The Commission proposal for a new European Investment Bank (EIB) mandate to lend outside the European Union contains several improvements compared to the previous version and includes various points that were raised by NGOs in the past. However, it leaves many concrete aspects to further decisions and allows a broad interpretation of important obligations. And above all, it increases the role and mandate of the EIB despite the Bank’s poor record and in contrary to the result of the external lending mandate review.
Counter Balance is pleased to see an increased emphasis on development objectives, promotion of human rights and environmental sustainability and improved EIB due diligence, project appraisal and monitoring processes in this proposal. Thus while the recognition of the above is very welcome, there is no indication of how the EIB will concretely apply these obligations in practice. Likewise, while the Decision calls for systematic ex ante development impact assessment and monitoring of the projects, there is nothing about the implementation of these new procedures. That would mean the Decision leaves to the EIB to elaborate its procedure and content for its development assessment, which is extremely worrying considering the vagueness and poor quality of the current EIB procedure in that matter.
With that in mind, we urge the European Commission, the Council and the European Parliament to press further in concretising this proposal and tying EIB lending as concretely as possible to legally enforceable criteria.
We also have major concern about many of the sectors invoked to justify increased EIB lending, notably climate change and global loans, and urge the EP and EC to secure major changes in the institutional culture and practice of the EIB before empowering it to extend its lending capacities.
Given this array of evidence that the EIB is not yet suited for a development role, plus the increased onus within the Decision precisely on development, we strongly oppose the recommendations that EIB receives the €2bn optional mandate for a new climate mandate, increase its overall investments and extend the range of financial instruments offered, and undertake concessional lending by mixing EIB money with EU grants.
European Union governments must resource and empower other institutions than the EIB to make progress on poverty reduction and environmental goals. There is a need to reshape the overall EU development finance architecture. This approach is in line with the key priority of the aid effectiveness agenda to reduce fragmentation and duplication among institutions. As it currently operates, we suggest that the scope and extent of EIB lending operations outside the EU with the Community guarantee be progressively reduced and become more selective according to few and clear priorities, until such time as the Bank can demonstrate consistent fulfillment of its development obligations.
Read Counter Balance briefing on the Wise Persons’ Panel report evaluating the external lending mandate of the European Investment Bank here
Download the full statement here
