The European Investment Bank

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What is the European Investment Bank?

The European Investment Bank (EIB) is the European Union’s (EU) bank, owned by the EU member states – the bank’s only shareholders.

The EIB has an AAA credit rating due to its wide portfolio of investments, which spreads risks. It can raise money at a cheaper rate than private debt and equity providers. As the EIB does not make commercial returns, it is a cheaper long-term source of finance than private equivalents.

The EIB primarily invests in credit (where the EIB assumes financial institutions’ credit risk to encourage them to lend), transport, and energy projects.

EIB financed provided by sector, 1959-2017, nominal

The EIB supports projects by investing directly, and by derisking them.

When investing, the EIB provides loans, guarantees, and equity to projects. It also has a share in the European Investment Fund (EIF), which invests in small and medium-sized enterprises (SMEs).

The EIBs derisking service advises governments on how to make projects bankable. This provides reassurance to private investors, encouraging private investment.

Where does the EIB invest?

Most of the EIB's investments have been in EU projects, but 9% have been invested in other regions.

Compared to other countries, the UK is the fifth highest recipient of EIB investment. It is unlikely that the UK would remain a major recipient of EIB finance if it leaves the EIB Board of Directors after Brexit.

Top 10 country recepients of EIB investment, 1973-2017

Outside the EU, the enlargement countries, EU applicants and potential EU applicants, have received the most EIB investment.

EIB investment outside the EU has also increased over the last 20 years. The enlargement countries have benefited most from this trend, but these investments remain modest in comparison to investment in EU member states.

EIB finance by region excluding EU 1959-2017

Investments outside the EU focus on meeting EU aims, such as developing energy and transport networks in the European Free Trade Association (EFTA) countries and promoting regional integration in Eastern Europe.

What projects has the EIB supported in the UK?

The EIB has invested primarily in UK energy, transport, and water projects. Recent projects include:

The EIB has invested €165bn in UK projects, just under 9% of its total investments since 1973. The UK share of investment rose to 10% in 2015 after former Chancellor George Osborne made increasing EIB investment a government priority. It has since declined to 9% in 2016, and 4% in 2017.

EIB finance for UK projects annually, by sector 1973-2017

Within the UK, the EIB has invested primarily in London, Scotland, and the North West *. These regions will be most affected if the UK loses access to EIB finance once it leaves the EU.


While the UK is in the EU, it remains eligible for EIB finance, although The Guardian reports that the EIB and EIF have put additional requirements on UK projects. The Times also says that the EIB has restricted the supply of lending to the UK since the Government triggered Article 50 in March 2017. 

Since the EU referendum, only 39 deals with the UK (collectively worth just under €3.1bn) have been finalised. In the 18 months before, there were 74 deals, (collectively worth over four times as much, €13.5bn). There have been no new deals since June 2017.

EIB investments in UK projects, Jan 2015 - Dec 2017

EIB officials, however, say UK lending is declining because there is less demand for EIB finance. The EIB President, Werner Hoyer, says that UK projects are not requesting EIB finance because of uncertainty about the UK’s future relationship with the EIB.

What has the UK contributed to the EIB?

After joining the EU, the UK became a member of the EIB, with a 16% capital share. The UK has contributed €3.5bn and has €35.4bn of ‘callable capital’. ‘Callable capital’ is a contingent liability, i.e. money which the UK would be obliged to pay if the EIB suffered losses it was unable to cover using its accumulated reserves.

The UK’s capital share has been a contentious issue, as the UK contributes a greater percentage of EIB capital than it receives as a percentage of EIB investment.

Percentage of total EIB investments in UK projects, 1973-2017

What would losing access to EIB finance mean for the UK?

As EIB finance is a cheaper source of finance than private equivalents, losing access to it would increase the cost of finance for UK projects.

If these higher costs are passed to taxpayers and consumers, then bills could increase – particularly in energy and water, where the EIB has lent extensively to UK projects. Water UK, the industry body for water companies, argues that consumers could face higher water bills if regulated water companies lose access to EIB finance.

Although some investors argue that the EIB has crowded out private investment, the EIB may have also stimulated additional private investment. By undertaking due diligence for and investing in novel and riskier projects, it sends a positive signal to other private investors. EIB investment in the Thames Tideway Tunnel, for example, may have reassured Allianz, Amber Infrastructure, and Dalmore Capital, the other private investors in the project.

Does Brexit mean the UK will leave the EIB?

When the UK leaves the EU, it will leave the EIB unless a separate agreement is negotiated. Under Article 308 of the Treaty on the Functioning of the EU, only EU member states can be EIB members. The European Commission argues that the UK should cease being a member of the EIB following withdrawal.

Chancellor Philip Hammond, however, said in June 2017 that he wanted continued access until exit, and "it may be beneficial to maintain a relationship" in the future. Responding to a parliamentary question, David Davis, Secretary of State for Exiting the EU, said that the UK "will be looking to maintain an ongoing relationship". The joint EU-UK report on Brexit phase one also notes that the UK wants to explore a “continuing arrangement between the UK and the EIB”.

But maintaining a relationship will be difficult. If the UK were to remain an EIB member, it would require the EU27 unanimously agreeing to amend Article 308.

Would the UK get anything back if it leaves the EIB?

This depends on the value of the UK’s callable capital, whether the UK is entitled to a share of the EIBs accumulated profits and when the UK will be paid back. Estimates have ranged from €10.2bn to €3.5bn by 2054.

The UK-EU joint report on phase one of the Brexit negotiations agreed that:

  • The EIB will reimburse the UK’s paid-in capital in 12 annual installments, starting in 2019.
  • The UK will guarantee its paid-in capital until EIB lending undertaken while a member is recovered.
  • The UK will guarantee its callable capital until EIB lending undertaken whilst a member is recovered.
  • The UK will retain EIB board privileges and immunities until EIB lending undertaken while a member is recovered.
  • The EIB will not reimburse the UK a share of the EIBs accumulated profits.
  • After withdrawal, UK projects will not be eligible for EIB operations reserved for member states.

Could the UK set up a domestic replacement?

Without a final deal on the EIB, several commentators argue that the UK should set up a domestic infrastructure bank.

But the Government has not signalled it will do this. In the 2017 Autumn Budget, the Chancellor promised that the Government is "ready to step in to replace European Investment Fund lending if needed", though provided no details. EIF lending is only part of the EIB’s overall investments.

A UK replacement would be resource intensive. Werner Hoyer has said that it would take 10 years and significant upfront capital investment for the UK to set up a replacement with equivalent capacity.



Further information

  • Enlargement countries: Albania, Kosovo, Macedonia, Montenegro, Serbia, and Turkey
  • Mediterranean countries: Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine, Syria, and Tunisia
  • European Free Trade Association countries: Iceland, Liechtenstein, Norway, and Switzerland Southern Caucasus: Armenia, Azerbaijan, and Georgia

* Figures for 2017 are incomplete as they are reported on an annual basis

** These figures only include regional investments. Multiregional, credit line, and global loans finance are not included. Between 2001 and 2016, region-specific investments accounted for 66% of the EIBs UK investment

Update date: 
Wednesday, December 13, 2017