European Investment Bank

The Luxembourg-based EIB is the European Union’s house bank, owned by the EU member states, and aims to aid the implementation of EU policies. By annual lending volume it is bigger than even the World Bank. Most of its lending takes place within the EU and it usually finances projects larger than EUR 25 million or lends money through commercial banks when it wants to target smaller projects. But the EIB’s external lending mandate also allows it to finance projects across the world, and it is here that most controversies have arisen, as the bank has found itself out of its depth in projects such as the Bujagali dam etc. etc. Having made a major mistake by getting involved in the Sostanj lignite power plant project in Slovenia, in mid-2013 the bank took a significant step forward in its environmental performance by virtually halting its lending to coal projects. Therefore we do not consider it likely that the EIB will finance coal projects in the future, however it may be involved in other harmful projects.

For more information, see also the Counter Balance coalition’s Citizens’ Guide to the EIB available in English, Polish, Czech, Slovak, German, Spanish, French, Italian and Russian.

POLICIES

The EIB, like other multilateral public banks, has its own set of policies on environmental and social standards and fraud. Its Statement on Environmental and Social Principles and Standards is further explained in its Environmental and Social Practices Handbook. All its projects must be in line with these standards, which are based on EU standards but adjusted to suit the bank’s work. These include provisions on, for example, biodiversity protection and resettlement. Also, all EIB projects must be in line with national legislation of the country where the project is situated. The bank has a transparency policy which obliges it to answer requests for information usually within 15 working days, so you should get a response to your communication.

The EIB staff assesses projects to see whether they meet the bank’s conditions long before the public knows that the bank is interested in the project. Once the bankers are relatively sure about the project, they are supposed to publish information about the projects in project summaries on the EIB website before the bank’s board of directors approves them. Sometimes other information such as an environmental impact assessment is published earlier. Unlike the EBRD, the project summary doesn’t state when the project is due to be approved by the bank’s board of directors, however it is known that by the time a project summary is published, the project is in the latter stages of consideration, so you need to move very fast. You are more likely to convince the bank not to finance a project if you catch it at an early stage, so it is good to take a pro-active approach and ask the bank whether it has been requested to finance a project.

The EIB communicates mostly in English, French and German, but translates some key documents into all EU languages. If you communicate in another language, it may be better to contact Bankwatch (main@bankwatch.org) or another NGO to help you with the communication with the bank. The EIB has a few offices in its countries of operation, but not in every country.

When you communicate with the EIB, the bank is more likely to take your comments seriously if you can show that a project violates the bank’s environmental and social statement or its anti-corruption policies – Bankwatch may be able to help with this. Try to include clear evidence as much as possible and to show what sources of information you are using to support your arguments. If you are not sure about something, you should not hesitate to contact the bank, but better to ask questions than to make accusations straight away. In your communication, try to avoid general statements such as ‘there is corruption in this project’ or ‘this project damages the environment’ – rather explain in more detail why you think there is corruption or in what way the project will damage the environment. If you have a lot of points to make, think carefully how to structure the your communication so that the most important points are clear at the beginning. There is a danger that important points can be lost in a mass of information.

If you are not satisfied with the bank’s response to your questions or comments, the EIB has a Complaints Mechanism which you can appeal to. This will not stop the project in itself, but it can result in recommendations about what should be done to rectify the problem. After approaching the complaints office, the EU Ombudsman can also be approached regarding EIB operations if the problem can be presented as a case of ‘maladministration’.

If the problem is related to corruption or fraud it should not be reported to the Complaints Mechanism but to a separate body, the Inspectorate General. The European Anti-Fraud Office, OLAF, is also able to investigate allegations of corruption related to the EIB if a complaint to the Inspectorate General does not bring adequate results.

CONTACTS

The following links provide contacts for the EIB:

Local office addresses

Requests for information on projects

Juan Manuel Sterlin Balenciaga, Deputy Head of Division, Corporate Responsibility and Civil Society Division: sterlin@eib.org

Complaints officecomplaints@eib.org

To contact the Board of Directors, who give final approval to projects, contact Bankwatch, main@bankwatch.org, for help.

The main NGOs working on the EIB are:

Bankwatchmain@bankwatch.org

The Counter Balance coalitionxavier.sol@bankwatch.org

 

CASE STUDIES

Sostanj lignite thermal power plant unit 6, Slovenia

Far from being a cheap source of energy, Slovenia’s scandal-ridden new 600 MW lignite unit has doubled in cost and looks set to run at a loss of EUR 50 million per year.

Read the case study »