Newsletter 11/2011 - From Brussels angle

INTERVIEW with Matthias Kollatz-Ahnen, Vice-President, European Investment Bank

European Investment Bank supports quality of life enhancement by financing sound investment projects in the region

Mr Kollatz-Ahnen, how does the European Investment Bank operate in South East Europe? What is the difference in approach to EU members, candidate countries and potential candidate countries?      

From the European Investment Bank (EIB) perspective, the approach of the Bank to all these countries is very similar. Through financing of sound investment projects the Bank also supports the reduction of regional development disparities, strengthening of economic competitiveness, increase of living standards and enhancement of the quality of life in this region.

Additionally, in the candidate and potential candidate countries, the Bank fosters the integration process with the EU, helps them meet the EU accession criteria. The harmonisation with the EU economic developments is part of good preparation for EU membership once they are invited to join the Union.

The European Investment Bank recently presented its 2010 activities and perspectives for 2011. Could you highlight past and planned activities of most relevance to our South East European readers?    

In the late nineties, the EIB financing in the Western Balkans’ region was focused on urgent reconstruction and repairs to damaged infrastructure – bridges, railways, ports, airports and roads, in line with each country’s priorities at the time.

Apart from the support to the infrastructure projects, in the years to come, we would like to continue the development of activities in new sectors, such as health, education and Research and Development for Innovation (RDI). One of the key responses from the EIB to requests from governments in the region in fighting the impact of the global economic and financial crisis has been support to small and medium enterprises (SME) investments (EUR 1.4 billion signed in 2009 and 2010, with very rapid utilisation by partner financial institutions for SME lending).

Last but not least, the Bank will increasingly finance projects contributing to the climate action, i.e. investments based on renewable energy resources, and projects reducing carbon emissions by inter alia increasing energy efficiency and the development of environmentally friendly transport.

Does the EIB co-finance projects with EU’s pre-accession financial instruments? What is the EIB role in the Western Balkans Investment Framework and what are the opportunities this new donor coordination mechanism offers for the countries of the region?

The Western Balkans Investment Framework (WBIF) is an initiative whose purpose is to facilitate the preparation and the financing of priority projects in the framework of the EU pre-accession process.

The WBIF is developed jointly by the EIB with the European Commission, and other International Financial Institutions: the European Bank for Reconstruction and Development (EBRD) and the Council of Europe Bank (CEB) as well as EU Member States and blends available grants and loans on the priority projects for the region.

The first annual report of the WBIF, released on 25 March 2011, shows that one year after its launch, the WBIF has approved 81 grants, for a total of EUR 139 million, in support of 73 projects of a total cost in excess of EUR 6 billion, for which loans in excess of EUR 3 billion have been or will be granted by International Financial Institutions. These grants concern both technical assistance (69) and investment co-financing (12). There is a relatively balanced distribution by sector, with the environment accounting for 49%, followed by transport (26%), energy (16%) and the social sector (9%). Out of the total WBIF portfolio, 18 grants for EUR 36 million concerned 16 EIB projects, supported by EIB loans of EUR 1.8 billion, which are often co-financed by European Bank for Reconstruction and Development (EBRD) and Council of Europe Investment Bank (CEB) loans as well as financing from other multilateral and bilateral banks. WBIF was successful in becoming “one shop” for interested projects. Still, until now it has been too complex internally and we want it to become more of a “one pot”.

What were the structure and the amount of the EIB lending in the Western Balkans in 2010?

Last year the EIB signed financing contracts amounting to a level of EUR 3,3 billion in Turkey and in the Western Balkan candidate and potential candidate countries. The EIB is the largest international financier in this region. The EIB considers all accession and candidate countries together, therefore Turkey is also involved in this regard.

The major portion of the EIB lending went in 2010 to Turkey (EUR 1.9 billion) followed by Serbia (EUR 690 million), Croatia (EUR 511 million), Bosnia and Herzegovina (EUR 72 million) The Former Yugoslav Republic of Macedonia (EUR 52 million), Albania (EUR 51 million) and Montenegro (EUR 49 million).

As far as the individual sectors are concerned, the major beneficiaries of the EIB lending were the small and medium sized enterprises (EUR 1.3 billion), services (EUR 695 million) and transport (EUR 441 million) followed by energy (EUR 315 million), telecommunications (EUR 250 million) and water and urban infrastructure (EUR 250 million).

How do you view the current and future development opportunities in South East Europe and the possible cooperation of the Regional Cooperation Council and the EIB in this context?

Regional integration and cooperation will remain essential for each country of the region on its path towards EU membership. This is in particular true for large energy and transport projects, essential to support the economic development of the region. The Regional Cooperation Council, together with the existing sectoral cooperation bodies, will contribute to timely political decisions on these projects and we very much welcome its enhanced role for the Western Balkans region in close coordination with the WBIF.

Matthias Kollatz-Ahnen, a German national, is the EIB Vice President since October 2006. He previously worked as Member of the Management of the Hessen Trust Agency (LTH), Director of the Hessen Investment Bank (IBH) and Deputy Head of the Department for Building, Town Planning and Housing in the Hessen Ministry of Economic Affairs, Transport and Rural Development. Kollatz-Ahnen has held an Award of a Doctorate in Engineering by the Technical University of Berlin since 1988. 


Matthias Kollatz-Ahnen, Vice-President, European Investment Bank (Photo: courtesy of Mr. Kollatz-Ahnen)

Matthias Kollatz-Ahnen, Vice-President, European Investment Bank (Photo: courtesy of Mr. Kollatz-Ahnen)