Loans

• Project loans: EIB lends to individual projects for which total investment cost exceeds EUR 25 million; the loans can cover up to 50% of the total cost for both public and private sector promoters, but on average this share is about one-third
  - EIB can also finance multi-component, multi-annual investment programs using a single “framework loan”, which funds a range of projects, usually by a national or local public sector body, most frequently regarding infrastructure, energy efficiency/renewables, transport, and urban renovation
  - Interest rates can be fixed, floating, revisable, or convertible
  - Fees: In certain cases, EIB may charge fees for project-appraisal, legal services, commitment, non-utilization, etc.
  - Most of EIB’s loans are in EUR, but it can also lend in GBP, USD, JPY, SEK, DKK, CHF, PLN, CZK, and HUF, as well as in a few other currencies
  - Repayment is normally on a semi-annual or annual basis; grace periods for capital repayment may be granted for a project’s construction phase
• Intermediated loans: EIB makes loans to local banks and other intermediaries which subsequently on-lend to the final beneficiaries, such as SMEs, medium-sized enterprises (midcaps), large businesses, local authorities, national administrations, and public sector bodies
  - Loan conditions can be flexible in terms of size, duration, structure, etc.
  - On-lending decisions remain with the intermediary institutions, which also retain the financial risk of the on-lending
  - Under intermediated loans, EIB normally has no contractual relationship with the final beneficiaries, although final beneficiaries need to be informed about EIB involvement

Blending Instruments

• Structured finance: EIB can provide a structured finance facility using a mix of the following instruments:
  - Senior loans and guarantees incorporating pre-completion and early operational risk
  - Subordinated loans and guarantees ranking ahead of shareholder subordinated debt
  - Mezzanine finance, including high-yield debt for SMEs experiencing high-growth or undergoing restructuring
  - Project-related derivatives
• Guarantees and securitization: EIB provides guarantees for senior and subordinated debt in both small and large projects, either in standard form or as a debt service guarantee similar to that offered by monoline insurers
  - Beneficiaries can be large private and public projects or partner intermediaries providing financing to midcaps"
• Project Bond Credit Enhancement (PBCE): Takes the form of a loan from EIB, with the support of the European Commission and is given to the promoter at the outset
  - It may also take the form of a contingent credit line which can be drawn upon if the revenues generated by the project are not sufficient to ensure senior debt service
  - The PBCE underlies the senior debt and therefore improves its credit quality

Other Products

• Venture capital: Managed by the European Investment Fund (EIF), this activity is focused on establishing a venture capital ecosystem in Europe, working with venture capital funds (acting as intermediaries) that invest in innovative high-tech SMEs in their early growth phases
• Venture debt: EIB commits capital for the long run, allowing companies to focus more on growing their business rather than constantly seeking out investors
  - Financing is not dilutive and is complementary to equity investments
  - Can commit venture debt from EUR 7.5 million up to EUR 50 million
  - Repayment periods of 5 years with 2 to 3-year availability periods
  - Hands-off approach with no direct involvement in daily management
• Microfinance: EIB can either directly invest in financial institutions, such as microfinance institutions (MFIs) and banks, or indirectly in microfinance investment vehicles (MIVs), such as funds or microfinance groups
  - Medium/long-term loans to financial institutions
  - Direct equity investments in financial intermediaries
  - Equity and debt investments in MIVs that in turn provide debt and/or equity to financial institutions
  - The EIB group can also provide technical assistance via grants

Equity and fund investments

• EIB-EIF Co-Investment Facility: A joint instrument between the two entities, investing equity and hybrid debt alongside top-rated, EIF-backed venture capital/private equity and mezzanine fund managers into European SMEs and mid-caps
  - The facility is fully funded from the EIB, with a backing provided by the European Fund for Strategic Investments (EFSI), the central pillar of the European Commission’s Investment Plan for Europe
• EIB also offers technical and financial advisory services to its clients, complementing its EIB loans and strengthening the economic and technical foundations of an investment