EIB Rem Annual Report 2014 en

2014
Report on results
outside the EU
Table of contents
Foreword
Reporting results
Introduction
10
22
Access to finance
Strategic infrastructure
34
Climate action
42
52
54
59
Regional integration
Annex 1:
ReM
Framework ratings
Annex 2:
List of projects
signed in 2014
Annex 3:
Tables, figures
and boxes
Foreword
Foreword
from
by
thethe
President
President
n 2014, the EIB continued to strengthen its role as

a leading financer of sound investment projects in
the countries neighbouring the EU and around the
world. 92 new projects worth nearly EUR 8bn were
signed in 2014. We expect these projects to help
provide some 4 million people with improved water
supplies or sanitation and to produce enough electricity to serve 1.5 million households, the great majority from renewable sources of energy. Through intermediary financial institutions, we expect to help
around 13 000 small and medium-sized enterprises
and around 23 000 microenterprises to gain better access to the finance they need, helping to sustain some
450000 jobs.
Tracking results like these is really important to fulfilling our role in supporting EU external policies
and development objectives. To do this effectively
we use the Results Measurement (ReM) Framework,
which we introduced in 2012. This is used to complement our existing due diligence and monitoring,
to enhance project appraisal, the tracking of results
ReM Report 2014
achieved and how we report on the results of our investments. Alongside results, it also helps us to track
the difference that EIB involvement makes the additionality that goes beyond the alternative of pure
market financing.
Being at the heart of Europe, it is sometimes forgotten that EIB activity spans the globe with an enormous
range of very diverse projects that promote EU external policies and development objectives in very many
different ways. In the Africa, Caribbean and Pacific region, for example, we approved EUR 1bn in funding
that will have a strong focus on the energy sector and
on promoting local private sector development. Energy projects 100% from renewable energy sources
will produce enough new electricity supplies to give
870 000 households access to electricity, with 45000
households being directly connected by projects.
235000 people are expected to benefit from improved
water supplies while improved access to finance for
small businesses will help to sustain 75 000 jobs, including through over 11 000 microfinance loans.
Foreword
by the President
In Asia and Latin America, the water and transport sectors were the main focus of the EUR 1.5bn
in EIB lending. In So Paolo, Brazil, for example, the
new metro trains we are financing will benefit some
1.7million passengers in the city, every day. Water
and wastewater treatment projects in Bangladesh
and Mongolia will improve the supply of safe drinking water for around 2.5 million people.
In the Eastern Neighbour countries, where we lent
EUR1.2bn, helping small businesses to maintain jobs
and grow was a key focus, with 1 800 loans by intermediaries expected to help sustain 79 000 jobs. A
critical widening of a rail tunnel in Ukraine will enable 4.3 million tonnes more cargo to be carried by rail
between the country and its EU neighbours. Indeed,
our lending to Ukraine more than doubled over 2013
in response to the critical economic situation in the
country. This also included innovative projects in the
agriculture sector that will help the region adapt to climate change by coping better with harvest volatility.
In the Mediterranean region, our lending has nearly tripled to EUR 1.7bn, supporting the region in the
wake of the political upheavals of the Arab Spring.
Lending to Tunisia alone has risen more than fivefold to EUR 570m. We are helping to build or refurbish 369 schools in the country to enable 36 000 more
students to be enrolled, to help tackle youth unem-
ployment and improve the long-term economic prospects of the country. Lending in the region will also
increase electricity supplies from renewable energy
sources by 1 423 GWh/year, enough to serve 320 000
households. Modernising electricity generation from
gas will achieve another 1 400 GWh/year in energy efficiency gains.
Finally, in the pre-accession countries, we lent
EUR2.5bn, with a strong focus on local private sector development. Credit lines are expected to help almost 10 000 businesses employing 219 000 people
gain better access to finance. We also supported two
R&D projects in Turkey that will contribute both to local economic diversification and to cross-border R&D
cooperation with the EU.
At the EIB, we know how important it is to be able to
track results and the difference we make throughout
the project cycle. We also recognise how important
it is to be able to report on results. This report aims
to provide a structured overview of the results of our
operations outside the EU. We are proud of how we
serve the Union in pursuing its objectives in its neighbourhood and around the globe. I am very happy to
share through this report what this means in practice.
The EIB is about achieving concrete results in the real
economy. This holds true for our operations outside
as much as it does inside the EU.
Werner Hoyer
2014 ReM Report
Reporting results
Expected results:
3 787
GWh/year new
renewable energy
supply, potentially serving
1.2
million
households
2.6bn (32%) supporting climate

change mitigation and adaptation,
through 26 projects
EUR
7.9bn
4.7bn (59%) supporting economic
and social infrastructure, through 49 projects
Expected results:
ate change
million people
with improved
water supply or sanitation
1.7
million passengers
benefiting daily from improved rail transport

onal integration
omic and social infrastructure
4
ReM Report 2014
Reporting
results
Expected results:
13 000
23 000
SMEs and mid-cap

companies and
First ex post results from credit lines

approved under the ReM Framework
show that
microenterprises with
improved access to finance,
helping to sustain
105 000 jobs
were sustained
through loans to
SME + Climate Change
(EUR 2.8bn)
SMEs and mid-caps through
8 projects in Turkey, Serbia
and FYROM
450 000 jobs
3.3bn (41%) supporting access to finance

for local private sector development, through 53 projects
EIB additionality
Long-term loans:
20
41%
years
on average for infrastructure
of projects benefiting from

technical assistance
2.1bn (26%) supporting

regional integration, through 26 projects
Facilitating cross-border mobility, trade,
collaboration and convergence
2014 ReM Report
Introduction
Promoting sustainable growth
globally
utside the EU, the EIB invests in sound projects

that promote sustainable and inclusive growth.
Whether in pre-accession countries and the EUs
immediate neighbourhood, in the African, Caribbean
and Pacific countries or in Asia and Latin America, the
EIB works to support EU external policies and development goals.
The EIB uses its Results Measurement (ReM) Framework to track project results, the contribution that
projects make to the Banks objectives, and the difference that EIB involvement makes the additionality that goes beyond the alternative of pure market
financing. The ReM Framework does not replace our
due diligence and monitoring but is used to complement and enhance project appraisal, monitoring, reporting and the ex post evaluation of projects.
This report focuses on project results, and the difference that the EIB can make. It describes the new
projects that the bank financed in 2014, the results
that are expected and the additionality we have been
able to offer, in order to show why the Bank has funded these projects.
This report also looks back at completed projects,
to review the actual results achieved. This year is
the first year in which some projects approved under the ReM framework (introduced in 2012) have
reached completion, allowing systematic reporting
of ex post results for these projects. However, as the
number of projects completed under the framework
is still limited, this report also includes case studies
of completed projects that were approved before
2012, examining results achieved through a ReM
framework lens.
Agreement and under dedicated facilities for ownrisk lending (Figure 1). The External Mandate covers
68countries and/or territories in four regions: preaccession countries; the EU Southern and Eastern
Neighbourhood and Russia (MED and EAST); Asia and
Latin America (ALA); and the Republic of South Africa.
The Cotonou Partnership Agreement covers operations in the 78 ACP States.
All EIB lending outside the EU supports one or
both of two key objectives: local private sector
development and the development of social and
economic infrastructure. Many projects also support
two cross-cutting objectives: climate change mitigation and adaptation, and regional integration. The
over-arching objective of the Cotonou Agreement
is to reduce and eventually eradicate poverty, in line
with the objectives of sustainable development and
the gradual integration of the ACP countries into the
global economy.
New projects financed in 2014

In 2014, the EIB signed financing contracts for 92 new
projects outside the EU. Total approved EIB financing
for these new projects is EUR 7.98bn. This amount is
helping to mobilise a further EUR 13.9bn in finance
from other sources to enable total investments of
EUR21.9bn to take place.
EIB objectives
These new projects are those for which the first financing contract was signed in 2014. For each of
these projects, the full approved financing volume
is reported. This covers both the amount signed in
2014 and any outstanding amount due to be signed
under future contracts. Likewise, for each new project,
the full total investment cost and the full expected results are reported.
The EIBs lending beyond the EU is guided by objectives set by the EU or the Member States. These are
given in the External Lending Mandate, the Cotonou
The largest number of new projects was like last

year in the Africa, Caribbean and Pacific (ACP) region. Projects in this region tend to be relatively
ReM Report 2014
Introduction
Figure 1
EIB objectives outside the EU
Local private sector

development
Development of social
and economic
infrastructure
Climate change mitigation
and adaptation
Enhancing access to finance,

particularly for SMEs and
microenterprises
Responding to strategic
infrastructure needs
in sectors such as energy,
transport, water, urban
development, education and health
Climate action on renewable energy,

energy efficiency,
sustainable transport,
sustainable use of natural
resources and climate resilience
A cross-cutting objective,
small in financial terms, but have a very high impact

in terms of social and economic development and
the difference they make to peoples lives. In terms
of funding volume, the pre-accession region was
again the most significant, a region that is particularly important in relation to EU regional integration
objectives.
New projects were almost evenly split between local private sector development and the development of social and economic infrastructure. In terms
of approved lending volumes for these projects, 59%
(EUR4.7bn) is supporting infrastructure development
while 41% (EUR3.3bn) is supporting private sector development. This represents a slightly stronger focus on
strategic infrastructure development relative to last year.
Thirty-two percent of approved lending for new projects, or EUR 2.6bn, is supporting the cross-cutting
objective of climate change mitigation and adaptation, an increase over last year. These are mostly infrastructure projects, but also include some climate-
improving links amongst
partner countries and with the EU
focused credit lines supporting local private sector

projects. One quarter of total lending is supporting
regional integration, both through infrastructure development and through support for local private sector access to finance.
To avoid double counting of project results, followup contracts signed under projects that have already
been reported in previous reports (because earlier
financing contracts were signed under them in previous years) are not reported here. However, for the
sake of transparency a breakdown of 2014 lending
volumes, including the volume of such follow-up
contracts, is given in Table 1. Further lending details
are given in the following chapters and a full list of
projects, including follow-up signatures, is given in
the Annex.
This methodology is different from that used in the
previous report, which reported total signatures. For
this reason lending volumes and project counts may
not always be strictly comparable.
2014 ReM Report
Figure
Figure
2 2
New
projects
in 2014,
region
New
projects
in 2014,
byby
region
23 (EUR 2.5bn)
29 (EUR 1bn)
Total: 92
(EUR 7.9bn)
17 (EUR 1.7bn)
11 (EUR 1.5bn)
12 (EUR 1.2bn)
ACP
ALA
EAST
How we measure results

EIB lending is results-driven. Outside the EU we use
the Results Measurement (ReM) Framework not
only to strengthen the appraisal process, but to enhance the Banks ability to monitor the actual results
achieved, tracking results throughout the project cycle. It thereby complements the EIBs core due diligence and monitoring process.
At the outset clear sector-specific, standardised and
measurable indicators are identified. And projects
are rated according to three pillars (Figure 4). Baselines and targets are set to capture expected economic, social and environmental outcomes of the
operation.
MED
Pre-accession
Figure 3
New projects in 2014 - Contribution to mandate objectives
3.3bn (41%)
supporting access to
SME + Climate Change (EUR 2.8bn)
finance for
local private sector
development, through
53 projects
2.6bn (32%)
supporting climate
change mitigation and
adaptation,
through 26 projects
Total:
92 projects
EUR
7.9bn
Climate change
4.7bn (59%)
supporting economic
and social
infrastructure,
through 49 projects
2.1bn (26%)
supporting
regional integration,
through 26 projects
SMEs
Regional integration Note: Many projects support more than one objective. Climate action and regional integration are cross-cutting objectives.
Economic and social infrastructure
ReM Report 2014
Introduction
Performance against these benchmarks is monitored

throughout a projects life and reported at two major
milestones. For direct investments, results are reported at
project completion and again three years after completion. For intermediated operations results are reported at
the end of the allocation period (credit lines) or at the end
of the investment period (equity funds). Equity fund results are reported again at the end of the funds life.
Insofar as possible ReM indicators have been harmonised with those of other international financial institutions, European development finance institutions
and EU development agencies to simplify client reporting requirements for co-financed operations.
We continue to be actively engaged in working with
these partners to further improve coordination and
harmonisation of results indicators.
Table 1
2014 lending volumes (EUR m)
ACP
New projects (first signed in 2014)
Older projects
(first signed
before 2014)
Funding approved
Contracts signed
in 2014
Volume to be
signed
Contracts signed
in 2014
1 021
1 018
150
Total contracts
signed in 2014
1 168
ALA
1 540
1 370
170
1 370
EAST
1 178
1 176
1 176
MED
1 750
1 548
202
116
1 664
PA
2 491
2 011
480
425
2 436
Access to finance
3 280
2 955
325
303.5
3 259
4 699
4 167
532
387.5
4 554
Climate action
2 576
2 162
414
300
2 462
2 103
1 750
353
141
1 891
Total
7 980
7 122
858
691
7 813
Note: Republic of South Africa is included under ACP.
Figure 4
ReM Framework
Pillar 1
checks eligibility under EIB mandates and rates the

contribution to EU and country priorities.
Pillar 2
rates the quality and soundness of the operation, based

on the expected results.
Pillar 3
rates expected EIB financial and non-financial additionality in relation to the market alternative.
impacts
outcomes
outputs
inputs
Additionality = EIB inputs market alternative
2014 ReM Report
Access to finance
A dynamic private sector, in which entrepreneurs are able to obtain finance to
implement sound business investments, is vital for job creation and inclusive growth.
Indeed, access to finance is an important constraint on growth, private sector
development and social inclusion in developing and transition countries.
First ex post results from

credit lines approved under the
ReM framework show that
105 000 jobs

were sustained through
loans to SMEs and midcaps through 8 projects in
Turkey, Serbia and FYROM
New projects in 2014 will help
13 000 SMEs
and mid-cap companies and
23 000
microenterprises to gain access to

finance, helping to preserve
450 000 jobs

10
ReM Report 2014
he EIB supports local private sector development

in a number of ways: credit lines to local financial intermediaries to modernise banking systems
and support lending to SMEs; participation in private
equity funds to provide expertise and risk capital to
high growth potential companies; credit lines and
equity finance for microfinance providers to support
access to finance and basic financial services for the
poorest; and direct loans to larger companies where
this is critical to realising wider developmental benefits, particularly job creation.
In 2014, the EIB signed financing contracts for 53 new
projects that will support local private sector development. Total approved EIB financing is EUR 3.28bn.
Of the 53 new projects in 2014, 33 are credit lines
supporting SMEs, while seven support microfinance
through credit lines, equity investments with microfinance institutions or microfinance investment vehicles. Five support access to finance and expertise
through private equity funds. Eight direct financing
operations support local private sector development,
of which three are infrastructure projects (reported in
the Strategic Infrastructure chapter).
Taken together, credit lines and investments in private
equity funds will help 13 000 SMEs and mid-caps and
23 000 microenterprises gain access to finance. This
is expected to help sustain around 450 000 jobs in
these businesses. Direct loans to industry investment
projects are expected to create over 1 000 permanent
jobs and 6 150 person-years of employment during
project implementation.
Access to finance
2014 also saw the completion of the first projects

approved under the ReM framework in 2012. These
were credit lines for SMEs in the Pre-Accession (PA)
region. In total these credit lines have provided over
1 000 loans, helping to sustain 105000jobs in the
beneficiary companies.
Supporting access to credit for

SMEs and mid-caps
Lending to SMEs and mid-cap companies through
credit lines to local financial intermediaries is important to enhance access to longer-term funding for
small businesses, to create and sustain jobs, particularly in mid-caps, and to strengthen local financial
sectors. Small and medium-sized businesses often
have great growth potential but face financing constraints because of their size and information asymmetries, such as a lack of credit history.
By providing funds to entrepreneurs to start new
businesses or expand their existing business, credit
lines can help create employment, extend and improve services for customers, contribute to export
earnings and foster competitive local markets. In
many contexts, improving access to formal funding
may help the transition of informal enterprises into
the formal sector, something which has further impacts on standards and access to credit.
Thirty-three new SME credit lines in 2014 are expected to enable intermediaries to make 13 000 loans to
final beneficiary businesses, helping to sustain some
400 000 jobs. These loans, 96% of which will go to
SMEs, are expected to have a total value of EUR 2.9bn.
A number of credit lines have a strong focus on very
small enterprises, particularly in the agricultural sector. SMEs are defined as having less than 250 employees (the EU definition), but the average number of
employees per SME financed is 19.7.
These credit lines will also extend the maturities of
the loans offered by financial intermediaries to SMEs
and mid-caps, with the average loan tenor (weighted
by loan size) expected to be 5.5 years. This will more
closely match the economic life of investments than
the maturities typically available to SMEs in developing contexts. For example, the Financial Sector LoanIII
Figure 5
Figure
5
Contribution
of new projects to local
private sector
development
Contribution
of new
projects to local private
by type
of operation
sector
development
by type of operation
100%
74
39
90%
443
7
80%
70%
60%
50%
2 400
40%
30%
33
20%
10%
0%
Amount (EUR m)
Number of projects
Credit lines for SMEs and mid-caps

Direct loans
Microfinance credit lines and equity
Private equity
2014 ReM Report
11
in Ghana is expected to extend maturities from an average of 1 year to about 4.5 years.
These expected results are reported just for the EIB-financed amount, and not for the matching funding provided by each promoter. The aggregate expected results of both sources of funding have been stated in
previous reports. The figures presented here are therefore lower than those presented previously, but this
does not reflect a real change in outcomes or impact.
Many credit lines have a particular impact on the development of local financial sectors and their capacity
to support private sector growth. They may enhance
competition by supporting a second-tier bank in expanding its market presence, help extend the range
of products offered or enable banks to target currently underserved groups.
One project in French Polynesia, for example, aims to
attract 80% first-time borrowers, as well as targeting
small investment projects involving the environment,
Box 1:
Overcoming finance bottlenecks in Mexico

Mexicos 4.1 million SMEs account for more than half of the countrys GDP and for 80% of employment in enterprises. Nonetheless,
less than 35% of these firms have access to a bank loan or credit
line. Bottlenecks that prevent small businesses from getting essential credit include high interest rates, short tenor periods, excess bureaucracy and strict guarantee requirements from banks.
The EUR 150m Mexico Global Loan for SMEs and mid-caps will
help address the issues of availability and maturity of funding for
these companies by providing long-term funding to Banco Santander (Mexico) S.A., which will pass on this funding advantage
through EUR 300m in lending to companies in sectors such as
manufacturing, services, health and social services, and tourism.
The project will be beneficial to entrepreneurs with limited working capital and will give them the opportunity to expand their
businesses. Furthermore, by making some entrepreneurs less dependent on informal sources of financing, the project may lead
to a more level playing field for smaller businesses in the country.
Figure 6
Credit lines supporting SMEs and mid-caps new projects overview
# operations 33
Approved EIB finance EUR 2.9bn
Expected outputs
SMEs
Mid-caps
Other
All
Expected outcomes
Total loans (EUR m)
1 878
838
178
2 895
Total loans #
12 664
325
236
13 225
Average loan size (EUR 000s)
148
2 579
754
Average loan tenor (years)
5.7
5.4
4.9
Jobs sustained (total):
407 457
in SMEs
250 291
219
in mid-caps
128 593
5.5
other
28 573
Number of operations
Increasing access to finance for underserved markets
Increasing access to finance for first-time borrowers
11
Financing second-tier bank, improving competition

Lending in local currency
12
7
13
Supporting introduction of new products
Supporting lending in a shallow market
14
ReM Report 2014
Supporting development of local

financial sectors
Increasing access to financial
services for underserved segments
Access to finance
Table 2
Credit lines for SMEs, expected results by region
Expected outputs
ACP
ALA
EAST
MED
PA
Number of projects
12
12
Total loans (EUR m)
345
350
545
170
1 485
Total loans #
760
720
1 810
207
9 728
454
486
301
821
153
6.3
10.4
8.8
8.0
5.1
Figure 7
Private equity new projects overview
# operations 4
Approved EIB finance EUR 64m
Expected outputs
Expected outcomes
Total fund size (EUR m)
533
Number of investee companies:
56
Average leverage ratio:
8.4
Average investment (EUR m):
8.4
Net creation of permanent employment:
energy and waste treatment. The SBI Loan for SMEs

and mid-caps in India will focus on financing in underserved rural areas, primarily agricultural SMEs.
In terms of regional spread, the largest number of
new credit line projects are in the ACP and Pre-Accession regions, although the most important regions
by lending volume are the Pre-Accession and Eastern
Neighbours regions. Lending volumes have generally
increased, except in the Eastern Neighbours region,
where lending has declined considerably since last
year as a result of instability in that region.
Extending the availability of

private equity financing
Private equity funds are specialised in meeting the
needs of start-ups and high growth potential compa-
44 500
nies for risk-absorbing finance. They complement this

finance with professional expertise to help investee
firms make a breakthrough to long-term financial sustainability and growth.
Four new private equity participations were signed
in 2014. Together these will invest EUR 65m in funds
worth EUR 531m, which will in turn invest in 56 companies. The net creation of employment during the
period of these investments is expected to amount
to around 44 500 jobs. This figure particularly reflects
the high expected employment outcomes for the
Novastar social impact fund (Box 2).
As an example, the Abraaj North Africa Fund II pools
EUR 5m of EU budget resources and EUR 15m from
the Agencia Espaola de Cooperacin (via a partnership agreement) to support the growth of midmarket companies established in North Africa. This
2014 ReM Report
13
Box 2:
Novastar private equity for social impact

The Novastar Ventures East Africa Fund aims to back early-stage businesses led by entrepreneurs with the capability and ambition to transform low-income consumer markets by addressing proven demand for basic goods and
services with innovative business models. Education, healthcare, financial services, small agri-businesses, access to
food, water or critical information are among the Funds priority sectors. For example, Novastar is backing the Paradigm Projects investment in the distribution of EzyLife fuel-efficient stoves that save half the fuel (and attendant
time and cost) needed for traditional stoves, whilst eliminating 75% of toxic smoke emissions.
The Fund also targets m-Farm, a company started by three Kenyan women seeking to create an SMS-enabled commodity exchange for smallholder farms. Another investee company provides sanitation facilities to a large number
of slum dwellers while offering micro-business opportunities to local entrepreneurs and enhancing environmental
sustainability by converting waste into organic fertiliser. Another is creating a network of low-cost primary schools
in the poorest areas that are projected to serve 500 000 pupils and employ 15 000 staff if the company reaches expansion stage. Novastars objective is to generate around 40 000 jobs in 20 investee companies and to bring wider
benefits to approximately 2 million poor and very poor individuals.
Social Impact Funds like Novastar are not set up to maximise financial returns, but social returns. Although a positive financial return is aimed for, they involve higher risks than normal funds. The EIBs USD 10m investment in the
fund under the Impact Financing Envelope constitutes critical risk-absorbing finance, giving entrepreneurs the financial space they need to develop innovative solutions to the problems faced by the poorest. As early as 2011, the
EIB was the first major financing institution to assist Novastar in designing and structuring the fund, and the Banks
support has had an important effect in catalysing the interest of other investors.
14
ReM Report 2014
Access to finance
funding will be leveraged by a factor of nine by the

EUR180m fund. It will invest in 12 companies to create an estimated net total of 2 500 permanent jobs.
The contribution of another fund (Portland Caribbean) to regional integration is described in Box 20.
In 2014, the EIB also signed an equity participation

in First National Bank in Lebanon (not included in
Figure7). This will enable this second-tier bank to
extend financing to an additional 680 SMEs.
Figure 8
Microfinance new projects overview
# operations 6 microfinance credit lines

1 Microfinance Investment Vehicle (MIV) participation
Approved EIB finance Credit lines: EUR 35m
Equity investment in MIV: EUR 15m
Expected outputs
Expected outcomes
Loans to final beneficiaries (#):
22 789
Loans to final beneficiaries (EUR m):
56
Average loan size (EUR):
5 823
Women as % of final beneficiaries:
69%
Total MIV fund size (EUR m):
61
MF institutions supported (#):
Leverage ratio:
Loans to final beneficiaries by supported

MF institutions (#):
Jobs sustained in final beneficiaries

(including self-employed):
48 630
10
780 000
Box 3:
Supporting a new microfinance institution in Tunisia

The EIB is supporting the establishment of a new microfinance provider, Taysir, in Tunisia, a country that is
relatively underserved by microfinance, with only one established provider. This goes hand-in-hand with the
policy of the Tunisian government to create a well-regulated environment that is conducive to microfinance
providers in the country.
A EUR 1m loan is being provided under the FEMIP Trust Funds impact investing envelope for higher-risk and
higher-impact projects. This will enable Taysir to lend an average of EUR 1 500 to 670 micro-entrepreneurs
by the end of the drawdown period. 70% of these are expected to be women while 40% are expected to be
first-time borrowers. By providing a subordinated, long-term, local currency loan at favourable pricing, the EIB
is helping Taysir to become established and attract additional sources of finance. EIB requirements will also
mean an accelerated implementation of good market practices in fields such as anti-money laundering, client protection principles and environmental standards. The establishment of Taysir will help to diversify the
financial sector and extend access to finance to groups such as young micro-entrepreneurs and small farmers.
2014 ReM Report
15
Box 4:
Supporting R&D for cleaner, safer vehicles

A EUR 55m loan will support a EUR 115m R&D project to improve the environmental performance
and safety characteristics of vehicles. Tofas, an automotive manufacturer based in Turkey and coowned by the Fiat Chrysler Group, will focus on
improved fuel efficiency and safety, electric vehicle technology and components development,
fuel storage systems and advanced manufacturing processes.
EIB funds will help address financing constraints
often encountered with R&D because of the high
degree of uncertainty inherent in this type of investment. An additional 75 engineers will be hired
by Tofas, which also expects to be able to increase
patent applications and carry forward its collaboration agreements with 11universities across
Turkey and Europe.
Supporting microenterprises
Arguably the most severe financial constraints are
faced by micro-entrepreneurs, particularly women and
those in rural areas that tend to be particularly underserved by financial systems. Microfinance combines social and economic development objectives to extend
access to basic financial services to secure and improve
livelihoods and drive development from the ground up.
In 2014, seven new microfinance operations included six credit lines to microfinance providers and one
equity participation in a microfinance investment vehicle (MIV). Credit lines supported microfinance providers in the ACP and Mediterranean regions (three
each). They will have a strong focus on women (69%
of expected beneficiaries) and are expected to help
sustain over 48 000 jobs in beneficiary microenterprises, including many self-employed persons.
A EUR 15m investment in Advans SA Sicar, meanwhile, will help this MIV to equip 10 affiliated microfinance institutions, predominantly in the ACP region,
with the necessary financial resources and management capabilities to reach financially underserved
populations through an expected 780 000 loans.
16
ReM Report 2014
A credit line to Microfund for Women is the EIBs first

intervention in the Jordanian microfinance sector. In
this instance, the EIB is supporting a well-established
institution with a very strong focus on women (95%
of more than 100 000 borrowers). It is one of the few
microfinance institutions in the region providing
micro-insurance services on a large scale, therefore
further contributing to improving living conditions
amongst the poorest, through the cover of life and
health risks. In Tunisia, by contrast, the EIB is supporting the establishment of a new microfinance institution, Taysir (Box 3), in a relatively underserved market.
Direct loans for local private

sector development
Direct loans to large companies also support local private sector development, particularly where investment activities have positive knock-on effects for the
local economy, regional integration or the environment. Public funding is important to ensure that such
investment with positive externalities takes place.
Examples of such projects in 2014 include two R&D
projects by Turkish manufacturers, in line with the priorities of the Instrument for Pre-Accession for Turkey
(Box 4). They will contribute to both local economic diversification and cross-border R&D cooperation,
supporting the creation of the Euro-Mediterranean Innovation Space (EMIS). Another project with a
Turkish ethylene manufacturer is expected to have
positive effects on local downstream industries. In
Ukraine, two projects will enhance local grain storage and processing capacity, which is seen as important for enhancing resilience to the effects of climate
change (Box 18). Direct loans to industrial projects in
2014 are expected to create 1 027 permanent jobs
and 6 150 person-years of temporary employment
during implementation.
Completed projects: results

achieved from completed credit
lines
The EIBs Results Measurement framework was introduced in 2012 to guide both ex ante appraisal and,
eventually, monitoring and ex post evaluation. In
Access to finance
Table 3
Ex post results for eight credit lines
Results achieved
All SMEs
Micro
Small
Medium
Mid-caps
All
Total loans (EUR m)
527
56
163
307
183
710
Total loans #
937
204
421
312
74
1 011
562
275
388
984
2 473
702
Average investment size (EUR 000s)
863
458
593
1 692
4 164
1 179
4.9
6.1
4.6
4.9
4.4
4.8
53 888
1 783
12 308
39 797
51 656
105 544
Jobs sustained
2014, the first operations approved under the ReM

framework reached completion. The results of the
ReM Project Completion Reviews for these operations
are presented here.
These eight completed operations are all credit lines
for SMEs in Pre-Accession countries: 5 in Turkey,
2in Serbia and 1 in the former Yugoslav Republic of
Macedonia (FYROM). Credit lines usually reach completion in a much shorter time than infrastructure
projects. Also, considering the level of experience of
the financial intermediaries in the Pre-Accession region, signature and disbursement processes can be
relatively fast. The operation in FYROM is described in
more detail in a case study below.
Results achieved: These eight operations helped to
sustain over 100 000 jobs in the beneficiary companies, approximately half of which were in 74 mid-caps
(Table 3). In total, EUR 710m was lent through just
over 1 000 loans that went overwhelmingly to SMEs,
the companies that are typically confronted with the
most severe credit constraints. In accordance with
lending criteria in the Pre-Accession region, intermediaries also undertook to provide additional matching
funding to other SMEs.
production facility for a polyester manufacturer, both

in Turkey.
Additionality through extended maturities: The
average tenor of the loans provided to final beneficiaries was 4.8 years. For microenterprises, the average tenor offered was as much as 6.1 years. These are
much higher durations than SMEs and mid-caps are
typically able to obtain in these markets and will have
helped the beneficiary companies to carry out longterm investments in machinery and equipment, for
instance that raise productivity but require a longer
payback period.
Were the results what we expected? Overall, these results match the Banks expectations for these operations. However, some indicators were underestimated
and others overestimated. This partly reflects hard-topredict economic circumstances, such as demand for
loans from different types of companies. For example,
the number of jobs sustained in final beneficiaries was
larger than expected. The number of loans, by contrast,
was overestimated, with the average loan size being
somewhat larger than expected. The average tenor
of the loans to final beneficiaries was actually slightly
longer than expected. This is valuable information that
will help the Bank to refine its ex ante estimations.
Manufacturing was the sector that benefited most,

with 38% of total lending. This was followed by the
wholesale and retail sector (35%) and transportation
(9%). Investment projects financed included a smallscale hydropower plant in Macedonia, as well as new
machinery for a small food processing business and a
2014 ReM Report
17
dy :
u
t
s
e
s
a
ms
c
r
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t
f
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e
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a
o
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f
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n
a
Completed
n
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f
ity
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E
I
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AfricInve
n 2008, the EIB invested EUR 20m in the private equity fund AfricInvest II. Based in Tunis, AfricInvest II
targets African firms with a good local market position and high growth potential, enabling these firms
to seize opportunities to expand. With a hands-on
approach to monitoring investments, it adds value
by strengthening management teams; by improving
corporate governance, reporting and transparency;
and by capitalising on AfricInvests extensive network
throughout Africa.
Leveraging the EIBs EUR 20m with EUR 123m from
other sources, AfricInvest II has invested in 15 companies across North, West and East Africa in insurance, pharmaceuticals, oil and gas services, telecoms
and agribusiness. According to the latest results,
these businesses have been able to expand successfully, with turnover increasing 37% on aggregate to
EUR803m. Employment has increased 42% on aggregate to reach 6 678 jobs. AfricInvest has also contributed to significant improvements in ESG standards,
including in terms of working conditions and environmental aspects.
One investee company was Mansard Insurance in

Nigeria. In a country where only 1.1% of the adult
population have some sort of insurance, AfricInvests
support has been important in helping Mansard to
expand and diversify the types of insurance it offers,
extending access to insurance services among both
businesses and individuals. For example, Mansard pioneered entry into micro-insurance in a partnership
with telecom operator MTN, using mobile communications to help rural penetration increase from almost zero policies to more than 50 000. Over 200jobs
have been created at Mansard since the investment
by AfricInvest, a workforce increase of over 40%.
The fund has now successfully sold its stake in the
company.
Access to equity finance is often very limited in
African countries, particularly for small and mediumsized firms which are unable to access stock markets.
The EIB not only provides much needed long-term
risk capital, but also supports the emergence of local
skilled fund managers and the growth of private equity as a vital funding channel for African businesses.
Figure 9
AfricInvest II
EIB contribution
EUR 20m equity participation
18
Context
Outputs
Outcomes
Impacts
E xisting companies with

high growth potential
constrained by lack of
access to equity financing,
particularly SMEs
U nderdeveloped venture
capital/private equity
sector in the region
By AfricInvest II:
E UR 143m in equity
investments in
15companies
Technical support to
strengthen management,
governance, reporting
and transparency
In investee companies:
turnover increased by
37%
4 710 existing jobs
sustained and another
1968 created
additional EUR 56m in
taxes paid (up by 70%)
improved working
conditions and standards
Strong growth
by medium-sized
companies, supporting
overall economic
development
Contribution to
wider private sector
development through
increased exports and
demand for inputs
ReM Report 2014
Access to finance
Box 5:
Investee company EXAT Agriculture
EXAT Agriculture is a rubber planting and processing company in Cte dIvoire. Formerly focused just on supplying raw rubber, in 2008 it started diversifying by expanding into processing. AfricInvest II has provided
finance and expertise to support this expansion process, purchasing a 21% stake in the company in 2012.
In November 2013 a new production line was added, allowing EXAT to double processing capacity to 36000
tonnes/year. AfricInvests support has also been critical in helping to raise further funding for a 5 000 ha
planting project that will increase the plantation area to 6 500 ha and greatly strengthen EXATs market position. Certification by Goodyear and Continental (achieved in 2014) attests to the quality of EXATs products
and will help secure direct access to long-term sales channels.
AfricInvests involvement has also improved environmental and social standards, including better health and
safety practices such as better provision of protective clothing, while a health insurance policy has also been
put in place for all employees. Training on the sustainable planting and harvesting of rubber is provided and
the company has invested in better services (electrification and new school buildings) for the local community. A new water treatment system will enable nearly 90% of the water used to be recycled.
The rubber industry is an important export earner and source of growth in Cte dIvoire, the worlds 39thpoorest country, with 68% of the population engaged in agriculture. In this context, EXATs expansion enhances local job opportunities, both through direct employment and for independent farmers, who can sell
production to EXAT, rubber providing a reliable, almost year-round income for rural families. Since 2012, EXAT
has been able to increase its direct workforce by 50% to 240 employees.
2014 ReM Report
19
dy :
u
t
s
e
s
a
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t
rojec
p
Es
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S
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train
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Easing fun
n 2012 the EIB provided a EUR 100m loan to the

Macedonian Bank for Development Promotion
(MBDP) to improve access to finance for the countrys SMEs. The third loan of this kind with MBDP, it
enabled this national promotional bank in the former Yugoslav Republic of Macedonia to on-lend
the funding to local banks and provide funding to
446SMEs and four mid-cap companies. Loans averaged EUR222 000, with an average tenor of 5.5 years,
a significant improvement on the loan tenors typically
available to SMEs in the local market.
This lending has helped to sustain 16 542 jobs in the
beneficiary companies and create over 2 000 new
jobs. It has helped to finance investments by beneficiary companies worth EUR 171m in total. In addition, EIB funding was matched by another EUR 100m
raised by MBDP.
This kind of support is critical in a country where the

SME sector makes up 80% of employment, but remains relatively stagnant and focused on low-productivity activities. Loan growth in the country remains
weak following the global financial crisis. With regional parent banks under pressure, local banks generally need to secure funding locally and face funding
constraints. In this context, the EIB loan and its terms
have made a significant difference to SME access to finance, as well as to enhancing competition between
local banks and helping the productivity and export
performance of the SME sector.
The effectiveness of the operation has been improved
by having an experienced local partner like MBDP
that has established working relationships with local
banks and can help to enhance the selection of final
beneficiaries.
Figure 10
Easing borrowing constraints for SMEs MBDP Loan for SMEs and Priority Projects III
EIB contribution
EUR 100m loan
Longer maturity finance at attractive rates
20
Context
Outputs
Outcomes
Impacts
S MEs provide approx.

80% of non-agricultural
private employment
S ME sector focused
mainly on lowproductivity activities
P rivate sector growth
constrained by limited
long-term funding for
local banks and SMEs.
Financing by MBDP
channelled through local
commercial banks:
L oans extended to
446SMEs
A verage loan size
EUR222000
A verage loan tenor
extended to 5.5 years (up
to 8 years in some cases)
16 542 jobs sustained in

beneficiary companies
2 054 jobs created
Investments worth
EUR171m supported
Enhanced competition
among banks to finance
SMEs
Improved productivity
in SMEs
Economic diversification
and exports supported
ReM Report 2014
Access to finance
Box 6:
Dime bakery expands into local grain production

An EIB-funded loan from Komercijalna Banka has allowed the Dime bakery to grow and diversify, expanding from 82 to 170 employees in five years. Manager
Illija Pavlickovski explained how he had built up this
family-run business over 29 years but was increasingly facing volatile prices and supply constraints for imported grain. To stay competitive, he ventured into local
grain production, buying land and collaborating with
Skopje University to improve production techniques,
using the EIB-financed loan to buy new tractors and
trucks.
Creating an integrated production chain, he said, has
allowed the company to expand, introduce new products and now supply some 28 000 loaves a day to over
500 sales outlets in the country." He says that successful
grain production is encouraging neighbouring farmers
to improve production and introduce new crops.
Box 7:
Soko Dooel realising export potential

Outside Soko Dooels premises in the capital, Skopje, it
is hard to tell that this small family business produces
some 15 million cartons of juice a year. Starting to export eight years ago, they now export 80% of their production, including to 15 European countries.
Marketing manager Vesna Ljusic explained how, with
tight margins, they depend on favourable loan terms
to be able to expand. The EIB-financed loan they received from NLB Tutunska Banka helped to finance a
new packaging machine, doubling their capacity and
enabling them to offer more flexible and better quality packaging. In 2014 their output increased by 28%
and now they can also produce branded products for
big retailers.
As a manufacturer of a low-cost bulk item, transport
costs are also a big concern. Vesna Ljusic expressed
the hope that improving infrastructure connections to
neighbouring countries will also help their business.
2014 ReM Report
21
The development of social and economic infrastructure provides a foundation for
economic growth, job creation and social development. It is also critical for the
transition to a low-carbon future. The EIB supports infrastructure projects in a range
of vital sectors: energy, transport, water and sanitation, health, education and urban
development.
New projects in 2014 expected results:
4 million people
with improved water supply or sanitation
117
lives
per year
saved by road safety improvements
1.7
million
passengers
benefiting daily from improved

rail transport
8 660
GWh/year energy
generated, potentially meeting the needs of
1.5m households
23 500 households
with improved housing
22
ReM Report 2014
orty-nine new projects contributing to infrastructure development in 2014 include

19energy sector projects that will generate
8659GWh a year and support the energy needs
of 1.5m households. Nine transport projects are
expected to reduce road fatalities by 117 per
year, to benefit 1.7m rail passengers every day
and achieve annual operating cost savings of
EUR78m. Seven water sector projects are expected to improve the supply of safe water for 3.5m
people, while four urban development projects
are expected to provide improved housing for
23500 households.
Total approved EIB lending for new projects (projects with financing contracts first signed in 2014)
is EUR4.7bn, supporting the realisation of projects
with a total investment cost of EUR 14.4bn. Of the
total approved EIB lending for these new projects,
financing contracts for EUR 4.2bn were signed in
2014. Contracts for a further EUR 304m were signed
as second or later financing tranches for projects
first signed and reported on in previous years.
Infrastructure projects will lead directly to the employment of over 6 700 people during operation
and to around 195 000 person-years of employment
during construction. Water and sanitation projects
alone will involve 73 000 person-years of employment during construction, while health, education
and urban development projects will create 4 107
permanent jobs.
Figure 11
Figure 10 of new projects to strategic
Contribution
prove the transmission of electricity and gas will improve efficiency and extend essential energy supplies.
For example, over 68 000 households are expected
to benefit from additional connections to electricity
networks.
infrastructure
by sector
Contributionobjective
of new projects
to
strategic infrastructure objective by sector
100%
20
70
333
21
90%
1
1
7
465
80%
70%
The reliable, affordable and safe supply of energy is

essential to the realisation of basic needs and to wider economic development. In Africa alone, 57% of the
population still lacks access to electricity and around
90% of the continents enormous economically feasible hydropower potential remains unexploited.
252
673
60%
50%
40%
2 811
30%
20%
The path taken in the development of energy resources is also critical in the context of climate change. This
is why the EIB prioritises energy generation from renewables, effective energy networks to integrate this
renewable generation, and energy efficiency. Nine renewable energy projects will create 1 026 MW of additional generation capacity and 3 987 GWh/year supply, mostly from wind, solar and hydropower (Box 13).
This additional supply is enough to potentially serve
some 1.2m households. Greenhouse gas (GHG) estimates for the energy and other infrastructure sectors
are presented in the Climate Action section.
19
10%
0%
Amount (EUR m)
Energy
Number of projects
Industry
Transport
Education
Credit lines
Composite infrastructure
Urban development
Health
Water, sewerage
Note: Some projects are multi-sector. Approved lending volumes

for these projects are prorated. In the project count, each project
is included under the sector to which it contributes most.
Energy
The EIB signed contracts for 19 new projects in the
energy sector in 2014. Among these, 10 energy generation projects are expected to add 1 526 MW of
generation capacity, enough to serve an additional 1 534 300 households. Projects to extend and im-
The El Shabab Power Plant project in Egypt the only

fossil fuel-based generation project in 2014 will convert an existing open cycle gas turbine power plant
to modern combined-cycle technology, generating
an additional supply of 4 672 GWh/year through improved efficiency, without needing to increase the
quantity of gas used as fuel.
Table 4
Infrastructure projects direct employment impact
Employment during operation
Employment during construction
(full-time equiv.)
(person-years)
Energy
1 325
23 205
Transport
151
41 140
Water and sanitation
157
73 293
Health, education, urban development
4 107
51 425
Total
6 767
195 213
2014 ReM Report
23
Figure 12
Energy new projects overview
# operations 19
Approved EIB finance generation from renewables (9)
generation from gas (1)
gas production and transport (2)
power distribution (2)
facilities for renewable energy and energy efficiency projects (5)
Total investment cost: EUR 9.2bn
Approved EIB finance: EUR 2.8bn
Expected outputs
Generation capacity:
Power transmission substations constructed

or upgraded:
Power lines constructed or upgraded
Gas pipelines constructed:
Gas production capacity
(barrels of oil equiv. per year):
Projects increasing energy generation and
distribution efficiency:
Expected outcomes
1 526 MW
149
4 120 km
501 km
Two projects focus exclusively on extending and upgrading electricity networks to improve reliability and
efficiency and reach more households and businesses. For example, the Tajik-Kyrgyz Power Interconnection project will re-establish regional electricity trade
and ensure continuous power supply in Tajikistan.
The Urengoy-Pomary-Uzhgorod Gas Pipeline project, meanwhile, which comes under the EU support
package for Ukraine, involves the replacement of
two compressor units and 119 km of corroded sections on a pipeline that transports natural gas from
ReM Report 2014
Additional annual electricity

transported:
New households connected:
Gas transported per year:
8 659 GWh
1 534 300
EUR 166m
6 791 GWh
68 800
249 900 GWh
60m
The EIB also supports the development of electricity

and gas networks that increase the rational use of energy and economic development through regional integration, enhancing reliability and security of supply
and improving access to affordable energy.
24
Annual electricity production:

Households potentially served:
Annual savings from import reduction
or export gains:
Energy savings per year:
1 694 GWh
ussia to Ukraine and the EU and also, through reR

verse flows, from the EU to Ukraine. The investment
will reduce fuel consumption (saving 76 000 MWh/yr),
improve security of supply and extend the operational life of the pipeline. Also in the gas sector, the ETAP
South Tunisian Gas project will enable gas discovered
in the south of Tunisia to be delivered to the north
of the country. It will increase government revenue
and help to achieve savings by reducing imports of
oil products.
Five new intermediated loans will provide EIB finance
to smaller renewable energy and energy efficiency
projects, mostly in the private sector. These include
two loans for renewable energy and energy efficiency projects in India (Box 14). Two loans in Turkey will
finance energy and environmental improvements in
industrial processes.
Box 8:
Projet nergie, Republic of Guinea

This project will rehabilitate four hydropower
plants, adding 47 MW of cost-effective renewable energy generation capacity and enabling an
expensive 50 MW diesel motor emergency power plant to be replaced. This will achieve annual
savings from import reductions of EUR 26m and
result in significant improvements in service reliability. With effectively zero absolute emissions,
GHG emissions avoided by electricity generation
from this project are expected to be 122 kt CO2-eq/
year, compared to the likely alternatives for power
generation.
The project will also rehabilitate three substations
and 328 km of the distribution network in three
districts of Conakry. It will install 130 000 connections, two thirds of which will replace illegal ones.
It is estimated that during construction, the project will employ the equivalent of 500 people for
one year.
The EIB will support this EUR 161m project with a
EUR 60m long-term loan. As Guinea is one of the
poorest countries in the world, the EIB loan is highly concessional, benefiting from a subsidy under
the Cotonou Agreement. The Bank will also provide technical assistance to the Project Implementation Unit.
Many of the key challenges in this sector are also institutional and policy-related. These include insufficient
expertise, inappropriate regulation, the use of fossil
fuel subsidies and weak private sector participation.
Because of this, the EIB can often make a big difference
through mobilising technical assistance and providing
advice, often in cooperation with other IFIs. Blending
EIB finance with EC grants or EU interest rate subsidies
encourages investment in new renewable energy technologies and the poorest recipient countries.
Transport
The EIB signed contracts for nine new projects in the
transport sector in 2014. Every day, these projects
are expected to benefit some 42 000 road users (vehicle/day) and 1.4m rail users, achieving a combined
EUR78m/year in saved operating costs and reducing
road fatalities by 117 per year. Efficient and safe transport infrastructure is strategically important for social
and economic development, for facilitating the movement of people for employment and for accessing
other services, and for facilitating the movement of
goods and services, cutting distribution costs. Transport infrastructure is also clearly critical for regional
integration and the development of trade.
For example, the Programme de Modernisation
Routire in Morocco will focus on improvements
across the national road network, identified by the
World Economic Forum as the most important of the
countrys infrastructure shortcomings. The Vlre bypass project will reduce congestion on the roads of
the second-largest port city in Albania, achieving time
savings and improving safety.
In 2014, the EIB also funded essential airport rehabilitation work in two of Africas capital cities: Monrovia,
in Liberia, and Maputo, in Mozambique. In both cases,
the state of runway pavements and other structures
present a threat to safety and any further degradation
would likely have led to the closure of the airports.
More than a million passengers a year are expected
to benefit from the rehabilitation works.
Meeting growing demand for transport services while
limiting the environmental impact of mobility is one
of this sectors key challenges. The EIB supports projects that promote the shift towards more environmentally friendly, lower-carbon modes of transport
and satisfy demand in an efficient, economic and sustainable way.
Urban rail transport helps to reduce congestion
and environmental impacts in cities, while railways
in general tend to be the most energy efficient and
least polluting land transport mode. In southwest
Ukraine, the construction of a twin-track tunnel will
remove a key bottleneck in a Trans-European Transport corridor, promoting trade. The acquisition of
73 train sets in So Paulo will alleviate the current
overcrowding of the local metropolitan commuter
railway services, benefiting some 1.7 million passengers every day.
2014 ReM Report
25
Figure 13
Transport new projects overview
# operations 9
Approved EIB finance: EUR 673m
Expected outputs
Length of road built/upgraded
(lane km):
New urban transport trains:

Length of track built or upgraded:
Area of runway/taxiway upgraded (m2):
Expected outcomes
3 300
73
3.6 km
791 000
Vehicles/day benefiting:
Road fatalities avoided, per year:
Time savings (hours/year):
Annual vehicle operating cost savings:
41 900
117
21m
EUR 71m
# passengers benefiting daily:

Passenger time savings (hours/year):
Annual operating cost savings:
Additional cargo carried (tonnes/year):
1.7m
18m
EUR 7m
4.3m
Air passengers benefiting per year:
>1m
Box 9:
Upgrading Montenegro's roads

This project will improve transport conditions through the rehabilitation and upgrading of several sections of
the national road system, which is vital for international transit traffic as well as for international and national
tourist and goods traffic to the Adriatic Coast. It will also cover the construction of two city bypasses. These improvements are expected to benefit the passengers of nearly 30 000 vehicles every day, resulting in annual time
savings of 200 000 hours and annual vehicle operating cost savings of EUR 18m. The project will improve safety,
saving an estimated six lives every 10 years, and contribute positively to economic development in the country
and improved living conditions in two cities (Niksic and Rozaje) by diverting transit traffic from residential areas.
Having already been active in financing road rehabilitation in Montenegro, the EIB was able to assist in project
preparation and is providing a long-term loan of EUR 30m towards a total project cost of EUR 65.7m. As part of
the project, technical assistance will also be provided in relation to road safety, institutional strengthening and
project implementation. During construction, 2 400 person/years of employment will be created.
Water and sanitation

The EIB signed contracts for seven new projects in the
water and sanitation sector in 2014. These projects
are expected to extend access to safe drinking water
to 3.5 million people and improve sanitation services
for nearly 630 000 people.
In the non-EU countries in which the EIB operates,
water and wastewater services are often of poor
26
ReM Report 2014
quality and water resources are often managed in

an uneconomic and environmentally unsustainable
way. Challenges include defining realistic service levels, reducing water losses, the institutional strengthening of municipal and regional utilities, and improving regulation. Rapid urbanisation, changing
consumption patterns and climate change impacts
add further to the challenges in this sector. The
achievement of the water and sanitation targets of
the United Nations Millennium Development Goals
is a central component of EU development policy

outside the EU.
One of the new projects signed in 2014, the Dhaka
Environmentally Sustainable Water Supply project, is
notable for the very large number of people who will
benefit from improved water supplies. It is expected to
improve the quality and resilience of the water supply
for some 2.1 million people by substituting new sustainable surface water extraction for over-exploited
groundwater resources, whilst addressing the impacts
of increased flooding. Indeed, given the large proportion of the population that is still without adequate
access to safe drinking water and adequate sanitation
in many countries, projects in the water sector often
bring important benefits to a very large number of
people. For instance, 400 000 people are expected to
benefit from an improved supply of safe drinking water in Ulaanbaatar, Mongolia (Box 10), while the North
Moldova Water project is expected to benefit 231 000
people, around 6% of the countrys population.
Adequate sanitation is no less important for health,
and therefore for social and economic development.
Figure 14
Water and sanitation new projects overview
# operations 7
Expected outputs
New or rehabilitated water treatment capacity
(m3/day):
New/upgraded water storage capacity (m3):
New/upgraded water mains/pipes:
New/upgraded domestic water connections:
New or rehabilitated wastewater treatment
capacity (person-equiv./day):
New/upgraded sewer and storm pipes:
New or rehabilitated domestic connections to
sanitation services:
Expected outcomes
573 000
13 800
995 km
191 000
388 900
728 km
21 800
Population benefiting from improved

water supply:
Average % point reduction in
non-revenue water:1
3 541 000
21.5
Population benefiting from improved

sanitation services:
Reduction in untreated sewage
discharged to environment (m3/day):
Additional wastewater treated to
acceptable standards (m3/year):
627 500
67 700
25m
Non-revenue water (%) is the percentage of water supplied that is not billed because of leakage or illegal connections.
2014 ReM Report
27
The Kafr El Sheikh Wastewater Treatment project in

Egypt involves the construction of two wastewater
treatment plants and the expansion of a further three,
as well as the laying of 697 km of sewers. It will improve sanitation services for some 65 000 households,
or an estimated 227 500 people, with an additional
25m m3/year of wastewater treated to acceptable
standards. It will also reduce the discharge of untreated sewage into the environment, including the
Mediterranean Sea, by 67 700 m3/day.
Health, education and urban

development
Programmes to develop or renew urban areas, to
improve the quality of life and promote economic
growth, often involve infrastructure investments
across a range of sectors. These can involve, for instance, laying sewage pipes and safe water connections, improving roads, creating parks and connecting households to the electricity grid. They also often
involve the planned renovation or creation of new
higher-quality housing, schools and hospitals.
In New Caledonia, the EIB will fund a new hospital
that will become the leading hospital facility for the
territory, improving the quality and scope of healthcare services and enabling an additional 16 000 patients to be treated every year. In Tunisia, the EIB is
supporting a comprehensive programme to modernise the countrys schools, which will enable an additional 36 000 school students to be enrolled (Box 11).
Multi-sectoral urban development programmes will
support the provision of new or improved housing
and services for 18 500 households in Morocco in a
new town near the capital; replace or improve 5 000
residential buildings to improve earthquake resilience
in Turkey; and renovate buildings used by 9 000 pub-
28
ReM Report 2014
Box 10:
Basic infrastructure for informal

settlements in Mongolia
In Mongolias capital city, Ulaanbaatar, approximately 800 000 people live in growing peri-urban
Ger areas. These expanding, unplanned settlements of low and medium-income households are
characterised by unserviced plots, unpaved roads
and limited infrastructure. A large majority of the
population in the Ger areas only has access to water through kiosks operated daily between 10 am
and 8 pm. The lack of wastewater collection infrastructure means that large amounts of pollutants are being released into the ground, seriously
threatening the quality of groundwater, the citys
main source of water supply.
Co-financing with the Asian Development Bank,
the EIB is providing a EUR 50m long-term loan for
a multi-sector urban development investment
project aimed at improving the living conditions
in these informal settlements. It will extend water
distribution and wastewater collection infrastructure, including 20 000 new domestic connections,
to up to 400 000 inhabitants of the Ger areas. This
is expected to reduce waterborne diseases by a
third.
lic employees in Quito, the capital of Ecuador, helping

to improve the quality of public services.
Vital infrastructure development programmes often
require financing through intermediaries such as
public municipalities, which then channel funds to
finance a large number of smaller projects. In some
cases, it is possible to report at the outset the expected results of a defined programme of investments. In
other cases the EIB approves finance for an interme-
diary to implement a flexible programme of investments, so although the main aim of such a framework loan is known, specific quantifiable results can
only be reported ex post.
For example, the EUR 200m Ukraine Early Recovery
framework loan will finance the repair or replace-
ment of small-scale infrastructure damaged during

the conflict in Ukraine. This will cover utilities such as
water and sanitation systems, electricity and district
heating; damaged roads and railways; and the repair
of administrative buildings, schools and hospitals. It
will also assist municipalities affected by significant
influxes of displaced persons due to the conflict.
Figure 15
Health, education and urban development new projects overview
# operations 6
Expected outputs
New beds in hospital facilities:
New or refurbished schools:
Value of new school equipment:
New or refurbished housing units:
Urban streets and associated infrastructure built
or upgraded:
New/upgraded sewer and storm pipes:
Area developed:
Expected outcomes
183
369
EUR 29m
23 500
29 km
70 km
219 ha
Additional patients treated annually:
16 000
Additional students enrolled:
36 000
Households with improved housing:

Public employees in new buildings:
Residents benefiting from more open
spaces and parks:
23 500
9 000
300 000
Box 11:
Modernising Tunisia's schools

This EUR 213m programme, supported by a EUR 70m EIB loan, will target a quarter of all secondary schools
in the country as well as some primary schools and other facilities. In total, it will build 59 new schools and
renovate a further 310, creating 36 000 new places for students and increasing the number of teachers and
support staff by 3 350.
As well as expanding access to education, the programme will provide better facilities for teachers and students, enhance safety, enable more children with special needs to attend normal schools and reduce maintenance costs. Particular attention will be paid to schools in disadvantaged areas. The ultimate goal of the
programme is to ensure that young people leave school with better skills in order to help tackle the high
youth unemployment in the country.
The EIB is providing long-term finance otherwise unavailable in the market to match the economic life of
school buildings. It also helped to mobilise a EUR 12.5m grant from the EU Neighbourhood Finance Facility
and to define a large technical assistance package. This level of involvement on the soft side of an education sector programme is unprecedented for the Bank, which will dedicate substantial staff resources to support the project during implementation.
2014 ReM Report
29
dy :
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Resto
he EIB supported the Energy Sector Recovery

project initiated in 2004 to rehabilitate Kenyas
then overburdened electricity grid. Improvements to this vital infrastructure were successful in
enhancing the reliability of supply for households and
businesses, helping an additional 526 000 customers
to gain access to electricity.
An overburdened grid
At the time of project appraisal the electricity distribution system in Kenya suffered from heavy overloading,
particularly in urban areas. This contributed to a high
level of technical losses of electricity from the system
and also impacted negatively on the quality of supply.
The operator of the national grid, the Kenya Power &
Lighting Company Ltd (KPLC), was also in a poor financial situation and faced a significant shortage of
capital for meeting investment needs for renovation
and system reinforcement. This was due in large part
to a persistent drought that hit Kenya starting in 1998
and reduced hydropower generation, forcing KPLC
to resort to more expensive fuel-fired generation. By
2004 KPLCs financial position was improving, but it
was still unable to support sustained grid development, which is essential to support economic growth
and improve living conditions in the country.
Investing to meet growing

demand
The overall EUR 123.5m project was established to
reduce technical and commercial losses, improve the
reliability and quality of power supplies and increase
access to electricity in urban and peri-urban areas.
In total, 2 144 km of distribution lines and 38 substations were constructed or upgraded. The grid control
system (Supervisory Control and Data Acquisition/Energy Management System) was also comprehensively upgraded. These investments were successful in improving transmission line availability and reducing monthly
supply interruptions to a range of 0.16 to 0.2 per
100km, meeting targeted values. System losses were
reduced from 18.7% in 2004 to 14.5% in mid-2009.
30
ReM Report 2014
According to estimates from KPLC, it was possible to

connect an additional 526 000 customers as a direct
result of the project. Demand for electricity continues
to grow. In fact this has meant that transmission losses have risen again since 2009 because of increased
long-distance transmission from the coastal region
and the ever-increasing number of households and
businesses connected to the network. This is being
addressed by further ongoing investments by KPLC.
Supporting access to electricity

for the poorest
As the largest co-financer, the EIB provided a EUR43m
loan to the project, which was led by the World Bank.
The loan was provided with a 20-year tenor to match
the life of the investments. It also carried with it an
EU-funded interest rate subsidy worth EUR 4.8m.
This was essential to ensure that the financing met
the minimum concessionality obligations agreed between Kenya and the IMF, thus supporting the sustainability of the countrys external debt.
The subsidy was conditional on its use by KPLC for facilitating access to electricity for rural and low-income
households (Box 12).
Box 12:
Connecting underserved rural areas

Many low-income communities in rural areas in
Kenya live far from the existing national power
grid. Investments to extend electricity connections
to these communities are not commercially viable
without the provision of specific support.
This is why under the Energy Sector Recovery
Project, the EU-funded interest subsidy provided
with the EIB loan is being used to set up group
schemes, with a revolving credit fund, to help lowincome groups in rural areas overcome the hurdle
of upfront connection costs. Initiated in 2011, and
with 12 group schemes completed by the end of
2012, this ongoing programme is expected to help
some 5 250 low-income households to connect to
the electricity grid through more than 80 group
schemes by 2016.
Figure 16
The Energy Sector Recovery Project, Kenya
EIB contribution
EUR 43m 20-year loan
Mobilisation of EUR 4.8m EU
interest rate subsidy, to enable
financing within fiscal constraints
and to support access for poor and
rural households.
Context
Outputs
Outcomes
Impacts
K PLC unable to finance

required investment from
own resources
L imited availability of
long-term concessional
financing as required
under IMF agreements
D istribution system
suffering from heavy
overloading, unable to
support further demand
growth
Upgraded network
management systems
2 114 km distribution
lines new or upgraded
38 new or upgraded
substations
84 group schemes
(by 2016) to facilitate
access for poor/rural
households
526 000 additional

customers connected
Improved reliability:
monthly transmission line
interruptions per 100 km
0.16-0.2
5 250 poor/rural
households connected
through group schemes
by 2016
G reater electricity supply

reliability and capacity,
supporting economic
growth and improved
living conditions
G reater energy sector
financial sustainability,
with enhanced ability to
cover long-term costs of
power supply
2014 ReM Report
31
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Medit
n Mersin, a city of over 900 000 inhabitants on the

south-eastern coast of Turkey, wastewater used to
be discharged into the Mediterranean Sea untreated. This had severe environmental consequences and
posed risks to the health of the local population. The
problem was being exacerbated by the rapid growth
of the city.
The EIBs EUR 60m long-term loan to MESKI, the municipal company responsible for water and wastewater services in Mersin, was essential to the realisation
of the project, due to the lack of alternative long-term
financing sources for Turkish municipalities. It covered
approximately 50% of the total EUR 116m cost of the
investment.
Meeting environmental
standards for wastewater
treatment
The importance of sharing

expertise
The Mersin wastewater project was designed to provide the city with adequate wastewater collection
and treatment infrastructure to ensure compliance
with national environmental legislation and with the
more stringent environmental standards set by European directives on urban wastewater. This project
supported the EU policy to protect the environment
in the Mediterranean region, as formalised in the EUROMED II Mandate.
The project consisted of upgrading the existing
wastewater collection infrastructure and constructing a wastewater treatment plant with a 1.1 million
person-equivalent capacity, a deep sea outfall and an
adequate sludge disposal system.
Wastewater from the Mersin area is now no longer discharged into the sea without prior treatment.
As a result, bacteriological concentrations near the
shore and the risk of groundwater contamination
are now limited, reducing health risks for the local
population. The 49m m3 of sewage water treated
every year represents a substantial annual reduction in the discharge of various pollutants: organic
matter (9800 tonnes in terms of biochemical oxygen deficiency (BOD5)), nitrogen (1 850 tonnes) and
phosphorus (230 tonnes).
This has benefited the aquatic environment of the
bay of Mersin, which serves as the natural habitat of sea turtles and a wide variety of fish species.
Improved water quality has made the beaches and
coastal waters in the proximity of Mersin suitable
for recreation, potentially providing a boost to local
tourism.
32
ReM Report 2014
Due to the limited experience of MESKI with projects

of this size, the Bank also had an important role in
preparing the project and putting in place the necessary conditions for satisfactory implementation. Management of the project was assigned to an independent Project Management Unit, assisted by consultants
with international experience and reporting to the
EIB. The Bank also ensured that an adequate plan for
the disposal of sludge would be in place prior to disbursement of the loan.
This investment in Mersin is part of the EIBs wider involvement in the regions wastewater sector,
which includes two other sanitation projects in the
neighbouring cities of Adana and Tarsus. The EIB encouraged MESKI to meet regularly with the service
providers of the two neighbouring cities, to seek
common technical solutions and exchange managerial experience.
The expected outcomes for this project were achieved
despite challenges in project implementation. A long
delay at the beginning of implementation was largely
due to administrative changes impacting on the scope
of the project. After the Project Management Unit was
formed in 2004, the administrative area of Mersin was
significantly enlarged to encompass all municipalities
and villages within a 20 km radius from the city centre,
enlarging also the responsibilities of MESKI and the
scope of the project, and resulting in a delay in implementation. The technical support by the Project Management Unit consultants and the exchange of experiences with the neighbouring areas proved to be
important in overcoming challenges linked to limited
local experience in wastewater treatment and the implementation of large-scale projects.
Figure 17
Mersin wastewater project
EIB contribution
EUR 60m loan
Assistance for project preparation
and to set up an independent
Project Management Unit
Support for knowledge-sharing
across the region
Context
Outputs
Outcomes
Impacts
U ntreated discharge
of wastewater into the
Mediterranean at Mersin
bay, posing health risks
and harming tourism
L imited access to longterm finance
Biological wastewater
treatment plant, with
1 110 000 personequivalent capacity, and
deep-sea outfall
Upgrading of collection
infrastructure, incl.
pumping stations
10.2 km transmission
mains and pipes
Adequate sludge disposal
system
Annual treated sewage

volume: 49m m3, with
potential to increase to
69m m3
Yearly reduction in
pollutants: 9 800 t
biochemical oxygen
demand (BOD5),
1850t nitrogen, 230 t
phosphorus
Reduced human health

risks
Allowing recreational use
of beaches and coastal
waters, with potential
positive impact on
tourism
Improved quality of
aquatic environment in
bay of Mersin
2014 ReM Report
33
New projects in 2014 expected results:
3 987 GWh/year
new renewable energy supply, enough for
1.2
million
households
1
694
GWh/year
energy efficiency
savings
agricultural and water sector

projects will help mitigate
increased drought risks
Estimated carbon footprint for ReM

portfolio:
Absolute GHG emissions:
2.08
Mt CO2-eq/year
Avoided emissions relative to expected

alternative:
1.17
34
ReM Report 2014
Mt CO2-eq/year
Climate action
Outside the EU, action on climate
change is fundamental to promoting
sustainable development. The EIB supports climate change mitigation
through projects that reduce reliance on
fossil fuels or increase energy efficiency
and the use of lower-carbon transport
modes. EIB projects outside the EU also
contribute to climate change adaptation by improving resilience, for example to increased climate volatility in the
water or agricultural sectors.
n 2014, 26 new projects will contribute to this climate objective, representing EUR 2.6bn (32%) of
approved lending for these projects, for which financing contracts worth EUR 2.16bn were signed in
2014. Total 2014 signatures contributing to climate
change mitigation and adaptation (including later financing contracts under projects reported on in previous years) were EUR 2.46bn, or 32% of the total, well
above the Banks commitment to allocating at least
25% of annual signatures to this objective.
A majority of the new climate action projects in 2014
are in the energy sector. Six non-infrastructure climate
projects are ones that also support local private sector development, including R&D projects and support
for access to finance for agricultural SMEs. Climate
change adaptation has been mainly addressed in the
water and agricultural sectors.
Mitigation
EIB-funded projects from a diverse range of sectors contribute to mitigating climate change. A
Finance at work
for climate action
articularly important role is played by energy sector

p
projects that facilitate a shift to renewable or more efficient sources of energy. The nine new projects building new power generation infrastructure will all develop renewable sources of energy. The 1 026 MW in
additional capacity provided by these projects will
provide an alternative to fossil fuel-based generation
in countries where renewables are often only a small
proportion of total generating capacity.
Energy generation projects can also contribute to climate change mitigation by increasing the efficiency of
production from conventional sources. The conversion
of the natural gas-fired El Shabab plant in Egypt to a
combined cycle operation will increase electricity generation, providing much needed extra electricity in the
country. The absolute emissions for this power plant
after the conversion are estimated at 4 023 kt CO2-eq/
year; however the power plant will generate electricity
in a far more energy-efficient manner after the conversion is complete, with an efficiency gain of 1 400 GWh/
year. It is therefore estimated that it will reduce GHG
emissions by around 502 kt CO2-eq/year, compared to
the likely alternatives for this power generation. Three
energy transmission projects will achieve a saving of
294 GWh/year, to bring total estimated energy savings
for new projects to 1 694 GWh/year in total.
Energy efficiency within the energy sector is also supported by the EIB through intermediated loans that
fund smaller-scale investments, such as the framework loan for small energy projects provided to IREDA
in India (Box 14). Small-scale energy efficiency operations include, for example, investment in cogeneration the simultaneous generation of electricity and
useful heat to serve business and household needs.
Promoting the shift from relatively polluting to more
sustainable, lower-carbon forms of transport also
makes a significant contribution to climate change
mitigation. Two new projects in 2014 will promote a
shift from private road transport to rail, with associated reductions in carbon emissions. In Brazil, the acquisition of train sets for use on metropolitan railway
lines will reduce overcrowding and attract road users
(Box 15), while work on the Beskyd railway tunnel in
Ukraine will enable freight containers to be transported. As a result, an estimated 300 000 tonnes of cargo
per year will shift from road to railway.
Figure 18
Figure 17
Contribution of new projects to climate

Contribution
ofby
new
projects to
change
objective
sector
climate change objective by sector
100%
10
35
90%
80%
51
116
86
1
1
1
255
70%
60%
50%
40%
2 024
15
30%
20%
10%
0%
Amount (EUR m)
Energy
Number of projects
Agriculture, fisheries, forestry
Transport
Water, sewerage
Industry
Urban development
Credit lines

Box 13:
Small-scale hydropower in Bosnia and Herzegovina

With electricity demand forecast to increase by 3% a year
for the next 10 to 15 years, and with ageing, largely fossil fuel-based generation plant needing to be replaced,
Bosnia and Herzegovina is faced with the challenge of
expanding generation from renewables. The government has set a target of reducing electricity generation
from coal from 50% (in 2009) to 34% by 2024. It has identified the Vranduk hydropower plant as a priority project.
This new run-of-river power plant on the Bosna river will
generate 96 GWh per year. The EUR 86m investment will
also include transmission infrastructure to connect the
plant to the national grid and final consumers. As a cofinancier with the EBRD, the EIB is providing a EUR 37.5m
loan and has helped to define the scope of accompanying technical assistance, requiring, for example, a review of the dam safety element of the plants technical
design.
2014 ReM Report
35
Box 14:
Mainstreaming Climate Action: the ReM portfolio carbon footprint

The EIB Carbon Footprint Exercise (CFE) estimates and reports greenhouse gas (GHG) emissions from projects
in all sectors (not only from Climate Action projects) where, in one standard year of operations:
absolute emissions (actual emissions from the project) exceed 100 000 t CO2-eq/year; and/or
relative emissions (estimated emissions increases or avoidance compared to the expected alternative) exceed 20 000 t CO2-eq/year.
Absolute emissions refer to the direct emissions of the project itself (Scope 1 emissions), plus emissions from
generation of the power supply used by the project (Scope 2 emissions). Scope 3 emissions (other indirect
emissions) are not normally included in project data; however, they are included for physical infrastructure
links such as roads, railways and metros. Relative emissions are estimated by comparing the absolute emissions with the emissions from a baseline identified as the expected alternative scenario (e.g. different sources
of energy or modes of transport).
Whilst relative emissions are important for comparing technologies and projects, at the heart of the EIBs
footprinting approach are the absolute emissions from each project, as these are what will ultimately affect
our climate. Individual project GHG data are assessed at appraisal and reported on the Banks Environmental
and Social Data Sheets (ESDS), which are published on the Banks website on the Public Register. For the purposes of annual reporting, the project emissions are aggregated but with figures prorated to the volume
of EIB funding of each project that year. Thus if the EIB funds 50% of a project in a particular year, 50% of the
project emissions will be reported in that year. Total project emissions (absolute) and emissions reductions
(relative) would be significantly larger but would risk double counting with other IFIs that are also reporting.
In 2014, 15 of the projects outside the EU (including signed operations and large allocations approved during the year) had estimated emissions above the absolute or relative emissions thresholds and were included in the 2014 Carbon Footprint Exercise. They represent total EIB signatures or allocation approvals of
EUR1.8bn. The related total absolute GHG emissions are estimated at 2.08 Mt CO2-eq/year, with overall reduced/avoided emissions from the same financing estimated at 1.17 Mt CO2-eq/year.
Investment in innovative low-carbon technologies

also has the potential to contribute to climate change
mitigation. For example, the EIB is funding research
and development in Turkey on improving the fuel efficiency of passenger vehicles (Box 4).
Adaptation
As the effects of climate change become ever more
apparent, investments that support adaptation to
climate change and the reduction of adverse impacts for social and economic development will become increasingly important. In lower-income countries, the poor state of existing infrastructure and the
36
ReM Report 2014
fragility of livelihood systems makes investments in

adaptation doubly important. This is an issue that is
growing in importance for the EIB and will continue
to do so.
Two sectors in which climate change adaptation is
particularly important are the agricultural and water sectors because of their particular sensitivity to
changing weather patterns both extreme events
and long-term trends. Four new agriculture-focused
projects will make a contribution to climate change
adaptation. The Ziraat Bank credit line in Turkey and
the Fruit Garden of Moldova project (Box 17) will support investments by some 5 000 agricultural SMEs.
The operation with Ziraat Bank will contribute to ad-
Finance at work
for climate action
Box 15:
Box 16:
Investing in cleaner energy in India
Encouraging more commuters on to the

railways in So Paolo
The electricity sector in India suffers from chronic energy shortages and relies heavily on imports
of fossil fuels to meet growing energy demand. India will need an estimated 100 GW of additional
generating capacity over 2012-2017, 30% of which
should come from renewables according to government targets.
To help meet this goal, the EIB is providing
EUR200m to the Indian Renewable Energy Development Agency (IREDA) for small and mediumscale renewable energy and energy efficiency projects, some of which will be implemented by small
and medium-sized enterprises.
Although it is not possible to quantify detailed outputs and outcomes before allocations to sub-projects are submitted and approved, the framework
loan is expected to assist India in addressing a severe power supply deficit, contributing to sustainable economic growth by reducing energy imports
and carbon emissions. The operation supports the
EU-India Strategic Partnership, which provides for
cooperation in fighting climate change.
The So Paulo regional rail network carries more

than 2.5 million passengers every day. During peak
hours trains are overcrowded, carrying eight passengers per square metre, far exceeding the European comfort standards of four passengers per
square metre.
This EUR 765m project, supported by a EUR 200m
loan from the EIB, will finance 73 eight-car Electric
Multiple Unit trains to alleviate peak hours overcrowding and enable passenger numbers to rise to
a planned 3.6 million a day in 2015. By encouraging a modal shift from road transport (particularly
buses) to rail, the project is expected to reduce fuel
consumption and pollution emissions, achieve operating and maintenance cost savings of EUR 11m
a year and bring wider economic benefits to the
metropolitan area of So Paulo. As well as providing long-term finance to match the economic life
of the rolling stock, the EIB was also able to enhance the procurement standards applied.
The availability of long-term funding dedicated

to climate change mitigation projects is scarce in
the Indian market. EIB funding will enable IREDA
to extend loan tenors provided to the final beneficiaries so as to match the economic life of projects
financed. IREDA will also apply the EIB's eligibility criteria and standards with regard to technical,
economic and financial viability, environmental
and social issues and procurement, with all allocations reviewed ex ante by the EIB.
aptation in the agricultural sector and rural areas by

providing support for environmental, climate action
and resource efficiency investments. The Fruit Garden of Moldova project will support sustainable land
use and the implementation of resource-efficient systems throughout the horticultural value chain. These
include more efficient irrigation systems to facilitate
optimum use of water, an increasingly precious resource in a context of increasing drought risk.
2014 ReM Report
37
Box 17:
Revitalising the horticultural sector in Moldova

The Fruit Garden of Moldova project will support the revitalisation of the horticultural sector, an important
source of employment in the country. In line with the EU/Moldova Action Plan and Partnership Agreement,
the objective is to support rural employment and income generation through developing holistically the
entire value chain: from improving the quality of fresh produce to the final dispatch of processed products.
A EUR 120m long-term loan will be accompanied by a EUR 6m Neighbourhood Investment Facility (NIF)
grant that will fund partial loan guarantees to enable local banks to extend loans worth EUR 300m to underserved agricultural SMEs. The project will finance long-term loans (mainly for orchard and vineyard development), the leasing of equipment and investments in infrastructure such as testing laboratories and training
facilities. Around 1 000 loans are expected to be provided to SMEs through local intermediaries. A EUR 2.2m
technical assistance package funded by the NIF will support implementation through training for SMEs and
local banks. It will also be key to raising the quality of agricultural produce to ensure marketability in the EU.
The project will improve the resilience of the horticultural sector to climate change impacts by establishing new fruit tree plantations on land exposed to erosion and by research into seed varieties better adapted
to Moldovas future climate. The project will also reduce GHG emissions by funding drip irrigation systems
for fruit orchards and table grape vineyards; reducing the use of fertilisers and other inputs; reducing waste
along the value chain; and replacing existing equipment with more energy-efficient technologies (e.g. for
storage and transportation).
38
ReM Report 2014
Finance at work
for climate action
Two directly financed projects will increase resilience

to increasing climate and harvest volatility in Ukraine
by expanding crop storage capacity (714 000 tonnes
for grain, 200 000 tonnes for oilseed, or 2% of the
countrys cereal production). This will help to improve
the resource efficiency of the countrys agri-food sector and contribute to better food security and self-sufficiency by helping to buffer supply against adverse
climate events, particularly more severe droughts.
It will help secure the yearly consumption needs of
5.8million people (Box 18).
In the water sector, the adaptation impact of the Dhaka Environmentally Sustainable Water Supply project
is particularly notable. It will develop a new sustainable surface water resource based on water intake
at the Meghna river that will reduce extraction from
overexploited groundwater resources and improve
the resilience of the citys water supply system to
droughts and risks of more extreme floods, which are
likely to be an increasingly frequent adverse impact
of climate change.
Box 18:
Adapting to increased harvest volatility in Ukraine

Ukraine has extensive fertile arable land and high
agricultural production potential. However, as a result of climate change harvest results have registered increased volatility in terms of quantities and
prices. As the countrys certified storage capacity
is around half of what is required in good harvest
years, this volatility has resulted in fertile lands being left uncultivated and some excess harvests
even being destroyed. Creating adequate storage
capacity is one of the most effective ways for agricultural enterprises to mitigate increasing climaterelated risks.
Furthermore, while the country is a large net exporter of staple grains, oil crops and vegetable oils,
it is a net importer of processed feeds and foods
such as soya meal. Investing in processing capacity will help mitigate the effects of dependence on
volatile external markets.
This is why the EIB is providing a EUR 50m longterm loan to subsidiaries of Astarta-Kiev, an agricultural company, to support the construction of
eight grain elevators and a soybean processing facility. This loan comes at a time when long-term financing is very much constrained in the Ukrainian
context. It will help Ukraine realise its high potential in the agricultural sector and promote selfsufficiency in processed feeds and food ingredients, while also supporting adaptation to climate
change.
2014 ReM Report
39
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La Venta I
Electricity generation in Mexico is mostly based on

thermal combustion plants, of which 90% rely on
fossil fuels. The country is also experiencing strong
growth in energy demand and the promotion of renewable energy is one of the targets of Mexicos energy policy. The La Venta III Wind Farm project, signed in
2010, provided an opportunity for the EIB to promote
the development of clean energy supply through private sector investment, the alternative being thermal
power generation from fossil fuels with associated
greenhouse gas emissions.
Capitalising on local wind

resources
The project consisted of the construction of 121 turbines with a generating capacity of 103 MW, and
10km of overhead transmission lines to connect the
wind farm to the grid. Located in the State of Oaxaca, it capitalises on the strong winds in the area that
blow from the Gulf of Mexico in the north to the Pacific Ocean in the south.
The promoter, Iberdrola S.A., is a leading European
company in the energy sector with experience in the
wind sector internationally. The company obtained a
40
ReM Report 2014
licence for La Venta III wind farm following an international public tender.
An Environmental Impact Assessment was carried
out to evaluate potential impacts of the project, including on migratory birds and local communities.
Lease arrangements with affected landowners were
implemented, providing them with an attractive revenue stream for 30 years, whilst also allowing continued use of the land for agricultural purposes. The promoter has also carried out further investments in local
communities, including the construction of a comprehensive community school in the town of La Blanca
and the expansion of selected water and sewerage
facilities in the town of Santo Domingo Ingenio. Further local infrastructure works will be implemented,
and periodic monitoring of potential impacts is being carried out.
Renewable energy for 140 000

households
The project entered commercial operation at the
end of 2012. It was delivered at 4% below the original cost estimates. In its first year of operation it produced 254 GWh of electricity enough to supply over
Finance at work
for climate action
140 000 households with annual generation expected to reach 267 GWh/year. The cost of electricity production at La Venta III, at an estimated EUR 66
to EUR91per MWh (at 5% and 10% discount rates
respectively) is considerably lower than for mature,
grid-connected renewable energy in the EU. With effectively zero absolute emissions, it is estimated that
GHG emissions avoided by electricity generation from
this project are 120 kt CO2-eq/year compared to the
likely alternatives for power generation.
The added value of EIB involvement in this project
was both financial and related to the standards applied. The EUR 78.5m EIB loan provided long-term finance that contributed to the financial sustainability
of the project at a time of increased difficulty in ob-
taining this type of finance as a result of the global

financial crisis. The other half of the finance was provided by the promoter. The concession agreement
guarantees access to the grid for the electricity generated by the project for the duration of the concession.
Prior to disbursement, the EIB also required specific
commitments from the promoter and turbine supplier relating to the design of the foundations and turbines in order to mitigate risks from extreme weather
and seismic events. Further undertakings related to
additional assessments of project impacts including cumulative impacts on residential and migratory birds and bat species, and appropriate mitigation
measures to minimise any residual risk. These requirements were satisfactorily met.
Figure 19
La Venta III
EIB contribution
EUR 78.5m loan
Long-term maturity, improving
economic sustainability
Requirements on impact
monitoring and mitigation
Context
Outputs
Outcomes
Impacts
S ubstantial wind power

potential
G rowing electricity
demand, with fossil fuels
the main alternative
P romotion of renewable
energy sources a target of
Mexicos energy policy
103 MW new renewable

generating capacity
provided via 121 wind
turbines
10 km of power lines
constructed
In first full year of

operation:
254 GWh electricity
generated, enough to
supply over 140 000
households
Estimated generation
cost: EUR 66 to EUR 91
per MWh (at 5% and
10% discount rates
respectively)
N ear-zero absolute GHG

emissions
G HG emissions reduced/
avoided: 120 000 t CO2eq/year
M
eeting energy demand
to support social and
economic development
2014 ReM Report
41
Improving links amongst partner countries, and between partner
countries and the EU, is a cross-cutting objective of the EIBs action
outside the EU. EIB projects can contribute to regional integration by
facilitating the physical movement of goods and labour, but also
by fostering international collaboration in the private sector, and
bysupporting the convergence of neighbouring countries economies
with those of the EU.
Promoting regional integration:
Optimising the use of

energy resources across
regions
Facilitating cross-border
mobility and trade

Spreading financial
expertise and capital to

underserviced markets
Supporting private sector

convergence with the EU
in Pre-Accession countries.
42
ReM Report 2014
n 2014, the EIB signed 26 operations contributing

to regional integration. EUR 2.1bn of EIB funding
for these new projects contributed to this mandate
objective (amounts are prorated according to the assessed contribution of each project to the objective).
These projects include transport and energy infrastructure, investment in innovation, as well as credit lines and regional funds supporting local financial
sector development.
Of the financing signed in 2014 for new projects,
EUR 1.75bn contributes to regional integration.
Contracts contributing a further EUR 141m were
signed as second or later financing tranches for
projects first signed and reported on in previous
years.
Infrastructure projects will lead directly to the employment of over 6 700 people during operation
and to around 195 000 person-years of employment
during construction. Water and sanitation projects
alone will involve 73 000 person-years of employment during construction, while health, education
and urban development projects will create 4 107
permanent jobs.
Supporting
regional integration
Figure 20
Figure 19
Box 19:
Contribution of new projects to the regional

Contribution
of newbyprojects
integration
objective,
sector to the
regional integration objective, by sector
100%
45
100
90%
115
80%
301
70%
518
60%
50%
40%
30%
1 025
20%
10%
0%
Amount (EUR m)
Number of projects
Credit lines
Industry
Energy
Agriculture, fisheries, forestry
Transport
Services

Transport
The majority of projects funded by the EIB in the
transport sector not only upgrade national infrastructure but also facilitate mobility across borders. Funding the rehabilitation of air transport facilities will allow the continued operation of key international
gateways to Liberia and Mozambique (Box 19), where
air traffic has been rising in recent years and is expected to continue to grow in the future. Improved
land transport can also contribute to regional integration, particularly where the road or railway segments concerned link directly to international borders or are part of wider international networks. Two
road operations, in Bosnia and Herzegovina and in Albania, will improve connectivity along pan-European
corridors in Eastern Europe. Moreover, the upgrading of the Beskyd tunnel in the Carpathian mountains
in Ukraine will remove a key transport bottleneck
in particular for long-distance freight movements
along Trans-European Corridor V, linking Trieste, Italy
to Lviv, Ukraine.
Rehabilitating Liberia's main airport
The runway of Roberts International Airport in

Monrovia, the capital city of Liberia, was damaged
extensively during the course of Liberias civil war
and still remains in poor condition, presenting a
serious safety risk to aircraft. Without rehabilitation
the airport would probably have had to close, forcing traffic to drive from neighbouring countries or
a smaller regional airport. Keeping Liberia's main
airport open is critically important for maintaining
Liberia's trade and business links with the rest of
the region and beyond.
This project, co-funded by the EIB along with the
Saudi Fund for Development, the Arab Bank for
Economic Development in Africa (BADEA) and the
Government of Liberia, consists of rehabilitation
works for a total investment cost of EUR 43m.
In line with the Government of Liberias Poverty
Reduction Strategy, in which the rehabilitation of
infrastructure, including transport, is one of four
key pillars, the works will rehabilitate 200 000 m2 of
runway and taxiway, upgrade the drainage system,
replace the airfield lighting system and provide
new safety-related ramp and passenger handling
equipment. As well as allowing the safe operation
of aircraft, the project is expected to reduce time
spent on maintenance by 90%.
The EIB is contributing to this EUR 43m project
through a EUR 19.6m loan matching the economic
life of the assets. The Bank has also supported the
promoter in defining the role of the Project Implementation Unit and by identifying some technical inconsistencies within the preliminary design,
which have now been addressed and rectified.
2014 ReM Report
43
Energy
Financial sector development
Regional integration can be crucial in enhancing access to energy in countries that may lack natural energy resources. It may also open up opportunities for
further development of renewable resources. At the
same time, cross-country connections provide producers with the opportunity to export energy.
Cross-border financial services are an important aspect of regional integration, helping to spread service models and expertise, and achieving synergies
and economies of scale across markets that are often
small and financially underserved. This is why many
private equity funds, particularly in the Mediterranean and ACP regions, have a regional rather than
a national focus. A regional perspective can also be
important for identifying and capitalising on opportunities for cross-border investment and partnership.
In 2014, the EIB signed four new private equity par-
Two projects funded by the EIB in 2014 support international trade by connecting energy networks across
countries. In particular, new transmission lines between Kyrgyzstan and Tajikistan are part of a wider
project to re-establish regional electricity trade, which
broke down in 2009 after transmission connections to
Tajikistan and Uzbekistan were cut and dismantled.
This project highlights one of the key issues in supporting the integration of energy markets: the importance of a conducive economic and political context.
Other energy projects, such as the Jiji Mulembwe hydropower project in Burundi and the Projet Energie
Guine in Guinea (Box 8), contribute to regional integration by expanding generating capacity, allowing
cross-border energy trade using existing connections
to improve the cost, reliability and sustainability of
energy supplies across a region.
Industry
Supporting eligible projects in the private sector can
also contribute to regional integration where the implementation of the project involves or will result in
international cooperation. This is often the case when
the EIB co-funds investment in research and development outside the EU. Innovative firms tend to have
international links, as they may attract skilled labour
from abroad and participate sometimes formally in international R&D networks. Both R&D projects funded by the EIB outside the EU in 2014 will
strengthen cooperation in innovation activities across
Europe and the Mediterranean. The firms involved,
operating in Turkey in the consumer electronics and
automotive sectors, regularly cooperate with firms
and research institutions in the EU.
44
ReM Report 2014
Supporting
ticipations worth a total of EUR 138m. These are expected to leverage a further EUR 497m. One is in the
Mediterranean region and three in the ACP, including
one in the Caribbean (Box 20).
Eight new credit lines to enhance access to finance
for SMEs will also support regional integration. All but
two of these projects, involving EUR 1bn in EIB lending, are located in the Pre-Accession region, where
they will support convergence with the EU in terms
of local private sector development, enhancing opportunities for trade and business relationships with
the EU.
Box 20:
Fostering regional integration in the Caribbean

through private equity
In the Caribbean, SMEs and mid-cap companies
are the main contributor to job creation and economic dynamism, but nonetheless struggle to access long-term finance. Economic growth is weak
in most of the region and local financial sectors remain relatively underdeveloped. The Portland Caribbean Fund will address these issues by providing
USD 300m in long-term equity and quasi-equity
funding to 10 to 12 medium-sized companies in
the region. The fund will help sustain around 2 000
existing jobs in investee companies, as well as facilitate expansion.
Caribbean markets suffer from fragmentation
across a number of small island states. This is why
the Fund will focus on the development of crossborder opportunities, especially in relation to the
energy sector. Other sectors expected to be addressed include agribusiness, tourism and corporate and financial services. This will contribute to
higher levels of regional integration and promote
sustainable growth, in line with the objectives of
the EU Latin America and Caribbean Partnership
(EU-LAC).
The EIBs USD 32m participation in the first closing
of the Portland Caribbean Fund is expected to play
a crucial role in mobilising additional resources as
well as in fostering interest for more growth projects. Moreover, as a cornerstone investor in this
project with a seat on the advisory committee, the
EIB will ensure that best market practices and environmental and social standards are implemented.
2014 ReM Report
45
dy :
u
t
va
s
o
e
s
d
l
a
o
c
t
M
c
e
n
j
i
pro
ons
d
i
t
e
t
c
e
e
l
n
p
n
m
o
o
c
C
ad
o
r
l
a
t
i
v
g
tin
Rehabilita
The importance of road links in

Moldova
With the accession of Romania to the European Union in 2007, the Republic of Moldova became a border state between the EU and countries further east.
Seizing this opportunity to access EU markets required transport infrastructure adequate to support
the movement of goods and people from, to and
within Moldova. This is especially the case in Moldova, as the countrys economy and exports are heavily reliant on agriculture and agro-industry, both of
which are highly dependent on adequate road infrastructure. However, more than half of national roads
and around three quarters of local roads were in poor
condition at the time. About 400 km of roads had
even lost their pavement and reverted to unpaved
gravel.
Responding to a critical need for

road repairs
Responding to this situation, the EIB has supported a
series of projects to extend rehabilitation work across
the national road network and urban roads in the
capital Chisinau. The first of these projects, in 2007,
provided a EUR 30m long-term loan to Moldova to
fund the rehabilitation of 70 km of some of the worst
affected sections of the national trunk road network,
including parts of a pan-European transport corridor.
The total project cost was EUR 60m.
The project works included a wide range of localised
repairs and reconstruction, such as levelling, drainage
improvement and resurfacing, and also road safetyrelated improvements such as carriageway separation, guardrails, signing and marking, and junction
layout improvements. It also had a strong focus on
technical assistance, addressing issues such as axle
load control, to reduce long-term road damage, and
improving the funding of road maintenance. A commitment by the Government of Moldova to increased
resources for road maintenance works and the adoption of a new road financing mechanism was a condition of the loan.
46
ReM Report 2014
Supporting
Outcomes for road users

In addition to preserving key public capital infrastructure assets, the project was effective in reducing vehicle operating costs by an estimated EUR 7m per year,
achieving time savings for road users estimated at
3500 hours per year. While these estimates are somewhat approximate, given the weakness of information on the pre-project situation, the project also put
in place monitoring systems to improve results monitoring in the future, also for subsequent projects.
The project can also be regarded as having improved
safety for the 7 700 vehicles that use the improved
sections on an average day, but the number of accidents that has occurred on these sections since the
completion of the works has been too low to provide
a statistically meaningful estimate of this outcome.
The project has thus helped to implement the countrys
comprehensive Transport Sector Programme for the
period 2008-2017. It has enhanced Moldovas links with
neighbouring Ukraine and Romania, increasing Moldovas trade opportunities in the region, both by facilitating access to EU countries and by maintaining contact
with its traditional markets in former Soviet countries. It
has therefore helped to foster regional integration and
Moldovas economic and social development.
Figure 21
Rehabilitating vital road connections in Moldova
EIB contribution
EUR 30m loan for rehabilitation
works and technical assistance
Ensuring the adoption of new
strategies for road financing and
maintenance
Context
Outputs
Outcomes
Impacts
D egraded road network,

including part of a panEuropean corridor
I mportance of road
network for largely
agriculture-based
economy, and for
expanding trade links
with EU
U nsustainable road
maintenance funding
mechanism
70 km of roads
rehabilitated
Implementation of
road safety-related
improvements
Technical assistance and
implementation of new
road funding mechanism
7 700 vehicles benefiting

per day
EUR 7m/year reduced
vehicle operating costs
3 500 hours/year time
savings for road users
Improved road safety
Law reform and
establishment of fund to
ensure sustainability of
investments
B etter access to markets

in EU and post-Soviet
countries, positive for
trade and growth
S upport for regional
integration, including
increased trade
opportunities
2014 ReM Report
47
Additionality of EIB support
15- year
average loan tenor
20- year
average tenor for
infrastructure projects
EIB funding
leveraged
41%
2.7
of projects
times
to benefit from
technical
assistance
he EIB supports projects not just because of the

expected results and how they match our objectives. We also look for the difference we can
make: the EIB contribution that goes beyond the
standard market alternative.
In a very large majority of operations, the additionality of EIB support is rated significant (72%) or high
(14%). The degree of additionality provided in each
case reflects the needs of projects and promoters
it will be higher for complex projects in less developed regions, and less pronounced where the EIB
is dealing with highly experienced promoters or sophisticated intermediary banks.
in terms of finance from

other sources
Technical and sector contribution takes place where

needed, depending on the experience and capacity
of promoters and government entities.
Figure
Figure
2221
Pillar
3 ratings
- newprojects
projects
Pillar 3 ratings
new
100%
15
90%
24
70%
60%
54
65
48
ReM Report 2014
21
63
40%
30%
20%
18
10%
Significant or high additionality is provided most

frequently by the characteristics of the Financial Instrument provided, followed by Standards & Assurance (raising standards, demonstration effects and
mobilising resources).
11
80%
50%
This gives rise to regional differences. Additionality tends to be higher in Mediterranean and certain
ACP countries. In the Pre-Accession region, additionality is less often rated significant or high.
16
25
11
0%
P3 Rating
Financial
Instrument
23
Standards
& Assurance
High
Moderate
Significant
Low
Technical
and sector
contribution
Additionality
of EIB support
Financial additionality
Tenor extension: Nearly all operations provide a tenor
to project promoters or financial intermediaries which
considerably exceeds the standard maturity available
in the local markets and matches the economic life
of the assets to be financed. The tenor provided by
the EIB is usually two to three times the standard tenor available in the local market, and sometimes up to
5times greater.
Table 5
Average tenor provided, by type of operation
Type of operation
Years
Direct and framework loans

for infrastructure projects
20.5
Credit lines for SMEs, midcaps and microenterprises
10.7
Direct and framework loans

for industry projects
9.7
Equity-type operations
10.8
Funding in local currency: In certain operations the

EIB can use different mechanisms in order to absorb
the local currency risk. This makes its funding more attractive for borrowers, including the final beneficiaries
of intermediated operations, whose activities are focused on domestic markets. It also makes EIB funding
more attractive for infrastructure projects whose revenue stream is based on tariffs in local currency and
which would come under pressure if the financing
were in foreign currency.
For example, in the Republic of South Africa the EIB
raises funds through issuing bonds in rand on the local capital market, such as for the Eskom Kiwano Concentrated Solar Power Project. In Turkey the EIB uses
swap products that are available in the market and indeed contributes to deepening the market for such
products. In the Mediterranean region the EIB has access to third party funds from the EUs Neighbourhood instrument, which allow for higher risk taking
(the EIB prices anticipated currency losses, but potential excess losses are borne by these funds and potential gains credited to them). Operations benefiting from local currency funding include credit lines
for SMEs and mid-caps in the ACP and Pre-Accession

regions and microfinance providers in the ACP and
Mediterranean regions.
Blending loans and grants: The EIB manages grants
from third parties alongside its loans. These are typically investment grants. This is a significant source of
additionality, particularly in the ACP, MED and Eastern Neighbourhood countries. Eighteen new projects
benefited from grants in 2014.
These grants originate from the ECs regional blending mechanisms, such as the Neighbourhood Investment Facility, and typically are used to support projects that strongly promote EU policy orientations,
meeting more than one policy objective. For example, two projects benefiting from grants are the Ouarzazate solar plants in Morocco, which will contribute
to infrastructure development and climate action,
and the Fruit Garden of Moldova project, which contributes to private sector development, infrastructure
and climate action. Six projects benefiting in the ACP
region are the three renewable energy projects in Burundi, Guinea and Burkina Faso, airport rehabilitation
projects in Mozambique and Liberia, and the AEP Niamy water sector project in Niger.
Innovation: EIB operations are considered innovative
when the EIB can offer certain activities or products in
a specific market context that other IFIs do not offer,
or because the structure of the operation provides for
a special partnership with project promoters. Innovative operations are most frequent in the ACP, ALA and
MED regions.
For example, the EIB is collaborating with Rseau Entreprendre in Tunisia, a civil society organisation that
promotes the establishment of micro-enterprises by
providing interest-free loans combined with customised coaching for entrepreneurs during the early years
of their businesses. As part of this collaboration, Rseau Entreprendre will select such enterprises and
introduce them to the intermediary Banque TunisoKoweitienne (BTK) for possible financing at a preferential rate of interest under the EIB line of credit, as
well as providing continuous support to the selected
enterprises.
2014 ReM Report
49
Technical contribution
The technical contribution that the EIB makes to projects includes involvement in project preparation
such as the review of feasibility studies or environmental and social impact assessments; support for
project implementation, such as technical assistance
for a Project Implementation Unit; and broader sectoral support such as strengthening the capacity of key
institutions. Under the ReM framework, each of these
components is rated and an overall technical contribution rating is calculated.
The EIB also contributes technically to financial sector projects, for instance through representation on
funds supervisory boards, thus effectively contributing to the strategic guidance of the corresponding
operations.
More than two thirds of new projects in 2014 (66 in
total) will benefit at least moderately from EIB technical support for project preparation, implementation or broader sector capacity. Support is covering
Figure
Figure
23 22
Operations
supported
New
projects in
2014, by region
by technical assistance, by region
all of these three areas for 35 projects. In 38 cases projects have benefited from specific technical assistance
measures, which the Bank is either providing directly,
funding, or for which the Bank has helped to mobilise
resources from other sources.
The Banks overall technical contribution was rated
high or significant for 53% of the projects where a
technical contribution is provided. Projects in the Mediterranean, ACP and Pre-Accession countries most often benefited from a significant technical contribution.
The EIB often plays an important role in helping unlock grant financing for technical assistance, particularly from the EU budget. In financial sector projects
a typical form of technical assistance targets financial
intermediaries, which receive assistance in terms of
applying eligibility criteria, product design and raising compliance standards. Projects in the energy and
transport sectors were the most frequent beneficiaries of technical assistance in 2014.
Figure 24
Figure 23
New projects in 2014 - Contribution

Operations supported
to mandate objectives
by technical assistance, by region
0
10
12
1 1
12
Total: 38
Total: 38
2
2
9
ACP
50
ALA
Credit lines
EAST
Energy
Urban development
MED
Transport
Industry
Pre-Accession
Water, sewerage
Education
ReM Report 2014
Microfinance and private equity
Additionality
of EIB support
Box 21:
Technical assistance in action
Sonabel Solar Plant, Burkina Faso

support for updating environmental and social
studies necessary to meet the required quality
standards.
Electricity Distribution, Bosnia and

Herzegovina
extended support for project preparation by the
EIB, plus TA support for the preparation of a programme to install over 300 000 smart meters.
Zenata Urban Development, Morocco

technical assistance supports the monitoring of
social impacts in a project involving the resettlement of low-income slum dwellers to improve living conditions.
AEP Niamey water supply, Niger

EIB-financed TA is developing a water master plan
for the capital city.
Kafr El Sheikh Waste Water

Treatment Plant, Egypt
EIB-managed technical assistance funds under the
Horizon 2020 Initiative are supporting the identification and development of sub-projects to tackle
a Mediterranean pollution hotspot.
Enhancing standards and

mobilising resources
Raising standards: The EIB plays an important role in
raising the environmental and social or procurement
standards for the implementation of the investment
projects to be financed. In 73% of operations this additionality dimension is rated significant or high. This
effect of the EIBs intervention is particularly strong
in framework loans in the Pre-Accession region (e.g.
operations in 2014 with TSKB Bank and Development
Bank) and ALA (e.g. with IREDA in India, and Chile
CCFL), where intermediaries have to adhere to the
EIBs strict requirements, notably in the field of environmental impact assessment and mitigation.
Demonstration effect: In certain regions, notably MED and ALA, the EIBs intervention has a significant demonstration effect. The EIB provides assurance to other financiers about the quality of
projects that are assessed by the EIB and thereby
encourages the participation of other institutions
in the financing of these projects or similar projects
in future. The EIB has a demonstration effect that is
rated significant or high in more than three quarters
of all operations.
This is usually the case in complex infrastructure projects, road projects with a regional dimension such
as road rehabilitation projects in the Pre-Accession
region, or large urban infrastructure projects in the
water sector, such as the Ulaanbaatar Water Supply
project (Box 10). This is also the case for operations
that promote environmental protection, where the
EIB may make a significant contribution in terms of
its expertise during the assessment phase, or in operations where the EIB takes a leading role in the financial structuring and coordination of other financiers. It may also arise in credit line operations
where the EIB is working outside the mainstream
with smaller, second-tier or specialised banks or in
partnership with sector-specific public institutions.
The demonstration effect in the Mediterranean region is notably rated significant or high in 94% of
the operations.
Mobilising resources: The EIB works with project promoters and co-financiers on the design of financing
packages or to accelerate the financial close. In 38%
of the operations the EIBs role in structuring the financing package is rated significant or high. In 28%
of the operations the EIB dedicates significant or high
efforts towards working closely with co-financiers in
order to reach financial close.
This has an impact on mobilising finance from other
institutions. 62% of new projects attracted private finance, which was equal to 82% of total IFI finance for
these projects on average. Overall, the EIB financed
33% of the total investment cost of projects in 2014
a multiplier of 2.74.
2014 ReM Report
51
Annex 1: ReM Framework ratings

Under the ReM Framework, projects are rated at the
time of Board approval according to three pillars:
P illar 1 checks eligibility under EIB mandates
and rates the contribution to the EU and country
priorities.
Pillar 2 rates the quality and soundness of the operation, based on the expected results.
Pillar 3 rates expected EIB financial and non-financial additionality, beyond the market alternative.
Ratings are based on a series of objectively measureable indicators and guidelines, while a process of quality control ensures that all ratings are checked for consistency across operations.
Pillar 1
All new projects in 2014 were rated at least good under Pillar 1, signifying that they are in line with mandate objectives and make a high contribution to either national development objectives or those of the
EU, and a moderate contribution to the other. Fortytwo were rated excellent for making a high contribution to both national development objectives and
EU priorities.
Pillar 2
For directly financed projects, the Pillar 2 rating is
based on project soundness, financial and economic sustainability and environmental and social sus-
Figure
Figure
2625
Pillar
ratingsby
bysector
sector
Pillar
2 2ratings
Figure
Figure
2524
ReM
ratings
Pillar
ReM
ratings
byby
pillar
100%
100%
15
16
90%
80%
1
3
80%
42
70%
70%
60%
60%
50%
65
68
25
17
50%
40%
40%
30%
30%
49
20%
1
Moderate
Significant
Low
Excellent
ReM Report 2014
Good
Acceptable
Transport
Services
Health
Water, sewerage
High
Energy
P3 rating
Education
P2 rating
Credit lines
P1 rating
0%
Composite infrastructure
0%
Agriculture
11
Urban development
10%
10%
Industry
20%
52
90%
Marginal
Annexes
tainability. For intermediated operations, the rating is based on the expected results, weighted by
risk considerations as measured by the soundness
of the intermediary and the quality of the operating
environment.
Figure 27
Figure 26
Average
environmental and social ratings by
Average environmental
sector
and social ratings by sector
Water, sewerage
In terms of overall Pillar 2 rating, 68 projects were rated good, with an average economic rate of return
(ERR) of 10% to 15% in the case of infrastructure projects. Sixteen projects were rated excellent. Notable
among these were many microfinance operations
(under services) as well as some credit lines and
transport projects. Only 11 projects across all sectors
received an acceptable rating, often because of high
risk environments that impact on the probability of
achieving planned results. An example here is the Early Recovery Framework Loan to Ukraine.
Pillar 2 also assesses environmental and social impacts based on both the nature of the impacts and
the magnitude of risks, and hence includes an underlying assessment of the robustness of arrangements
to mitigate risks. Projects are rated on a scale of:
Education
Transport
Urban development
Energy
Health
Industry
0
3. Good: Acceptable with minor negative residual environmental and/or social impacts.
Ratings for all projects (or components of multi-sector

projects total 2014 signatures) ranged from 2 (12
projects) to 4 (11 projects), with 30 projects rated 3.
There was considerable dispersion of ratings over this
range within each sector, but sector averages for different sectors were very similar. While industry projects (such as R&D) were least likely to involve negative impacts, projects in other infrastructure sectors
were more likely to involve limited negative impacts
that require mitigation measures.
4. Excellent: Acceptable with positive or neutral residual environmental and/or social impacts.
Pillar 3 ratings are presented in the chapter on

additionality.
1. M
arginal: Not Acceptable, for environmental and/or
social reasons not suitable for EIB financing.
2. Acceptable: Acceptable with major negative residual environmental and/or social impacts.
2014 ReM Report
53
Annex 2:
List of projects signed in 2014
Project
Sector Approved amount
Signed in 2014
Project cost
Mandate contribution
Abraaj North Africa Fund II
MED
Services
20
20
180
SME+RI
Accessbank Line of Credit

Nigeria II
ACP
Credit lines
50
50
100
SME
Accessbank Azerbaijan Loan

for SMEs
EAST
Credit lines
25
25
50
SME
Administrative & Urban

Infrastructure (Ecuador)
ALA Urban development
100
100
257
INF
Advans SA Sicar IIII
ACP
Services
4.5
20
SME
AEP Niamey
ACP
Water, sewerage
21
21
60
INF
Airside Safety Works Roberts

Airport Monrovia
ACP
Transport
22
22
43
INF+RI
PA
Credit lines
200
150
400
SME+RI
Apex Loan for SMEs & Midcaps

(Ukraine)
EAST
Credit lines
400
400
800
SME
Armenia Apex Loan for SMEs
EAST
Credit lines
50
50
100
SME
Astarta Agri-Food and Climate

Change Adaptation
EAST
Industry
50
50
100
SME+CC
Attadamoune (AMSSF II)
MED
Services
SME
BancABC Regional Facility for

SME and Midcaps (B)
ACP
Credit lines
20
20
40
SME
BancABC Regional Facility for

SME and Midcaps (Z)
ACP
Credit lines
25
25
50
SME
Banque de Tahiti Environmental

and MF GL
ACP
Credit lines
14
14
28
SME+CC
EAST
Transport
55
55
163
INF+CC+RI
PA
Transport
350
200
3749
INF+CC
Capmezzanine Fund II
MED
Services
15
71
SME+RI
Chile CCFL
ALA
Energy
150
150
490
INF+CC
Corridor VC Pocitelj - Bijaca
PA
Transport
100
100
225
INF+RI
Credit Agricole Loan for SME &

Other Priorities II
PA
Credit lines
60
60
120
SME+INF
DenizBank Municipal MBIL
PA
Credit lines
100
100
200
SME+INF+RI
Akbank Loan for SMEs and

Midcaps II
Beskyd Railway Tunnel

Bosphorus Tunnel Tranche B
54
Region
ReM Report 2014
Annexes
Project
Development Bank Energy and
Environment Loan
Region
PA
Signed in 2014
Project cost
Energy
170
85
340
Industry
20
10
40
Water, sewerage
10
20
INF+CC
Dhaka Environmentally
Sustainable Water Supply
ALA
Water, sewerage
100
100
493
INF+CC
EAC Microfinance Facility II

(CRDB)
ACP
Services
20
20
40
SME
East & Central Africa PEFF

(BOA Tanzania)
ACP
Credit lines
14
SME

(Crane Bank Uganda)
ACP
Credit lines
28
28
56
SME

(CRDB Uganda)
ACP
Credit lines
20
20
40
SME

(HFB Uganda)
ACP
Credit lines
13
13
26
SME

(CRDB Uganda)
ACP
Credit lines
20
20
40
SME

(HFB Uganda)
ACP
Credit lines
13
13
26
SME
EcoBank Regional Facility III
ACP
Credit lines
81
80
160
SME+RI
Egyptian Pollution Abatement

(EPAP) III
MED
Credit lines
70
70
149
SME+INF
El Shabab Power Plant
MED
Energy
205
205
413
INF+CC
PA
Energy
60
35
125
INF+RI
Electricity Distribution BIH

Eskom Kiwano CSP Project
ACP
Energy
75
75
857
INF+CC
ETAP South Tunisian Gas
MED
Energy
380
380
1009
INF
EU-EDFI Private Sector

Development Facility EEDF
ACP
Credit lines
43
43
90
SME
EuroMena III Fund
MED
Services
20
10
115
SME+RI
PA
Credit lines
200
100
400
SME+RI
EximBank Loan for SMEs

and Midcaps II
First National Bank
MED
Services
12.5
11
35
SME
Fruit Garden of Moldova
EAST
Credit lines
120
120
300
SME+INF+CC
PA
Credit lines
150
150
300
SME
Ghana Financial Sector

Loan III (B)
ACP
Credit lines
20
20
20
SME
HalkBank Loan for SMEs

and Midcaps II
PA
Credit lines
200
200
400
SME
IDF Loan for SMEs &

Priority Projects
PA
Credit lines
50
25
100
SME+INF+RI
ALA
Energy
200
200
1000
INF+CC
Garanti Bank Loan for SMEs

and Midcaps
IIFCL Energy Sustainability

& Climate Action FL
2014 ReM Report
55
Project
Signed in 2014
Project cost
ING Bank Turkey SME

and Mid-Cap Loan II
PA
Credit lines
200
200
400
SME+RI
Intesa Loan for SMEs

& Other Priorities III
PA
Credit lines
35
35
70
SME+INF
ALA
Energy
200
200
400
INF+CC
Isbank Urban Transformation
PA Urban development
200
200
200
INF+CC
Istanbul Earthquake Risk

Mitigation II
PA Urban development
300
100
660
INF
IREDA Renewable Energy

and Energy Efficiency FL
Jiji Mulembwe Hydropower

Burundi
ACP
Energy
70
70
199
INF+CC+RI
Ka Xu CSP Project
ACP
Energy
210
100
569
SME+INF+CC
Kafr El Sheikh Waste Water

Treatment (Egypt)
MED
Water, sewerage
77
77
164
INF
Lake Turkana Wind Power
ACP
Energy
225
225
613
INF+CC
Medipole Hospital
ACP
Health
20
20
419
INF
Megalim Solar Thermal Plant
MED
Energy
150
150
600
SME+INF+CC
Mexico Global Loan for SMEs

& Midcaps
ALA
Credit lines
150
150
300
SME
MHP Agri-Food
EAST
Industry
85
85
172
SME+CC
Microfund for Women
MED
Services
SME
Modernisation Etablissements
Scolaires
MED
Education
70
70
213
INF
Mozambique Financial Sector

Line of Credit (MB)
ACP
Credit lines
10
SME
North Moldova Water
EAST
Water, sewerage
10
10
30
INF
Novastar Ventures East Africa

Fund
ACP
Services
8.25
60
SME
Ouarzazate II (Parabolic)
MED
Energy
200
100
1069
INF+CC
Ouarzazate III (Tower)
MED
Energy
150
50
855
INF+CC
Partenariat BEI-BTK- Reseau

Entreprendre
MED
Credit lines
20
20
40
SME
PEFF III Kenya
ACP
Credit lines
120
50
240
SME
PA
Industry
40
40
92
SME
Petkim Ethylene Plant
56
Region
PG VI Tunisie
MED
Credit lines
200
100
400
SME
Portland Caribbean Fund II L P
ACP
Services
25
23
235
SME+RI
Private Sector Facilities IV
MED
Credit lines
90
90
180
SME
Programme de Modernisation
Routiere
MED
Transport
150
150
340
INF
Projet Energie Guinee
ACP
Energy
60
60
161
INF+CC+RI
ReM Report 2014
Annexes
Project
Region
Signed in 2014
Project cost
PTA Bank Credit Line for SMEs

and Midcaps
ACP
Credit lines
80
80
160
SME
Rehabilitation of Maputo
Airport
ACP
Transport
20
20
57
INF+RI
Renewable Energy HPP Vranduk
PA
Energy
38
38
86
INF+CC+RI
RLRS Loan for SMEs & Other

Priorities
PA
Credit lines
20
20
40
SME+INF
ALA
Transport
50
50
130
INF+RI
PA
Transport
30
30
66
INF+RI
So Paulo Rolling Stock
ALA
Transport
200
200
765
INF+CC
SBI Loan for SMEs and mid-caps
ALA
Credit lines
200
100
300
SME+INF+CC
SGME Loan for SMEs & Priority

Projects
PA
Credit lines
20
20
40
SME+INF+RI
Sonabel Solar Plant Burkina

Faso
ACP
Energy
23
23
71
INF+CC
Southern Africa Microfinance

Facility (ABC)
ACP
Services
10
SME
Southern Africa Microfinance

Facility (Madison)
ACP
Services
4.5
4.5
SME
Synergy Private Equity Fund
ACP
Services
12
11
60
SME
Tajik Kyrgyz Power

Interconnection
ALA
Energy
140
70
282
INF+RI
Taysir
MED
Services
SME
PA
Industry
55
55
115
SME+CC+RI
Energy
170
85
340
Water, sewerage
30
15
60
Comp.
infrastructure
21
21
21
Energy
30
30
30
Industry
35
35
35
Road F-21 Uyuni Tupiza

Road Rehabilitation and City
Bypass
Tofas RDI
TSKB Energy and Environment
Loan
Ukraine Early Recovery
Ulaanbaatar WWS
PA
EAST
84
84
84
Water, sewerage
30
30
30
Energy
15
15
72
INF
Transport
17.5
17.5
84
Water, sewerage
17.5
17.5
84
EAST
Energy
150
150
355
INF+RI
VakifBank Loan for SMEs and

Midcaps
PA
Credit lines
200
100
400
SME+RI
Vestel Elektronik RDI
PA
Industry
60
60
204
SME+RI
Urengoy Pomary Uzhgorod

Gas Pipeline
ALA
Urban development
INF+CC
INF
2014 ReM Report
57
Project
Region
Vlore Bypass
Signed in 2014
Project cost
PA
Transport
24
18
68
INF+RI
Water Sector Communal

Infrastructure
EAST
Water, sewerage
25.5
25.5
73
INF
Yerevan Water Supply

Improvement
EAST
Water, sewerage
18
INF
Zenata Urban Development

Project
Transport
7.5
7.5
40
MED Urban development
135
135
720
Water, sewerage
7.5
7.5
40
Ziraat Bank IPARD MBIL
PA
Agriculture, NR
100
100
270
SME+CC+RI
Ziraat Bank Loan for SMEs and

Midcaps
PA
Credit lines
200
100
400
SME+RI
Region
SME
Local private sector development
ACP
African, Caribbean and Pacific countries + OCT
INF
Social and economic infrastructure
ALA
Asia and Latin America
CC
Climate change mitigation and adaptation
EAST
Eastern Neighbours and Central Asia
RI
MED
Mediterranean partnership countries
PA
Pre-accession countries
Operations for which a contract was signed in a previous year (results reported in a previous year)
Global authorisation. No Pillar 2 rating
58
SME+INF
ReM Report 2014
Annexes
Annex 3:
Tables, figures and boxes
Figures
Tables
Figure 1:
EIB objectives outside the EU......................................................................... 7
Figure 2:
Number of new projects, by region........................................................ 8
Figure 3: New projects in 2014 Contribution
to mandate objectives........................................................................................... 8
ReM Framework............................................................................................................ 9
Figure 4:
Figure 5: Contribution of new projects to local private
sector development by type of operation....................................11
Figure 6: Credit lines supporting SMEs and mid-caps new projects overview.......................................................................................12
Figure 7: Private equity new projects overview........................................13
Figure 8: Microfinance new projects overview...........................................15
Figure 9: AfricInvest II....................................................................................................................18
Figure 10: Easing borrowing constraints for SMEs
MBDP Loan for SME and Priority Projects III..............................20
Figure 11: Contribution of new projects to strategic
infrastructure objective by sector..........................................................23
Figure 12: Energy new projects overview............................................................24
Figure 13: Transport new projects overview.....................................................26
Figure 14: Water and sanitation new projects overview....................27
Figure 15: Health, education and urban development
new projects overview.......................................................................................29
Figure 16: The Energy Sector Recovery Project, Kenya................................31
Figure 17: Mersin wastewater project............................................................................33
Figure 18: Contribution of new projects to climate
change objective by sector............................................................................35
Figure 19: La Venta III........................................................................................................................41
Figure 20: Contribution of new projects to regional
integration objective, by sector................................................................43
Figure 21: Rehabilitating vital road connections in Moldova..............47
Figure 22: Pillar 3 ratings new projects..................................................................48
Figure 23: Operations supported by technical
assistance, by region.............................................................................................50
Figure 24: Operations supported by technical assistance,
by sector..............................................................................................................................50
Figure 25: ReM ratings by pillar.............................................................................................52
Figure 26: Pillar 2 ratings by sector...................................................................................52
Figure 27: Average environmental and social ratings by sector.......53
Table 1: 2014 lending volumes (EUR m)................................................................... 9

Table 2: Credit lines for SMEs, expected results by region.................13
Table 3: Ex post results for eight credit lines.....................................................17
Infrastructure projects direct employment impact.....23
Table 4:
Average tenor provided, by type of operation.........................49
Table 5:
Boxes
Box 1:
Overcoming finance bottlenecks in Mexico................................12
Novastar private equity for social impact...............................14
Box 2:
Supporting a new microfinance
Box 3:
institution in Tunisia..............................................................................................15
Supporting R&D for cleaner, safer vehicles.................................16
Box 4:
Investee company EXAT Agriculture..............................................19
Box 5:
Dime bakery expands into local grain production..............21
Box 6:
Soko Dooel realising export potential........................................21
Box 7:
Projet nergie, Republic of Guinea.......................................................25
Box 8:
Box 9:
Upgrading Montenegro's roads...............................................................26
Box 10:
Basic infrastructure for informal
settlements in Mongolia..................................................................................28
Box 11:
Modernising Tunisia's schools....................................................................29
Box 12:
Connecting underserved rural areas...................................................30
Box 13:
Small-scale hydropower in Bosnia
and Herzegovina.......................................................................................................35
Box 14: Mainstreaming Climate Action: the ReM portfolio
carbon footprint.........................................................................................................36
Box 15:
Investing in cleaner energy in India....................................................37
Box 16:
Encouraging more commuters
on to the railways in So Paolo.................................................................37
Box 17:
Revitalising the horticultural sector in Moldova..................38
Box 18:
Adapting to increased harvest volatility in Ukraine..........39
Box 19:
Rehabilitating Liberia's main airport.................................................43
Box 20:
Fostering regional integration in
the Caribbean through private equity..............................................45
Box 21:
Technical assistance in action.....................................................................51
2014 ReM Report
59
The EIB wishes to thank the following promoters and suppliers for the photographs illustrating this report:
EIB Photolibrary, Rodney Rascona (on behalf of the The Paradigm Project), Iberdrola/JACZ, photographer,
Shutterstock, EXAT Agriculture
Layout: EIB GraphicTeam.
Printed by Imprimerie Centrale on MagnoSatin paper using vegetable oil-based inks. Certified in accordance with Forest
Stewardship Council (FSC) rules, the paper consists of 100% virgin fibre (of which at least 50% from well-managed forests).
The EIB Group consists of the European Investment Bank and the
European Investment Fund.
European Investment Bank

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L-2950 Luxembourg
3 +352 4379-1
5 +352 437704
www.eib.org U info@eib.org
European Investment Fund

37B, avenue J.F. Kennedy
L-2968 Luxembourg
3 +352 2485-1
5 +352 2485-81200
www.eif.org U info@eif.org
Report on results
outside the EU
2014
EIB 06/2015 - QH-AU-15-001-EN-C - ISBN 978-92-861-2345-0 ISSN 2363-0272 doi:10.2867/2687 - EIB GraphicTeam

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2014

n 2014, the EIB continued to strengthen its role as

ReM Report 2014

2014 ReM Report

supply, potentially serving

2.6bn (32%) supporting climate

benefiting daily from improved rail transport

ReM Report 2014

SMEs and mid-cap

First ex post results from credit lines

105 000 jobs

450 000 jobs

3.3bn (41%) supporting access to finance

of projects benefiting from

2.1bn (26%) supporting

utside the EU, the EIB invests in sound projects

New projects financed in 2014

The largest number of new projects was like last

ReM Report 2014

EIB objectives outside the EU

Local private sector

Enhancing access to finance,

Climate action on renewable energy,

small in financial terms, but have a very high impact

improving links amongst

partner countries and with the EU

focused credit lines supporting local private sector

2014 ReM Report

How we measure results

New projects in 2014 - Contribution to mandate objectives

ReM Report 2014

Performance against these benchmarks is monitored

2014 lending volumes (EUR m)

New projects (first signed in 2014)

Note: Republic of South Africa is included under ACP.

checks eligibility under EIB mandates and rates the

rates the quality and soundness of the operation, based

Additionality = EIB inputs market alternative

2014 ReM Report

First ex post results from

105 000 jobs

microenterprises to gain access to

450 000 jobs

ReM Report 2014

he EIB supports local private sector development

2014 also saw the completion of the first projects

Supporting access to credit for

Credit lines for SMEs and mid-caps

2014 ReM Report

Overcoming finance bottlenecks in Mexico

Credit lines supporting SMEs and mid-caps new projects overview

Total loans (EUR m)

Average loan size (EUR 000s)

Average loan tenor (years)

Jobs sustained (total):

Increasing access to finance for first-time borrowers

Financing second-tier bank, improving competition

E xisting companies with

S MEs provide approx.

16 542 jobs sustained in