Transparency is vital for accountability of the European Investment Bank's intermediary lending

CEE Bankwatch Network and Recourse are calling on the European Investment Bank to be more transparent about where its money ends up, pointing out that the bank lags far behind its peers. In a new briefing, prepared as part of a submission to the EIB’s Transparency Policy review, the groups compare EIB’s disclosure of lending through financial intermediaries – like banks and private equity funds – to that of peer institutions, such as the International Finance Corporation, Green Climate Fund and European Bank for Reconstruction and Development.

“It’s a black hole.” says Kate Geary, Co-Director of Recourse. “Even the China-led multilateral, the Asian Infrastructure Investment Bank, outperforms EIB when it comes to letting the public know where its money ends up. Financial intermediary lending is much higher risk than lending directly, due to its hands-off nature, so it is vital EIB comes clean. How else can we be sure it is living up to its new climate commitments to tackle fossil fuel financing?”

CEE Bankwatch Network published a blog exploring case studies of where EIB intermediary lending has caused social and environmental harms. “Ilovac in Croatia is an example of a plant built in a Natura 2000 protected area without an adequate environmental assessment, but civil society groups became aware of the EIB’s role only after it was built. The situation is similar for the Blagoevgradska Bistrica cascade in Bulgaria, which received a loan from the EIB in 2012; the EIB disclosed this information only in March 2020. The Vinča waste incinerator project in Belgrade, Serbia, is also an intermediary project. Paradoxically, the EIB had declined to finance it directly, as it would likely interfere with Serbia’s ability to meet EU recycling targets when it becomes a member, but the EIB-financed Marguerite II Fund has remained a shareholder in the project company.”