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European Investment Bank

Investment bank of the European Union

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EIB Group’s headquarters in Luxembourg
Caroline Martin · CC BY-SA 3.0 igo

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The EIB focuses on the areas of climate, environment, small and medium-sized enterprises (SMEs), development, cohesion and infrastructure. It has played a large role in providing finance during crises including the 2008 financial crisis and the COVID-19 pandemic. Over 60 years since its inception in 1958 to 2018 the EIB has invested over 1.1 trillion euros. In 2025, the EIB signed €86 billion in new financing, while total EIB Group financing reached a record €100 billion. It primarily funds projects that "cannot be entirely financed by the various means available in the individual Member States".

The EIB is one of the biggest financiers of green finance in the world. In 2007, the EIB became the first institution in the world to issue green bonds. In 2019 it committed to stop funding fossil fuel projects by the end of 2021. The EIB plans to invest 1 trillion euros in climate-related projects by 2030 including a just transition. The EIB is not funded through the budget of the EU. Instead, it raises money through the international capital markets by issuing bonds. The EIB is rated triple-A, the most credit-worthy rating on the bond market, by "the Big Three" credit rating agencies: Moody's, Standard and Poor's, and Fitch. Each member state pays capital into the EIB's reserves which is broadly in line with their share of EU gross domestic product.

The EIB was founded by the Treaty of Rome, which came into force on 1 January 1958. It was the first of the world's regional development banks and is sometimes referred to as the largest multilateral development bank (MDB). The EIB was established to facilitate equitable development in the EU through lending to regions that are less developed and to support the EU's internal market. The EIB is active in 140 countries throughout the world. It makes around 10% of its investments outside the EU to support the European Union's development aid and cooperation policies.

The EIB has been criticised and caused controversy for various actions and inactions of its own (or projects it funded), including: insufficient stakeholder consultation, lack of organisational transparency, climate change response, tax avoidance, and staff harassment.

History

The European Investment Bank was founded by the Treaty of Rome, brought about the creation of the European Economic Community (EEC), which came into force on 1 January 1958. At the time the role of the bank was to provide financing in the form of loans for Europe's infrastructure projects.

1960s

In 1962 the bank was authorised to finance projects also outside the European Community (EC), which was created in 1957 by six member states – Italy, France, West Germany, Luxembourg, Belgium and the Netherlands. These countries had signed the Treaty of Rome to increase the cooperation among the European countries after World War II. Also in 1962, the EIB issued its first loan carried out in cooperation with the International Bank for Reconstruction and Development. The bank loaned funds to three Italian companies: Sincat and Celene in Sicily, which needed funds to build a petrochemical complex, and Mercure in Lucania, to exploit a seam of lignite to produce electricity.

In 1968 the EIB moved from Brussels to Luxembourg City, opened an office in Rome and adopted the global loan facility for small and medium-enterprises (SME) financing. The growing economies among the member states of the European Community at the end of the 1950s and through the 1960s meant that the countries themselves were able to finance their infrastructure development, which lead to the EIB playing a supporting role.

1970s

The 1973–1975 recession in Europe and the first enlargement of the European Community changed the EIB's role. The financial turmoil affecting the initial EC members made it more difficult for the individual nations to pursue their national policy objectives; the addition in 1973 of three new countries to the European Community – United Kingdom, Ireland and Denmark led to the EIB's first capital enlargement. The larger financial base, coupled with the development of European-wide policies at the European Parliament, led the bank to draft its own regional lending policy starting from 1974.

Under its new policy and a more diversified economic and infrastructure development, the EIB expanded its lending to include industrial development loans in the depressed industrial regions of the growing EC membership. The bank benefited from the creation of a new structural fund, the European Regional Development Fund (ERDF), founded in 1975. The ERDF was created to provide financial support for the development and structural adjustment of regional economies, economic change, enhanced competitiveness as well as territorial cooperation throughout the EU.

The EIB was the first European Community institution to directly handle the construction of its own headquarters. The purchase of the site on the Kirchberg plateau was agreed to by the Luxembourg government and the contract between the grand duchy and the bank concluded in November 1972.

1980s

In the 1980 the EIB moved its headquarters to a new building, designed by the British architect Sir Denys Lasdun. The complex known as West Building was designed in the brutalist style on the Kirchberg plateau. Construction began in 1974, inaugurated in 1981 and extended in 1995.

In the 1980s the EIB became responsible for assisting associate countries such as Greece, Spain, and Portugal in achieving requirements for EC admission. In 1981, Greece joined the EIB and five years later, in 1986, Spain and Portugal did the same. In 1987 the bank began focusing more on loans to finance small and medium-sized enterprises, as well as 'innovative' companies, telecommunications and urban transport initiatives among EC members.

After the fall of the Berlin Wall in 1989, the bank started to finance projects in former Soviet states, lending to Poland, Romania, Hungary, Bulgaria, the Czech Republic, and Slovakia. The EIB increased investment in the region toward the late 1990s as these countries prepared their applications to join the 15 members of what by then had become the European Union (EU).

1990s

In 1991 the bank contributed to the foundation of the European Bank for Reconstruction and Development (EBRD) and in 1993 it extended its activities to the Baltic countries (Estonia, Latvia and Lithuania) and to Latin American and Asian countries. In 1994 the European Investment Fund (EIF)—whose logo depicts a bridge symbolising the connection between public and private finance—was established. In 1995, Austria, Finland and Sweden joined the EIB.

The European Investment Bank made its first borrowing operation in euros in 1997, over a year before the new European currency was launched, on 1 January 1999. In the same year the bank adopted a new logo which consisted of three elements: a central blue stripe, representing Europe, and two grey lateral shapes, representing the headquarters in Luxembourg.

2000s

In 2000 the EIB Group was created and the European Investment Bank became the majority shareholder of the EIF, the specialist arm for providing risk capital. Also in 2000 the Cotonou Agreement – signed in Benin's largest city by the 15 member states of the European Union and 78 African, Caribbean and Pacific Group of States (ACP Countries), replaced the Lomé Convention (1975). Under the ACP-EU Partnership Agreement, the EIB expanded its cooperation with non-EU countries outside Europe having agreements with the Union.

Following the Lisbon European Council in 2000, the EIB changed objectives. The bank continued providing infrastructure and policy support to the European Union, as well as contributing to achieving the Lisbon summit's stated objective of making Europe a high-technology and knowledge-based economy.

In 2004, the EIB received a mandate from the European Union for operations in Russia, Belarus, Moldova and Ukraine. In the same year the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, Malta and Cyprus entered the European Union, followed by Bulgaria and Romania in 2007 and Croatia in 2013.

From 2002, the bank and the European Commission started coordinating their efforts in investments aimed at mitigation and adaptation to climate change. In 2007 the EIB issued the first Climate Awareness Bonds on the capital markets, the world's first Green Bonds. The funds raised were earmarked to match disbursements to EIB lending projects in the field of renewable energy and energy efficiency.

2010s

The East Building, inaugurated in 2008 on the Kirchberg plateau was designed by Ingenhoven Architekten in association with Werner Sobek. It was the first building in continental Europe to obtain a Bespoke Building Research Establishment Environmental Assessment Methodology (BREEAM) certification of "very good".

The European Fund for Strategic Investments was launched in 2014 led by the European Commission and the EIB. Part of the Investment Plan for Europe, it initially aimed to mobilise €315 billion and was then extended to €500 billion by 2020. In 2016 the bank launched the Economic Resilience Initiative which supports regions outside Europe significantly affected by the refugee crisis through investments supporting growth, jobs, infrastructure and social cohesion. In 2019 the bank agreed to stop funding fossil fuel projects by the end of 2021.

2020s

In 2020 it announced the 'Climate Bank Roadmap 2021–2025' which will include stopping funding for all high carbon projects. As part of the European Guarantee Fund (EGF) to tackle the economic consequences of the COVID-19 pandemic the bank made available €200 billion of additional financing. The bank is funding both efforts at containing the economic effects of the crisis as well as healthcare related projects which; address immediate health-related emergencies, research vaccines and mechanisms to limit the spread of the virus e.g. testing.

As the 2022 Russian invasion of Ukraine entered its third year and while the European Industrial Defence Strategy programme was debated, it became apparent that EIB "policy" or "its rules explicitly" forbid defence investment. On 18 March 2024 more than half of the member states signed a letter asking the EIB to reconsider its policy against defence expenditure.

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