1 EURAILSPEED 2005 Session F: “HSR: The environmentally friendly solution” Milano, - 9 November 2005 H. Marty-Gauquié, Director – Liaison with International Organisations Paris Office, EIB Group

2 BASICS FACTS ABOUT THE EIB  The European Investment Bank (EIB), the financial Institution of the European Union  Created by the Treaty of Rome in 1958  to provide long-term finance for projects promoting European economic and social policies  Loans and guarantees in 2005 : +/- 45 billion €  Borrowings on capital markets : +/- 51 billion €  5 strategic objectives: - Regional development - Lisbon Strategy (“i2i-2010”) - TENs (Trans European Networks) - Environmental Protection and Kyoto Protocol enforcement - Development aid (130 countries)

3  Since Essen (12/94) : 71 billion € invested  Growth Initiative (12/2003) and 30 Priority Projects (12/2004) : EIB commited to further finance up to 50 billion €  « TIF » : TENs Investment Facility  Long/very long term lending (20-35 years)  Risk Sharing Financing (SFF)  Special expertise on PPP projets  Equity or quasi equity financing for « Special Purpose Vehicle » (SPV) involved in TENs projects under development with the European Commission:  Guarantee mechanism (1 billion €) ( )  Securitisation mechanism. MAIN SOURCE OF BANKING FINANCE FOR TENs

4  : 12.7 billion € (+ 10 billion for « urbain rail »)  Meeting several EU objectives:  Economic and social cohesion/economic integration  Sustainable development/Kyoto objectives (–8% GHG emissions v/v 1990)  EU Transport Policy Goals (EC-White Book 2001) -EU-15 : to absorb +38% traffic increase ( ) -10 NMS : to preserve rail freight market share - To promote an European single rail market (interoperability/standardised rail infrastructure/free access)  Competitiveness : - Reinforce rail industry’s potential - Improve service quality provided to clients - Improve rail operators’ productivity. FINANCING THE RAILWAY SECTOR : strategy elements

5 Projects must prove added value for :  Sustainable development  Reinforce existing capacities instead of creating new infrastructures  Environmental rules : European standards and best environmental impact mitigation  If necessary : studies on the valuation of carbon credits.  An European single rail market  Interoperability, intelligent traffic management systems (ERTMS, EDI, etc.)  Priorirty to « bottlenecks» and « cross border » projects. FINANCE THE RAIL : projects selection criteria (1)

6 Projects must prove added value for :  Promotion of railway efficiency  Priority to projects removing capacity or geographical restrictions  Enhancing productivity improvement (staff/material)  Infrastructure compatibility towards free access/free provision of service  Improvement of service provided to the customer. FINANCE THE RAIL : projects selection criteria (2)

7  Each project must go through a multidisciplinary evaluation covering the following aspects : - economical- financial -technical- environmental  A specific methodology for rail projects : « RAILPAG » (Railway Project Appraisal Guidelines)  Developped in common with DG TREN, WB and EBRD, with the technical support of UIC, CER, EIM and UNIFE.  Helps to assess the economical and social effects/advantages of projects and alternative solutions SEM : « Stakeholders/Effects Matrix ». PROJECT APPRAISAL

8 Each project must:  Comply with European environmental policies and standards  If possible, go beyond EU standards  In pre-accession countries, if needed: phased implementation of EU standards  Implement an EIA, run according to EU Directive on EIAs and propose satisfactory solutions for the EIB:  If necessary, implement a second EIA  Implement the « Best Available Technique » (BAT), in accordance with UE- IPPC Directive.  In developping countries: meet internationally recognised social and labour safeguard measures, and propose satisfactory solutions for the EIB. SUSTAINABLE DEVELOPMENT : EIB principles

9 If deemed appropriate, rail projects can benefit of the CCI under one or several of its instruments:  CC Financial facility « CCFF » (500 million €)  For projects reducing GHG emissions  Where promoters fall under the EU’s ETS (Emission Trading Scheme).  CC Technical assistance facility « CCTAF » (10 million €)  To identify project’s potential with carbon credits  To establish credits’ transaction documentations.  Carbon Funds  Prefinance the sale of potential credits to be generated by a project  2 funds in progress (with the WB and the EBRD). THE EIB CLIMATE CHANGE INITIATIVE (CCI)

10  TENs and rail projects are on top of EIB priorities  EIB intervention is decisive mainly because of :  Its capacities in financial engeneering  Its expertise/contribution in the evaluation/definition of projects  Its catalyctic effect on other sources of finance.  A prerequisite for EIB’s intervention is the demonstration of projects’ added value for:  Sustainable development  Creation of an European single rail market  Strenghtening of rail sector’s competitiveness  Improvement of service provided to the customer. CONCLUSIONS

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