1 / 17

Financing Gas Distribution Infrastructure for Transport in EU-Russia Energy Dialogue

This article discusses the role of the European Investment Bank (EIB) in financing gas distribution infrastructure for gas-fuelled transport in the EU-Russia Energy Dialogue. The EIB's objectives, financing lifecycle approach, and activities outside of the European Union are also explored.

cmaxwell
Download Presentation

Financing Gas Distribution Infrastructure for Transport in EU-Russia Energy Dialogue

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. EIB Financing of Distribution Infrastructure for Gas-fuelled TransportEU-RUSSIA ENERGY DIALOGUE Gunnar Muent Brussels, 24th June 2011

  2. European Investment Bank - background The European Investment Bank is the European Union‘s long-term financing institution. The Bank acts as an autonomous body set up to finance capital investments furthering European integration by promoting EU policies. • EIB was created by the Treaty of Rome in 1958 • EIB is a not-for-profit, policy driven institution • EIB is 100% owned by the 27 EU member states • EIB has subscribed capital of EUR 232.4 bn as of 2009 • EIB is AAA/Aaa rated by rating agencies • EIB funds itself on the capital markets: EUR 79.4 bn in 2009 • EIB signed loans amounting to EUR 79.1bn in 2009 • EIB is the largest multilateral financing institution

  3. European Investment Bank - objectives • Within the European Union • Cohesion and convergence • Small and medium-sized enterprises (SMEs) • Environmental sustainability • Knowledge Economy • Trans-European Networks (TENs) • Sustainable, competitive and secure energy • Outside of the European Union • Private sector development • Infrastructure development • Security of energy supply • Environmental sustainability • Support for EU presence in Asia and Latin America via Foreign Direct Investment (FDI) • Under EU Mandates • Pre-accession • European Neighborhood • Development

  4. Criteria Projects financed by the Bank must be: • economically justified • technically viable • financially self-supporting and • environmentally sound • appropriate procurement procedures are required (International Competitive Bidding when appropriate)

  5. EIB and EIF Financing Lifecycle Approach 1 Risk Capital CIP Resources (SME) 2 RSFF (SME / MidCap) 3 4 Investment Loans • Facility: High Growth Innovative SME Scheme (GIF), Ecotech • Purpose: IP financing, technology transfer, seed financing, investment readiness • Target Group: VC Funds, Business Angels • EIF Product: Fund-of-Funds • CIP Guarantee schemes • Growth financing for SMEs • Formal VC Funds, CLOs • SME guarantees (loans, microcredit, equity/mezzanine, securitisation • RSFF • RDI financing • SMEs/MidCaps, Banks, PE Investors (sub-investment grade) • Loans (incl. Mezzanine), Funded Risk Sharing Facilities with Banks (Investors) • Investment Loans • RDI financing • MidCaps/Large Corporates/Public Sector Entities (investment grade) • Loans, Guarantees Bank Loans and Guarantees Formal VC Funds Seed/Early Stage VC Funds Business Angels Entrepreneur, friends, family Later Stage Counterparts Seed / Start-Up Phase Emerging Growth Phase Development Phase

  6. EIB products • Medium- and long termloans • Direct loans of EUR 25-100m; larger amounts are possible • Intermediated loans: For smaller projects, indirect lending through credit lines to local financial intermediaries (sub-loans of between EUR 0.1 and EUR 12.5m) • Equity for infrastructure funds under the EPF (up to EUR 150m) • Readiness of cooperation with other financial institutions asfinancial intermediaries as guarantors, as partner in project identification and as financial arrangers

  7. EIB Activities Outside the Union • Supporting EU development and cooperation policies in Partner Countries • EIB external mandates: Pre-accession countries: • Candidate countries - Croatia, Turkey and Former Yugoslavia, Republic of Macedonia • Potential candidate countries - Western Balkans European Neighbourhood: • Mediterranean Neighbourhood (FEMIP) • Eastern Europe, Southern Caucasus, Russia Development: • Africa, Pacific and Caribbean (ACP) • South Africa • Asia and Latin America (ALA)

  8. Prospects for lending in Eastern Partners • Amount of Mandates • 2007- 2013 Eastern Neighbourhood Mandate: EUR 3.7bn • Eastern Partner Facility: EUR 1.5bn • Signed so far: EUR 1 bn • Operations under appraisal and awaiting signature: EUR 2bn • Strategy: Fully absorb Mandates within their period of validity Focus on: • economic infrastructures • environment • Access to EU markets • Strengthening physical links with the Union and FDI

  9. Sectors and beneficiaries • Eligible sectors: • Energy • Environment • Transport • Telecommunication • Industry • Beneficiaries: • State / Central Government • Regions • Municipalities • Utilities • Private companies • Project Finance Structures • PPPs

  10. EIB RSFF funds complement other sources of debt capital available for low/sub investment grade RDI intensive corporates • EIB RSFF funds are highly attractive for potential beneficiaries because of: • Highly attractive terms & conditions (AAA rating and non-for-profit pricing) • Long maturities of up to 10 years or more • Direct EIB participation of up to EUR 300m per transaction (depending on rating) • Strong technology/industry expertise • EIB does not sell assets on the secondary market (buy and hold strategy) • No cross selling (just long-term lender) • Signalling Effect: EIB as a quality stamp • Debt and Mezzanine Debt Product Own Resources EUR 1bn EUR 1bn EIB (RSFF) 2007 - 2013 Approx. EUR 10bn Debt Financing Banks Investors Final Beneficiaries Low/Sub Investment Grade RSFF - A new Source of Risk Capital

  11. Examples of what can be financed – LNG terminals • Examples: • Sagunto LNG plant - TEN • Grain LNG Terminal – TEN • Fluxys LNG Terminal – TEN • Offshore LNG Toscana • Gate LNG Terminal • … EIB lending volume since 2000: EUR 3.6 bn

  12. Examples of what can be financed – passenger cars • CNG fuelled engine development: • Major European OEMs • Suppliers EIB lending volume: > EUR 200 m per year

  13. Examples of what can be financed – marine engines • RDI for LNG fuelled marine engines: • Financing of investments of major European OEMs • Suppliers EIB lending volume: > EUR 100 m per year

  14. Examples of what can be financed - ships • Purchase of LNG fuelled ships: • first operations under appraisal …

  15. Examples of what can be financed – LNG/CNG • first operations under appraisal

  16. EIB lending to investments in LNG/CNG technologies - track record • What can be financed ? • Infrastructure • Acquisition of vehicles/ships • RDI for Systems/Components • Eligible investment costs • Capex • Opex & capex for R&D • Capex & opex for innovation • Eligibilities: • Trans European Networks – TENs • Protection of the Environment & Sustainable Communities • Knowledge Economy – RDI • Convergence

  17. THANK YOU !! Gunnar Muent Head of Innovation & Competitiveness Department European Investment Bank g.muent@eib.org

More Related