BRUSSELS (Reuters) – The European Investment Bank (EIB) will relax its lending rules for dual-use military and civilian projects to finance more security and defense-related investments, it announced on Friday the European public bank.
EU leaders last March asked the EIB to change its lending policy, which currently excludes loans for purely military projects, to enable Europe to increase its production capacity in defense matters following Russia’s invasion of Ukraine.
The EIB will in future waive the requirement that dual-use projects derive more than 50% of their expected revenue from civil applications, and replace this requirement with any plausible civilian use.
This measure will still exclude the financing of combat planes, cannons, tanks or ammunition, which will suit countries which feared that the bank would lose its AAA rating if it started lending for purely military projects.
Read also…
On the other hand, the EIB’s scope of activity will be extended to equipment and infrastructure capable of meeting defensive, military or police needs as well as civil ones, such as reconnaissance, surveillance, protection and control of spectrum, decontamination, research and development, equipment, military mobility, border control and protection of other critical infrastructure, as well as drones.
This will particularly help Eastern European countries, which are more concerned about a possible Russian invasion and benefit from EIB lending rates that are cheaper than they can get on the market.
“We will strengthen and accelerate our support for the European security and defense industry while preserving our financing capacity and the highest environmental, social and governance standards,” said EIB President Nadia Calvino, who presented the plan at the meeting of EU finance ministers in Luxembourg on Friday.
“As the financial arm of the EU, we must help ensure the peace and security of Europe,” she added.
The EIB has a budget of 6 billion euros to provide loans to the European security and defense sector.
The public bank will also strengthen its cooperation with the European Defense Agency (EDA).
(Report Jan Strupczewski; French version Diana Mandiá)
©2024 Thomson Reuters, all rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. “Reuters” and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.