU Energy Efficiency Directive.

• Enabling energy decarbonisation through increased support for low or zero carbon technology, with the aim of achieving a 32 per cent renewable energy share throughout the EU by 2030.

• Increasing financing for decentralised energy production, innovative energy storage and e-mobility.

• Ensuring the grid investment that is essential for new, intermittent energy sources like wind and solar, as well as strengthening cross-border interconnections.

• Increasing the impact of investment to support energy transformation outside the EU.

EIB and India

Since the beginning of its operations in India in 1993, the European Investment Bank has supported 26 projects in the country and invested close to €3.3 billion in transport, energy, agriculture, fisheries and forestry projects as well as India’s small and medium enterprises.

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