EIB facilities ELENA. JEREMIE, JESSICA, RSF,

1. Funding mechanisms EIB
EIB Facilities
November 2013
HUDSON
ing. Joost Holleman MBA
Joost.holleman@hudson.com

2. Options;
 Grants (Domestic & Pan-European)
 Tax Incentives
 Foreign Direct Incentives
 European Investment Bank facilities
Our services
 19 years of experience throughout Europe
 Local consultants in 18 European countries;
 Feasibility studies, application, negotiation & administration
 Support to SME’s and Multinationals
 Our experience: all European topics: R&D, Energy, Transport, Training, Life
sciences, ICT
Hudson Financial Incentives
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LINK TOWARDS OUR WEBSITE
nl.hudson.com

3. Economic &
Social Benefit Financial Profitability Risk level
VC
Funding & Financing routes
Green box = content of presentation
Banks
ERR
HIGH
IRR
HIGH
IRR
MEDIUM
IRR
Negative
RISK HIGH
RISK MEDIUM
RISK LOW
RISK HIGH
RISK
LOW / MEDIUM
VC
PURE LOAN
GUARANTEE
EIB facilitiesEIB LOAN
PDA GUARANTEE
GrantsGRANT
TAX Incentive
GUARANTEE Revolving fund
Private Equity
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4. Project loans for large developments in excess of EUR
25m
Intermediated loans are made via local banks
Structured finance provides additional support to
priority projects
Guarantees: helping projects attract new investors
Project bonds: unlocking infrastructure funding
Equity & fund investment to catalyse further activity
Venture capital: helping invest in high-tech and
growth SMEs
Microfinance has benefited from our long term
commitment
Products & Services EIB
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Risk-sharing in research, development & innovation
(RSFF)
Sustainable energy: maximising investment (ELENA)
Green-tech demonstration support (NER300)
Infrastructure project advice for new EU members
(JASPERS)
Urban development technical assistance (JESSICA)
Transport infrastructure cash-flow guarantees (LGTT)
Public-private partnership optimisation (EPEC)
Flexible SME funding (JEREMIE)

5. Loans:
• granted to viable capital
spending programmes or
projects in both the
public and private
sectors. Counterparties
range from large
corporations to
municipalities and small
and medium-sized
enterprises.
Technical Assistance:
•provided by a team of
expert economists,
engineers and sectoral
specialists to
complement EIB
financing facilities.
Guarantees:
•available to a wide range
of counterparties, e.g.
banks, leasing
companies, guarantee
institutions, mutual
guarantee funds, special
purpose vehicles and
others.
Venture Capital:
•requests for venture
capital should be
addressed directly to an
intermediary..
Microfinance:
•granted to professional
and socially-committed
microfinance
intermediaries, such as
microfinance institutions
and microfinance
investment vehicles both
inside and outside
Europe. Transactions in
microfinance take
various forms (loans,
equity, guarantees and
technical assistance).
EIB Facilities
4
ERR
HIGH
IRR
HIGH
IRR
MEDIUM
RISK MEDIUM
RISK
LOW / MEDIUM
EIB facilities
Facilities

6. Structured Finance
•We can give additional
support for priority
projects using certain
instruments with a higher
risk profile than we
normally accept. These
priority areas include
The Project Bond initiative
•a joint initiative by the
European Commission and
the EIB. Its objective is to
stimulate capital market
financing for large-scale
infrastructure projects in
the sectors of transport
(TEN-T), energy (TEN-E)
and information and
communication
technology (ICT).
According to the
Commission, the European
Union’s infrastructure
investment needs to meet
the Europe 2020
objectives in these sectors
could reach as much as
EUR 2 trillion.
The Risk Sharing Finance
Facility (RSFF)
•Investing in complex, long
term research,
development and
innovation (RDI) projects
can be risky. We are able
to lower these risks,
facilitating investment
that will boost
competitiveness, growth
and job creation. The Risk
Sharing Finance
Facility (RSFF)
JESSICA
•Integrated, sustainable
urban-renewal projects
are supported through
JESSICA (Joint European
Support for Sustainable
Investment in City Areas).
A range of sophisticated
financial tools are used
including equity
investments, loans and
guarantees, offering new
opportunities for the use
of EU Structural Funds.
Guarantees for transport
infrastructure cash-flow
(LGTT)
•The high levels of revenue
risk in the early stages of
public-private-partnership
transport projects can
cause difficulties attracting
private sector funding. We
work to overcome
concerns that traffic-
dependent revenue (tolls,
fares etc.) may not reach
medium term targets. The
Loan Guarantee
Instrument for Trans-
European Transport
Network Projects (LGTT)
can partially cover risks for
projects or part-projects
that are deemed of
common interest (as
defined in Decision No
1692/96/EC) and receive
income from user-charges.
EIB Facilities
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7. Sharing PPP experience
(EPEC)
•Public-private
partnerships (PPP) offer
great potential benefits
but also present a unique
set of challenges. The
European PPP Expertise
Centre (EPEC) allows its
public sector members to:
•share experience and
expertise,
•share analysis
•discuss best practice
•help maximise returns.
Flexible SME funding
(JEREMIE)
•Small and medium-sized
enterprises (SMEs) can
access finance and
financial engineering
products through the
JEREMIE programme.
National and regional
authorities can opt to
deploy money from EU
Structural and Social
Funds in the form of
market-driven financial
instruments instead of
offering grants. A major
advantage is that unlike
grants, which can only be
spent once, a pool of
funds can be re-invested
several times. Support is
provided to selected local
financial intermediaries
via national or regional
governments.
Equity & Fund
•We stimulate and catalyse
private capital through
investment in equity and
funds. We work with new
and established fund
managers in traditional
and innovative segments
that are not yet
mainstream.
ELENA
•Many EU towns and
regions lack the necessary
technical expertise and
organisational capacity to
implement large energy
efficiency and renewables
projects. The benefits of
cutting energy use and
pollution are clear, but the
challenge is to guarantee
value for money and
timeliness, as well as
securing extra funding.
ELENA (“European Local
ENergy Assistance”) is
there to help. Run by the
EIB, it is funded through
the European
Commission’s Intelligent
Energy-Europe
programme.
NER 300
•We support the European
Commission as an agent in
the implementation of the
NER300 initiative: the
world’s largest funding
programme for carbon
capture and storage
demonstration projects
and innovative renewable
energy technologies.
EIB Facilities
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8. EUROPEAN INVESTMENT BANK (EUROPE)
 Financing available throughout all regions
 Connected to priorities per state / country
 Connected to long term strategies per country
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9. European Investment Bank (EIB):
 The European Investment Bank was created by the Treaty of Rome in 1958 as the long-term lending bank
of the European Union.
 The task of the Bank is to contribute towards the integration, balanced development and economic and
social cohesion of the EU Member States.
 The EIB raises substantial volumes of funds on the capital markets which it lends on favourable terms to
projects furthering EU policy objectives. The EIB continuously adapts its activity to developments in EU
policies.
 Besides supporting projects in the Member States, its main lending priorities include financing
investments in future Member States of the EU and EU Partner countries.
 The EIB operates on a non-profit maximising basis and lends at close to the cost of borrowing.
 The Bank's consistent AAA rating is underpinned by firm shareholder support, a strong capital base,
exceptional asset quality, conservative risk management and a sound funding strategy.
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10. Loans
 EIB clients are public and private sector bodies and enterprises. The project promoted by the public or
private client must be in line with the lending objectives of the EIB and be economically, financially,
technically and environmentally sound.
 Sectors:The EIB finances a broad range of projects in all sectors of the economy. Projects must adhere to at
least one of the EIB lending objectives.
 Financing Facilities: As a rule, the Bank lends up to 50% of the investment costs of a project.
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11. Loans
 The EIB has two main financing facilities:
 Individual loans: provided to viable and sound projects and programmes costing more than EUR 25 million
which are in line with EIB lending objectives.
 Intermediated loans: credit lines to banks and financial institutions to help them to provide finance to
small and medium-sized enterprises with eligible investment programmes or projects costing less than
EUR 25 million. Microfinance has also been provided by the EIB in some countries.
We lend to individual projects for which total investment cost exceeds EUR 25m. This support is often the key
to attracting other investors. These loans can cover up 50% of the total cost for both public and private sector
promoters, but on average this share is about one-third.
Multi-component loans We also finance multi-component, multi annual investment programmes using a single
“framework loan”. This funds a range of projects, usually by a national or local public sector body, most
frequently regarding infrastructure, energy efficiency/renewables, transport and urban renovation.
Conditions: The project must be in line with our lending objectives and must be economically, financially,
technically and environmentally sound. Financing conditions depend on the investment type and the security
offered by third parties (banks or banking syndicates, other financial institutions or the parent company).
Interest rates: Interest rates can be fixed, revisable or convertible (i.e. allowing for a change of interest rate
formula during the lifetime of a loan at predetermined periods).10

12. We make loans to local banks and other intermediaries which subsequently "on-lend" to the final
beneficiaries:
 Small-and-medium-sized businesses
 Mid-Cap businesses
 Large businesses
 Local authorities
 National administrations
 Public sector bodies
All intermediated loans must further at least one of our public policy goals:
 Increase in growth and employment potential – including SME and Mid-Cap support
 Economic and social cohesion by addressing economic and social imbalances, promoting the knowledge
economy/skills and innovation and linking regional and national transport infrastructure
 Environmental sustainability - including supporting competitive and secure energy supply
 Action for climate-resilient growth
Intermediated Loans
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13. We can give additional support for priority projects using certain instruments with a higher risk profile than we
normally accept. These priority areas include trans-European transport and energy networks and other
infrastructure, the knowledge economy, energy and SMEs.
This support is provided by our Structured Finance Facility (SFF) using a mix of the following instruments:
 senior loans and guarantees incorporating pre-completion and early operational risk
 subordinated loans and guarantees ranking ahead of shareholder subordinated debt
 mezzanine finance, including high-yield debt for SMEs experiencing high-growth or are undergoing
restructuring
 project-related derivatives
Such has been the success of the SFF that its scope was doubled recently to enable us to generate operations
up to a maximum of EUR 3.75bn.
Structured finance
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14. Guarantees & Securitisation
 Within the EU the Bank may provide guarantees for senior and subordinated debt. The guarantee is either
a standard guarantee or debt service guarantee similar to that offered by monoline insurers. Depending
on the underlying funding structure of the operation, an EIB guarantee may be more attractive than an EIB
loan.
 It can provide: higher value-added and lower capital charges - under Basel II, EIB guarantees provide a
zero risk weighting to the guaranteed obligation
 We guarantee large and small projects to make them more attractive to other investors. We provide
guarantees for senior and subordinated debt, either in a standard form or as a debt service guarantee
similar to that offered by monoline insurers. Beneficiaries can be large private and public projects or
partner intermediaries providing SME financing.
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15. Guarantees & Securitisation
Advantages of a guarantee
 Depending on the underlying funding structure of the operation, a guarantee may be more attractive than
one of our loans. It may either provide greater value-added or require lower capital charges. Under capital
adequacy rules our guarantees provide a zero risk weighting to the guaranteed obligation.
Guarantee instruments
 The Loan Guarantee Instrument for Trans-European Network Transport (LGTT) is designed to guarantee
medium term revenue risks from public-private partnership transport schemes. Risk sharing instruments
are also used in the SME funding schemes JEREMIE and CIP schemes, as well as complementing the Risk
Sharing Finance Facility (RSFF) which boosts research, development and innovation.
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16. The Project Bond initiative is a joint initiative by the European Commission and the EIB.
Its objective is to stimulate capital market financing for large-scale infrastructure projects in the sectors of
transport (TEN-T), energy (TEN-E) and information and communication technology (ICT). According to the
Commission, the European Union’s infrastructure investment needs to meet the Europe 2020 objectives in
these sectors could reach as much as EUR 2 trillion.
The Project Bond initiative is designed to enable eligible infrastructure projects promoters, usually public
private partnerships (PPP), to attract additional private finance from institutional investors such as insurance
companies and pension funds.
The Europe 2020 Project Bond Initiative -
Innovative infrastructure financing
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17. Project bonds
Improving credit quality
 This will be achieved by providing credit enhancement to those promoters, whose debt will effectively be
divided into two tranches: senior and subordinated.
 The subordinated debt, or Project Bond Credit Enhancement (PBCE) can take the form of a loan from the
Bank, with the support of the European Commission and is given to the promoter at the outset. It may
also take the form of a contingent credit line which can be drawn upon if the revenues generated by the
project are not sufficient to ensure senior debt service.
 The PBCE underlies the senior debt and therefore improves its credit quality, offering peace of mind to
institutional investors.
 The bonds themselves will be issued by the promoters not by the Bank or the Member State in question.
The support will be available during the lifetime of the project, including the construction phase.
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18. Stimulating equity & fund investment
We stimulate and catalyse private capital through investment in equity and funds. We work with new and
established fund managers in traditional and innovative segments that are not yet mainstream.
Our value added
 A seal of approval for the investment proposal
 Catalytic effect on fund raising
 Promoting best practice in governance
 An experienced investment team with private equity expertise
 Extensive industry knowledge through our economics and engineering specialists
 Early involvement
 Ability to move fast
Equity and fund investments
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19. We make selective investments in funds which have a focused investment strategy addressing EU priority
objectives.
1. Infrastructure & environment: In the EU and in Mediterranean partner countries we invest in equity and
an innovative range of debt funds. To date, we have invested in infrastructure equity funds, infrastructure
debt funds and environmental funds.
2. Carbon funds: We have established a number of market-based instruments to encourage carbon trading in
order to boost market capacity and complement private sector activity.
3. Beyond the EU: We also invest in equity and funds in the Africa, Caribbean & Pacific and in the
Mediterranean regions.
4. Urban areas: We support sustainable urban development through equity investment, loans and
guarantees through the JESSICA initiative.
5. Venture capital and private equity: The EIB Group’s European Investment Fund (EIF) is a specialist provider
of risk finance to small and medium-sized enterprises in Europe.
6. Energy efficiency and renewables: We provide equity capital for energy efficiency and renewable energy
projects in developing countries through our innovative fund-of-funds GEEREF.
Equity and fund investments
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20. Venture capital
Through our venture capital facility, we finance venture capital funds and security packages for funds as well as
offering conditional and subordinated loans. We bridge market gaps by working with the financial sector in
each EU country.
This activity is managed by theEuropean Investment Fund (EIF), part of the EIB Group. The EIF sets-up,
manages and advises venture capital fund-of-funds, most of which are entrusted by third parties such as the
EIB, the European Commission, the Member States and regional authorities.
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21. Sharing risk in research,
development & innovation (RSFF)
Investing in complex, long term research, development and innovation (RDI) projects can be risky. We are able
to lower these risks, facilitating investment that will boost competitiveness, growth and job creation. The Risk
Sharing Finance Facility (RSFF) improves access to debt financing for all types and size of private company and
public institution undertaking RDI projects.
• We share risks with promoters, banks and others
• This attracts other financing partners
• We offer good terms thanks to our AAA rating and non-profit orientation
• We have extensive structuring expertise
• We make a long-term commitment
• Availability of all major currencies
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22. Many EU towns and regions lack the necessary technical expertise and organisational capacity to implement
large energy efficiency and renewables projects. The benefits of cutting energy use and pollution are clear, but
the challenge is to guarantee value for money and timeliness, as well as securing extra funding. ELENA
(“European Local ENergy Assistance”) is there to help. Run by the EIB, it is funded through the European
Commission’s Intelligent Energy-Europe programme.
How ELENA helps
ELENA covers up to 90% of the technical support cost needed to prepare, implement and finance the
investment programme. This could include feasibility and market studies, programme structuring, energy
audits and tendering procedure preparation. With solid business and technical plans in place, this will also help
attract funding from private banks and other sources, including the EIB. So whether it is the retrofitting of
public and private buildings, sustainable building, energy-efficient district heating and cooling networks,
environmentally-friendly transport etc, ELENA helps local authorities get their projects on the right track.
Budget
 Funds are currently available to support projects under the Facility. When funds will be exhausted, a
notice will be posted on this webpage.
Maximising investment in sustainable energy
(ELENA)
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23. We support the European Commission as an agent in the implementation of the NER300 initiative: the world’s
largest funding programme for carbon capture and storage demonstration projects and innovative renewable
energy technologies.
A Cooperation Agreement details the respective roles of the two institutions in implementing the NER300
Decision, notably, as far as concerns the EIB. Monetisation of the 300 million EU allowances set aside in the
New Entrants Reserve of the EU Emissions Trading System for the initiative.
NER300 - Green-tech demonstration support
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24. New and future EU Member States often require technical support to prepare major infrastructure schemes
financed by the Structural and Cohesion Funds. JASPERS (Joint Assistance to Support Projects in European
Regions) provides technical expertise for any stage of the project cycle, covering technical, economic and
financial questions. It is geared to providing advice, ensuring coordination, developing and reviewing project
structures, removing bottlenecks, filling gaps and identifying problems. This helps increase the quantity and
quality of requests for EU funding. The total investment cost of the more than 550 projects supported so far is
more than EUR 60bn.
Advice is given on:
 conceptual development and project structuring;
 project preparation (e.g. cost-benefit analysis, financial analysis, environmental issues, procurement
planning);
 review of documentation: feasibility studies, technical design, grant application;
 compliance with EU law (environmental, competition and others);
 conformity with EU policies..
New EU members’ infrastructure project advice
(JASPERS)
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25.  The beneficiary sectors are:
 trans-European transport energy and telecommunications networks (TENs);
 other transport, including road, rail, river, air and sea transport
 clean-urban and public transport;
 environmental remediation;
 waste management;
 renewable energy;
 water and sanitation services; water risk management.
New EU members’ infrastructure project advice
(JASPERS)
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26. JESSICA
Supporting urban development (JESSICA)
The main benefits of JESSICA
To make Structural Fund support more efficient and effective by using “non-grant” financial instruments, thus
creating stronger incentives for successful project implementation.
To mobilise additional financial resources for public-private partnerships and other urban development
projects with a focus on sustainability/recyclability.
To use financial and managerial expertise from international financial institutions such as the EIB
EIB involvement in JESSICA is threefold:
Advising and assisting national, regional and local authorities in implementing JESSICA
Promoting the use of Urban Development Funds and best practice across Europe
Acting as a Holding Fund, when requested by Member States or managing authorities.
These investments are delivered to projects via urban development funds and, if requested, holding funds.
They must be line with Structural Funds operational programmes agreed for the current programming period.
JESSICA is a policy initiative of the European Commission (EC) developed jointly with the EIB and in
collaboration with the Council of Europe Development Bank (CEB).
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27. Guarantees for transport
infrastructure cash-flow (LGTT)
The LGTT normally guarantees a maximum of 10% of senior debt (20% in exceptional instances) up to a
maximum of EUR 200m per project, following EIB Structured Finance Facility rules. Once the EIB has become a
creditor, amounts due under the LGTT will rank junior to other debt. This support substantially enhances credit
quality, thereby encouraging a reduction of risk margins applied to senior project loans. These savings should
surpass the cost of the guarantee to the borrower. This support is available for as much as five to seven years
after project completion. The EIB and European Commission have jointly contributed EUR 1bn in capital which
could support up to EUR 20bn of senior loans.
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28. Public-private partnerships (PPP) offer great potential benefits but also present a unique set of challenges. The
European PPP Expertise Centre (EPEC) allows its public sector members to:
 share experience and expertise,
 share analysis
 discuss best practice
 help maximise returns.
Limiting EPEC's membership to the public sector helps ensure a free and open exchange of information.
However, the EPEC speaks regularly with the private sector, not least at the twice-yearly Private Sector Forum.
The EIB also provides input as a leading funder of PPPs.
What help?
The EPEC has a full-time executive made up of experienced PPP professionals, serving the 35-strong
membership which includes national and regional authorities both inside and outside the EU. This includes a
helpdesk which can either answer questions or advise on who to contact. In some instances, the executive can
work with members to set up, refine or analyse policy and procedure. However, no advice is given on individual
projects. This is a joint initiative of the EIB, the European Commission and several European public authorities.
It is funded by the EIB and the Commission, with the membership contributing their time and expertise.
Sharing PPP experience (EPEC)
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29. The JEREMIE "toolbox" of financial instruments includes:
 guarantees, co-guarantees and counter-guarantees,
 equity guarantees,
 micro-loans,
 export-credit insurance,
 securitisation,
 venture capital,
 business angel matching funds
 investment in technology transfer funds
 JEREMIE stands for the Joint European Resources for Micro to Medium Enterprises. It is a joint initiative of
the European Commission and the EIB Group, mainly through the European Investment Fund.
JEREMIE
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