1 31122021 EIB Sustainable finance Adina Relicovschi Deputy

1 31/12/2021

EIB – Sustainable finance Adina Relicovschi, Deputy Technical Adviser Environmental, Climate and Social Office, Projects Directorate December 2018

Overview Sustainable Finance – at the heart of the EIB; Responsible and Sustainable Investment – how EIB finances a sustainable future; Responsible Guidance – how we ensure sustainability of our operations; Focus Topics: the circular economy, economic resilience, natural capital, gender in lending. 31/12/2021 3

EIB at a glance The EU's bank: The EIB is the European Union's longterm lending bank set up in 1958 by the Treaty of Rome, headquartered in Luxembourg. It is the only bank owned by and representing the interests of the 28 EU Member States and works closely with other EU institutions; the finance and assistance we provide contribute towards the achievement of EU policy goals. A major player: is the largest multilateral lender and borrower in the world with, a record number of, 901 approved operations (2017) in more than 160 countries. 31/12/2021 4

2017 in figures EIB EIF EUR 69. 9 billion EUR 9. 3 billion supporting EUR 250 billion of total investment 31/12/2021 5 European Investment Bank Group

2017 in figures EUR 13. 9 billion for innovation and skills (enabling 7. 4 million very high speed digital connections) 16. 6 EUR billion for environmental objectives (providing safer drinking water for 23 million people) 31/12/2021 EUR 29. 6 billion for micro, small and medium-sized enterprises (supporting 287, 000 companies employing 3. 9 million people) EUR 18. 0 billion for infrastructure (powering 10. 4 million households) 6

Sustainable finance – at the heart of EIB Sustainability: Ø In our operations: environmental and social impact of the operations and transactions that EIB supports in its lending, investment and advisory activities – any operation should meet one or more EU policy objectives for supporting smart, sustainable and inclusive growth; Ø Through due diligence: all project supported must meet EIB e&s standards; economic appraisal (assess costs and benefits taking into account all resources needed); carbon footprint exercise (estimate and report on GHG emissions). 31/12/2021 7

Sustainable finance – at the heart of EIB Green & Sustainability Awareness Bonds: Ø EIB pioneer role in green bond market (2007): one of the largest issuers of green bonds with more than EUR 23 billion of Climate Awareness Bonds issued; Ø First Sustainability Awareness Bond: 06/09/2018 launch date (EUR 500 m) demonstrates the EIB’s firm commitment to unlocking finance for high impact projects in sustainable sectors beyond climate. 31/12/2021 8

Sustainable finance – at the heart of EIB Green & Sustainability Awareness Bonds: Ø Sustainability Awareness Bond: initial focus on water projects (water supply, sanitation and flood protection) and expected expansion to other sectors: § sustainable use and protection of water and marine resources; § transition to a circular economy, waste prevention and recycling; § pollution prevention and control; § protection of healthy ecosystems. 31/12/2021 9

Responsible and inclusive lending Ø Support for SMEs: is a public policy goal of the EIB. In order to finance micro, small and medium-sized companies, the EIB typically use an intermediated business model. Financial contracts are signed between the EIB and their intermediaries, who commit to finance underlying SMEs. Ø Different nature of e&s due diligence: focuses on the capacity and capability of the intermediary to manage the e&s aspects, including an assessment of the adequacy and the effectiveness of the ESMS the intermediary has in place. Ø New standard on FI : to be approved in 2019. 31/12/2021 10

Responsible and inclusive lending Ø Environment: is a public policy goal of the EIB and includes financing for projects fostering environmental protection (including the protection or enhancement of the natural resources and actions taken against degradation), renewable energy, energy efficiency, water and waste management, and sustainable transport. Ø Climate action: is a cross-cutting objective. In 2017, EIB signatures for climate action stood at EUR 19. 4 billion, representing more than 28% of our total financing across all areas of activity, thus successfully meeting our target of devoting more than 25% of our financing each year to climate change mitigation and adaptation activities. 31/12/2021 11

Responsible Guidance Ø Meeting key environmental and social standards: § The EIB Statement on Environmental and Social Principles and Standards (2009) sets the policy context for protection of the environment and human well-being in our projects. § The principles and standards are further explained and developed in the EIB Environmental and Social Handbook - ten standards that must be met by any investment, technical assistance or advisory project that is undertaken by the EIB. 31/12/2021 12

EIB Environmental and Social Standards An integrated Approach Understanding operations in the context of wider global drivers: Human Rights, Climate Change, Biodiversity – these are integrated and cut across all EIB activities and practices The E&S Principles are operationalised by the 10 E&S Standards and complement the financial and economic criteria in the appraisal of projects Aligned with other IFI E&S Standards apply to both public and private sector and to all regions

Responsible Guidance Ø Transparent project cycle: § The outcome of the EIB environmental and social due diligence is summarised in an Environmental and Social Data Sheet as part of EIB commitment to transparency. Project-related environmental documents are available in the Public Register on EIB website. § Climate mainstreaming: the carbon footprint of EIB projects (absolute and relative emissions) and the annual report. 31/12/2021 14

Focus topics Ø Circular economy: § EIB financing is available for circular economy projects on account of their environmental, resource conservation and climate benefits and can also contribute to the EIB’s innovation objective, since such projects often include innovative features for products, production processes or business models that drive innovation. Circular economy projects implemented by small and medium-sized companies (SMEs) can also be eligible for EIB financing. In addition to financing, the EIB provides advisory support to circular economy project promoters. 31/12/2021 15

Focus topics Ø Circular economy – relevant sectors: § Waste management sector: more ambitious recycling targets that drive developments and investments in new separate collection infrastructure and related treatment facilities for recyclable materials and biowaste. The goal will be to do more with regard to quantities and do better with regard to qualities of material. § The circular economy idea applicable to other, related areas: water sector, agriculture and forestry value chain, industrial production. 31/12/2021 16

Focus topics Ø Natural Capital: § The new Natural Capital Financing Facility (NCFF) – a joint initiative of the European Commission and the EIB – supports projects that protect and promote biodiversity and climate adaptation with targeted loans and investments. 2017 saw the first loan signed under the programme. § The NCFF provides funding to projects that promote the conservation, restoration, management and enhancement of natural capital for the benefit of biodiversity and adaptation, including ecosystem-based solutions to challenges related to land, soil, forestry, agriculture, water, and waste in the European Union. 31/12/2021 17

Focus topics Ø Natural Capital Financing Facility: consists of a combination of the following two components: § the finance facility provides financing from EUR 2 million to EUR 15 million, § the technical assistance facility gives every project a grant of up to EUR 1 million for project preparation, implementation and the monitoring of outcomes. Ø The first loan was signed in April 2017 - EUR 6 million to Rewilding Europe Capital (REC) and is expected to provide support for over 30 nature-focused businesses across Europe. These investments could also boost the populations of iconic and endangered European wildlife species. 31/12/2021 18

Advisory and Technical Assistance Ø Advisory services complement the EIB’s lending activity and form an integral part of EIB ‘lending, blending and advising’ strategy, by making technical and financial expertise available to the clients to develop and implement investment projects and programmes, and to improve institutional and regulatory frameworks. Ø Project-related technical assistance contributes to improving the quality of lending operations throughout the project cycle and enhancing their development impact (mainly in the non. European projects), focusing on: § Financial sector operations, notably microfinance support and SME lending; § Infrastructure projects, notably in the water and wastewater, ICT, transport and energy sectors. 31/12/2021 19

Me. HSIP Results in a Nutshell Indicator Results (September 2018) EUR 8. 1 M Total TA grants mobilised through Me. HSIP (2015 -2018) Fund-raising Expected TA funds in 2018/19 Technical Assistance Investment Volumes CAMENA : 4. 0 m, MED 5 P : 0. 7 m, GEF : 0. 1 m SSF EU Delegations : 0. 7 m EIB-ERI : 2. 6 m USD 5. 0 M (GEF) Projects identified and/or prepared 24 Projects with on-going TA studies 8 Total potential investment volume EUR 2. 9 billion Volume of investments already mobilized EUR 1. 1 billion (EIB financing EUR 563 m / Co-financing EUR 554 m)

Me. HSIP – Lessons learned Ø Programme duration (3 years) was not sufficient to cover the full cycle of project preparation and exploit all the project opportunities identified; Ø Mobilisation of senior experts in HQ and in local country offices provided for great efficiency in deciding about projects selection and preparation; Ø Need for readily available TA grants for funding of preparatory studies and for fast track procurement approaches (e. g. framework contracts) to minimise administrative delays; Ø Alignment of regional programmes with EU Delegation priorities should be enhanced. 31/12/2021 European Investment Bank Group 21

Contacts Thank you relicovs@eib. org European Investment Bank 100, bd. Konrad Adenauer L-2950 Luxembourg www. eib. org