European Commission criticises the EIB’s role as a development bank

The European Investment Bank (EIB) has for years dedicated around 10% of its lending to operations outside the EU, in particular under its so-called External Lending Mandate (ELM). The ELM is a system under which the EIB benefits from a budgetary guarantee from the EU to support its development operations – set at a level of EUR 32.3 billion for the 2014-2020 period. As such, the European Commission is responsible for ensuring that the EU guarantees are wisely used by the Bank, and that reports are made annually to the European Parliament and Council on the EIB’s performance.

Despite the Commission’s recent evaluation of the EIB gives an overall positive assessment of the soundness of EIB operations, for the first time clear critical lines have emerged on the need to better align the Bank’s activities to the EU development policy objectives. Let’s take a look at the few most important ones:

The EIB needs to raise the bar on Human Rights due diligence

The European Parliament flagged this issue in its latest report on the EIB, just as we did in our Going Abroad report back in 2016 and in a recent briefing:the EIB is responsible for conducting serious due diligence on the Human Rights impacts of the projects it finances. The European Commission has now taken its turn to flag the same weakness in the operations of the EIB, mentioning that “Human Rights due diligence should be an integral part of ELM project preparation”.

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