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24-May-17 1 The EIB Group Providing finance and expertise for sound and sustainable investment projects Leading developer of risk financing for innovative SMEs 24-May-17 2 The EU bank • Natural financing partner for the EU institutions since 1958 • Around 90% of lending is within the EU • Shareholders: 28 EU Member States Investing in Europe’s growth 24-May-17 3 EIB Offices • European Union • Headquarters in Luxembourg • 14 external offices in the EU • Outside the European Union • • • • Enlargement countries: Belgrade, Istanbul, Ankara EU Eastern neighbours: Kiev, Moscow Mediterranean partner countries: Cairo, Tunis, Rabat ACP and OCT: Santo Domingo, Nairobi, Sydney, Tshwane (Pretoria), Dakar • Asia: Beijing (2013) 24-May-17 32 324 The EIB: capital breakdown 24-May-17 5 The EIB at a glance • Largest multilateral lender and borrower in the world • Raise our funds on the international capital markets • Pass on favourable borrowing conditions to clients • Some 440 projects each year in over 160 countries • Headquartered in Luxembourg and 30 local offices • Around 2 400 staff: • Not only finance professionals, but also engineers, sector economists and socio-environmental experts • More than 50 years of experience in financing projects 24-May-17 6 2013/2014 - Total lending and staffing Peer group of MDBs 24-May-17 7 EIB Group track record: almost EUR 500bn lent since 2008 24-May-17 8 EIB Group lending in 2014 24-May-17 9 Lending outside EU in 2014: EUR 8bn (EIB signatures) 24-May-17 10 Our products We help catalyse investment LENDING BLENDING ADVISING Loans Combining EIB finance with EU budget (Project Bond Initiative) Prepare & implement projects (JASPERS) But also: Guarantees (trade financing) Higher risk projects for innovation (InnovFin) Support for public/private partnerships (EPEC) Equity participation Attracting FUNDING for long-term growth 24-May-17 11 EIB project cycle We support sound and sustainable projects 24-May-17 12 Benefits of an EIB loan • Benefits of low cost of funding passed on to clients: • • • • • Large amounts Broad range of currencies Long maturities Attractive interest rates Catalyst for participation of other banking or financial partners 24-May-17 30 13 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 24-May-17 313131 31 European Fund for Strategic Investments (EFSI) 24-May-17 15 Mobilising new investment EFSI EIB Group 24-May-17 16 2014 Borrowing activity EUR 61.6bn: distribution of EIB bond issues by region 24-May-17 17 EXTERNAL LENDING MANDATES The role of the EIB outside the EU is to finance investment projects in support of : EU policy objectives, complementing the EU’s external assistance policies, programmes and instruments in the different regions, and continuously adapting its activities to developments in EU policies With a view to supporting EU external action, the European Parliament and of the European Council has granted the EIB an external mandate including an EU guarantee against losses for corresponding projects outside the EU. 24-May-17 18 EIB operations in Asia 24-May-17 19 European Investment Bank EIB LENDING IN ASIA AND LATIN AMERICA (ALA) A bit of History … Operations in ALA started in 1993 Until 2006 the remit was to support EU presence through loans to: - Subsidiaries of EU companies - EU/ALA joint ventures - Transfer of EU technology EIB provided long-term financing and political risk guarantee (Risk-Sharing) 24-May-17 20 European Investment Bank 20 EIB LENDING IN ALA Evolving objectives … Since 2007: • Support of EU presence • Environmental sustainability From 2011: • Environmental sustainability • Social and economic infrastructure • Local private sector EU Support no longer a sufficient criteria but a desirable side effect 24-May-17 21 European Investment Bank 21 EIB LENDING IN ALA Breakdown by Activity Global loans 16% Agriculture, Forestry and Fishing 8% Industry 9% Transports 19% Services 2% Energy 41% Water, sewerage 5% 24-May-17 22 European Investment Bank 22 EIB LENDING IN ASIA Asian Countries eligible for EIB financing under the ALA Mandate • Asia: 22 eligible countries Bangladesh, Bhutan, Brunei*, Cambodia, China, East Timor, India, Indonesia, Iraq*, Laos, Malaysia*, Maldives, Mongolia, Myanmar, Nepal, Pakistan, the Philippines, Singapore*, South Korea*, Sri Lanka, Thailand, Vietnam, Yemen. * No Framework Agreement signed 24-May-17 23 European Investment Bank 23 EIB LENDING IN ASIA At end-2014, the Bank has lent: EUR 5.35 billion via 73 loans in 15 Asian countries 58% to Private and 42% to Public Sector PUBLIC PRIVATE 24-May-17 24 EIB LENDING IN ASIA Country distribution Thailand 2% Maldives Nepal 1% 1% Laos 1% Mongolia 1% Pakistan 4% Bangladesh 4% China 39% Indonesia 4% Sri Lanka 5% Philippines 6% Viet Nam 13% India 19% 24-May-17 25 European Investment Bank 25 Lending in ASIA has proved lucrative: • For EU Companies • Long term funding at AAA conditions • Free political risk guarantee • For the ASIA countries • Employment creation • Transfer of technology • Foreign exchange income • Fiscal inflows • Poverty alleviation 24-May-17 26 European Investment Bank 26 RELEVANCE OF ASIA FOR THE EIB CLIMATE CHANGE ACTION • By 2030 ASIA will emit more than half of the world’s GHG emissions • ASIA includes the most vulnerable areas and the countries with hugest renewable energy and carbon credit potential • The unit cost of reducing GHG emissions in ASIA is much lower than in Europe 24-May-17 27 European Investment Bank 27 EIB LENDING IN ASIA IN 2014 • In the Year 2014, the Bank has : • Signed EUR 605m - IREDA RENEWABLE ENERGY AND ENERGY EFFICIENCY FL (EUR 200m) - IIFCL ENERGY SUSTAINABILITY & CLIMATE ACTION FL (200m) - SBI LOAN FOR SMES AND MID-CAPS (100m) - DHAKA ENVIRONMENTALLY SUSTAINABLE WATER SUPPLY (100m) - ULAANBAATAR WWS (50m) 24-May-17 28 EIB LENDING IN ASIA INDIA 24-May-17 29 Projects signed in INDIA as of today (EUR 1,07bn) POWERGRID (30m) EXIM BANK OF INDIA FRAMEWORK LOAN (150m) VOLKSWAGEN INDIA (100m) EXIM BANK OF INDIA CLIMATE CHANGE FL (150m) SREI CLIMATE CHANGE FL (40m) IREDA RENEWABLE ENERGY AND ENERGY EFFICIENCY FL (EUR 200m) IIFCL ENERGY SUSTAINABILITY & CLIMATE ACTION FL (200m) SBI LOAN FOR SMES AND MID-CAPS (200m) 24-May-17 30 The Impact of the Union Budget 2015-16 on EIB’s lending • The Union Budget in tandem with Railway Budget seems to have laid out a well thought out plan for the future. • The Union Budget 2015-16 makes a clear case for pushing up public investment whereas the Railway Budget 2015-2016 proposes a multi-pronged approach to make Railway journey safe and secure and comfortable for passengers. • Banking Sector: i) Decision to incentivize credit card transactions coupled with a new law on black money will clearly lower the social cost for unaccounted money ii) The other positive steps include the proposal to frame a Bankruptcy Law and a Dispute Settlement, which has been a long standing demand from Bankers. iii) Alignment of NBFCs at par with financial institutions will allow banks to clean up their balance sheets by selling stressed assets at an early stage. iv)NBFCs registered with the RBI and having asset size of INR 5 bn (74.5 m EUR)and above to be considered as financial institution‟ under SARFAESI Act, 2002, enabling them to fund SME and mid-corporate businesses. v) New scheme for depositors of gold to earn interest and jewellers to obtain loans on their metal accounts. vi) To improve governance of PSBs, FM has proposed setting up autonomous Bank Board Bureau for helping lenders raise capital for meeting expansion needs. 24-May-17 31 The Impact of the Union Budget 2015-16 on EIB’s lending • Infrastructure and construction: The Union Budget 2015-16 is largely positive for the infrastructure sector. The Budget gave infrastructure development a boost by allocating funds to rural development activities. Along with this, the road and railway sector was injected with an investment to the tune of EUR 3,7bn, thereby improving the awarding activity in the sector • Railway Budget proposed a number of measures. It seeks resource mobilization for higher investment, decongestion of heavy haul routes and speeding of trains and project delivery, better passenger amenities and safety, and to make railways a preferred mode of transport for masses. • Energy sector: EIB priority lending is in the clean energy sector, so the Bank see a lot of potential. There has been a push for the renewable power. 24-May-17 32 Thank you! Ms Sunita Lukkhoo Regional Manager, South Asia More information: [email protected] Tel. : +352 4379-86564 24-May-17 33