European Investment Bank’s Economic Resilience Initiative

1. European Investment Bank’s Economic Resilience Initiative Matteo Rivellini, Head of Division, Croatia, Slovenia and Western Balkans, Operations Directorate European Investment Bank, Luxembourg

2. By the end of 2015, over 1 million refugees and migrants had fled to Europe (UNHCR, 2016) EconomicResilience Initiative Workshop

3. 27 August 2015 Western Balkans Summit in Vienna focused on Connectivity, enhancing regional cooperation and EU-Integration EconomicResilience Initiative Workshop

4. 27 August 2015 Discovery of 71 dead refugees near the Austrian-Hungary border overshadowed the Vienna Summit 27 August 2015 - Discovery of 71 dead refugees near the Austrian border with Hungary overshadows the Vienna summit 27 August 2015 - Discovery of 71 dead refugees near the Austrian border with Hungary overshadows the Vienna summit EconomicResilience Initiative Workshop

5. As a consequence, the focus of the Vienna Summit changed from Connectivity to the Migrant Crisis EconomicResilience Initiative Workshop

6. EIB Operational Response to the Refugee Crisis In 2015, the EIB, in addition to starting new operations, identified existing projects that could be amended to rapidly deploy funds to finance expenditures connected with the refugee crisis. These operations benefit from favorable financing conditions: Increased financing of individual projects (up to 100% of eligible project cost; cap not applicable in co-financing with EU funds) Late financing or longer maturities where relevant Today, 23 approved operations are expected to finance refugee-related projects in 6 EU countries and in 3 countries/regions outside the EU 18 operations have been fully or partially signed, for a total amount of EUR 3.6bn for refugee accommodation, municipal and social infrastructure as well as increasing access to finance for SMEs. So far, refugee-relevant allocations have materialised under one credit line in Germany (EUR 131m) Most operations are framework loans or MBILs with only a window or possibility for providing finance for refugee-related expenditure. In 8 operations, the refugee content represents more than half of the investment cost; these are financing housing/refugee accommodation, healthcare and rural/urban renewal

7. 27 August 2015 Discovery of 71 dead refugees near the Austrian border with Hungary overshadows the Vienna summit 27 August 2015 - Discovery of 71 dead refugees near the Austrian border with Hungary overshadows the Vienna summit 27 August 2015 - Discovery of 71 dead refugees near the Austrian border with Hungary overshadows the Vienna summit Large refugee populations have had a significant social and economic impact on host countries EconomicResilience Initiative Workshop

8. 27 August 2015 Discovery of 71 dead refugees near the Austrian border with Hungary overshadows the Vienna summit 27 August 2015 - Discovery of 71 dead refugees near the Austrian border with Hungary overshadows the Vienna summit 27 August 2015 - Discovery of 71 dead refugees near the Austrian border with Hungary overshadows the Vienna summit On 6 August 2016, a storm with strong winds and flooding hit Skopje and the western parts of Macedonia, leaving 21 people dead and dozens injured or missing EconomicResilience Initiative Workshop

9. ‘’The refugee crisis and in the longer term, migration represent humanitarian and developmental challenges both in the European Union and its neighbourhood. It is about building economic resilience: supporting key infrastructure in these countries - schools, healthcare and basic services like water and energy. But it is also about supporting the private sector and entrepreneurship which will provide jobs and opportunities.“ EIB President Werner Hoyer, European Council, June 2016

10. Introducing the EIB’S Economic Resilience Initiative Request from the European Council in March 2016 EIB set up the Economic Resilience Initiative to support regions outside Europe affected by the refugee crisis Initiative will provide loans and grants to support growth, employment, infrastructure and social cohesion in the Southern Neighbourhood and Western Balkan countries Endorsed by Brussels European Council in June 2016 / Bratislava European Council in September 2016 Social sectors: health, education and human capital SMEs and Microenterprises: boost job opportunities by providing support to the private sector to foster economic integration Water, Sanitation & Waste: improved access to safe drinking water has knock-on impacts in countries where poor water supply is a major cause of disease Post disaster/conflict recovery & risk reduction Energy: investment in energy generation and transmission infrastructure is key for economic development Sustainable transport: road projects and inter urban rail links are important for regional economic integration Overall approach Economic Resilience Initiative Focus Sectors

11. Understanding the economic rationale of the Economic Resilience Initiative in the Western Balkans and Southern Neighbourhood

12. Delivering the EIB’s Economic Resilience Initiative The Economic Resilience Initiative is to be delivered via 3 Building Blocks of activity • Aims to replicate the Juncker Investment Plan beyond Europe. • Allows EIB to diversify its customer and loan portfolio and have a bigger impact on the resilience of target countries. Projects are riskier than conventional operations. • Vinca Belgrade waste to energy project financing (Serbia) • Belgrade airport concession financing (Serbia) • Lending to foreign-owned banks with local security • State owned corporates with no recourse to the State • Increase activities under existing instruments in terms of infrastructure and private sector support. • Direct loans are typically allocated to projects valued >EUR 25m. Under the ERI, the EIB also aims to provide smaller loans to support smaller scale novel projects. • Railway Nis-Dimitrovgrad(Serbia) • Route 6 Road Project Kijeve to Peja • (Kosovo*) • Corridor VC Zenica North • (Bosnia & Herzegovina) • Montenegro Railways Project (Montenegro) • Tirana Urban Regeneration (Albania) • Generates social impact by focusing on private sector projects that would not otherwise be pursued due to their high risk. • Targets sectors/business models when: • risk-adjusted expected returns are lower, or • contractual risk mitigants cannot • be adequate, or • for finance sector operations: countries bear weak regulation, currency volatility and/or lack of benchmarks • Collaboration with UNDP/ClearlySo • Life sciences/universities with • no recourse • Start-ups • Microfinance • Funds concessional lending, technical • assistance and impact finance for key projects that may otherwise be overlooked for more commercially attractive projects. • The grant element may make up to 30-50% of • the financing package. • Municipal Framework Loan (Serbia) • Skopje Waste Water Treatment Plant • (FYROM) • Secondary schools rehabilitation (Kosovo*) Examples Examples Examples Examples *This designation is without prejudice to positions on status, and is in line with UNSCR 1244 and the ICJ Opinion on the Kosovo Independence Declaration

13. European Investment Bank’s Economic Resilience Initiative Matteo Rivellini, Head of Division, Croatia, Slovenia and Western Balkans, Operations Directorate European Investment Bank, Luxembourg