EIB set to broaden defence investment scope later this month

The European Investment Bank’s board of directors will examine a proposal to further expand eligibilities to boost financing for defence projects on 21 March, Nadia Calviño said on Wednesday.

This will ensure that “excluded activities are more precisely defined and as limited as possible in scope”, the head of the EU’s lending arm told the EIB Group Forum.

If the proposal is approved by shareholders — meaning, EU member states — later this month, this will constitute the second time in a year that the EIB’s mandate is expanded to allow investments in predominantly military projects.

Calviño said on Wednesday that a further expansion would enable the bank’s current defence programme, worth €8 billion to 2027, to be embedded “into a new cross-cutting and permanent public policy goal”.

Areas that could benefit from EIB investments would include barracks and storage facilities, land and aerial vehicles, drones and helicopters, radars and satellites, land border protection, military mobility, critical infrastructures, cybersecurity, anti-jamming technologies, military equipment, seabed infrastructure protection and research, Calviño explained.

In a letter she sent to EU leaders to outline her proposal on Tuesday, seen by Reuters, she however made clear that the EIB would keep in place a ban on financing weapons and ammunition.

“We will shortly convene a meeting with national promotional banks to reinforce our cooperation in mobilising public and private investment in this area.,” she also told the EIB Group Forum.

“More than ever, there is a need to join forces, and have a coordinated approach, where each institution focuses where it can provide more value. These changes reflect the EIB Group’s readiness to remain responsive and relevant in a shifting global landscape,” she added.

Calviño’s proposal came as the European Commission unveiled a ReArm Europe plan meant to ramp up defence spending across the bloc that includes a new €150 billion instrument to provide member states with EU-backed loans as well as more fiscal leeway.

Expanding the EIB’s mandate was also among the five measures outlined by European Commission President Ursula von der Leyen.

EU leaders are scheduled to study the Commission’s proposal at a special summit on Thursday in Brussels dedicated to defence and Ukraine, with first decisions expected at another gathering on 20-21 March.