EIB Investments in Education outside the European Union Didier Bosman 13 December 2017 Corporate Presentation 2017 18/12/2017 1
Overview 1. EIB Group 2. EIB’s Innovation & Skills programme 3. Education lending 4. Conditions for EIB financing 5. Examples of projects 18/12/2017 European Investment Bank Group 2
The EIB: the EU bank ‣ Natural financing partner for the EU institutions since 1958 ‣ Around 90% of lending is within the EU ‣ Shareholders: 28 EU Member States Investing in Europe’s growth European Investment Bank Group 18/12/2017 3
The EIB: capital breakdown European Investment Bank Group 18/12/2017 4
W e are the world’s largest provider of climate finance >25% worldwide 35% in the world’s developing regions EIB’s 2015 Climate Strategy We are increasing our climate commitment: USD 100bn over the next 5 years European Investment Bank Group 18/12/2017 5
The EIB at a glance ‣ Largest multilateral lender and borrower in the world ‣ We raise our funds on the international capital markets ‣ We pass on favourable borrowing conditions to clients ‣ Some 450 projects each year in over 160 countries ‣ Headquartered in Luxembourg and has 40 local offices ‣ Around 3 000 staff: ‣ Not only finance professionals, but also engineers, sector economists and socio-environmental experts ‣ Almost 60 years of experience in financing projects European Investment Bank Group 18/12/2017 6
We deliver impact where it’s needed JOBS HEALTH EDUCATION WATER 4.4m jobs in small 10m people with 890 000 students 25m people businesses benefiting from EIB benefiting from safe access to improved projects drinking water health services TRANSPORT ENERGY URBAN DIGITAL 960m additional 4m households 120 000 households 11m people with passengers powered by EIB in social and new or upgraded projects affordable housing connections European Investment Bank Group 18/12/2017 7
Overview 1. EIB Group 2. EIB’s Innovation & Skills programme 3. Education lending 4. Conditions for EIB financing 5. Examples of projects 18/12/2017 European Investment Bank Group 8
Our priorities Environment Infrastructure Innovation SMEs EUR EUR EUR EUR 16 .9 bn 19 .7 bn 13 .5 bn 33 .6 bn 18/12/2017 European Investment Bank Group 9
Slowing productivity in the EU Groupe Banque européenne d’investissement 18/12/2017 10
Enablers of competitiveness: human capital Shortfalls in human capital development Europe’s economy, which is based on Education expenditure (% of GDP) knowledge-intensive manufacturing and related services, will generate a growing 10% of the gap 7 demand for young people with excellent estimated to post-secondary training and a relevant be for 6 skill-set. education infrastructure 5 Nevertheless, the EU spends only slightly more than 6% of its GDP on education 4 Other compared to the US and South Korean Tertiary 3 education spending of around 7.3% of Gap in tertiary GDP 2 education a Despite its importance for a knowledge- major risk for 1 EU com- intensive economy like the EU, the gap is petitiveness most pronounced in tertiary education , 0 United South Korea EU where EU spending is more than 40% States below US or South Korean levels. Source: OECD 18/12/2017 26/03/2015 European Investment Bank Group 11
Overview 1. EIB Group 2. EIB’s Innovation & Skills programme 3. Education lending 4. Conditions for EIB financing 5. Examples of projects 18/12/2017 European Investment Bank Group 12
Innovation and Skills references 18/12/2017 European Investment Bank Group 13
Innovation and Skills (Knowledge Economy) R&D Innovation Education 14
EIB Lending to «Innovation & Skills» Total Lending 2000-2016: EUR 182 bn 20,000 160 150 18,000 18.3 bn 140 123 16,000 16.1 bn 16.5 bn 120 15.6 bn Total Lending volume (EUR m) 108 Total number of operations 14,000 104 13.5 bn 13.4 bn 95 100 12,000 95 12.5 bn 76 10,000 80 10.4 bn 10.9 bn 73 9.3 bn 10.7 bn 66 8,000 60 10.2 bn 48 56 7.1 bn 57 55 6,000 37 45 6.2 bn 40 27 5.1 bn 4,000 18 3.6 bn 20 2,000 2.2 bn 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: EIB European Investment Bank 18/12/2017 15
EIB Lending to «Innovation & Skills» Lending by sector 2000-2016 2 bn 2 bn 1% 290 m 558 m 1% 63 m 0% 3 bn 0% 0% 2% 3 bn 2% 5 bn 3% 8 bn Industry 4% Education Telecommunications 64 bn Services 35% SMEs & MidCaps 28 bn 15% Healthcare Transport Energy Construction Urban development Water, sewerage Solid waste Agriculture, fisheries, forestry 32 bn 18% 35 bn 19% Source: EIB Total: EUR 182 bn European Investment Bank 18/12/2017 16
Source: EIB Total Signature Volume (M EUR) 18/12/2017 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 5,000 0 Germany Italy France Spain United Kingdom Poland Lending to Innovation 2000-2016 : Total EUR 182 bn Sweden EIB Lending to «Innovation & Skills» Finland Hungary Denmark Austria Portugal Turkey Belgium Czech Republic Greece European Investment Bank Netherlands Ireland Slovenia Romania Slovakia Luxembourg Cyprus Serbia Latvia Switzerland Estonia Lithuania Bulgaria Israel Tunisia Croatia Ecuador Regional - EU countries Regional - EU Malta Albania Liechtenstein Morocco Ukraine Norway 17 Georgia Bosnia and Herzegovina
EU: Education Reference Objectives • At least 95% of children between the age of four and the age of compulsory schooling should participate in pre-school education; • The proportion of 15-year-olds with poor literacy, mathematics and science should be less than 15%; • The rate of 18- to 24-year-olds who left the education and training system prematurely should be less than 10%; • At least 40% of people aged 30 to 34 should graduate from higher education; • At least 15% of adults should participate in lifelong learning activities; • At least 20% of higher education graduates and 6% of 18-34 year olds with an initial vocational qualification should have completed part of their education or training abroad; • The employment rate of graduates (those between 20 and 34 years with at least a level of secondary education and graduated less than three years ago) should be at least 82%. 18
Investing for Youth Investing in Skills Facilities • Universities/research facilities • Schools for upper secondary/tertiary education • Social housing for students and mobile employees • Buildings for Public Employment Services (PES) Vocational training programmes Skills • Operational costs eligible • Private & public sector promoters • Ceiling: average costs of vocational training per pupil per country Student loans & mobility programmes • Student loans : • Link between loans and the costs incurred during studies • Eligible costs broadly defined EUR 3 billion • Mobility programmes for apprentices & young employees: annually 18/12/2017 19
EIB Lending to Education Lending to Education 2000-2017 6,000 5,000 Total signature volume (m EUR) 4,000 3,000 2,000 1,000 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* * as of 30.11 Total : EUR 40 bn 20
EIB Lending to Education Lending outside of Europe 2000-2017* Albania 13m Jordan 40m Ecuador 70 m Serbia Tunisia Non-EU Ukraine 75 m 70m 666 m 9m 2% Turkey EU Dominican 100 m Rep. 39.8 bn 5 m 97% Morocco Regional - 283 m Africa 1% 2 m Total over period: EUR 40 bn * as of 30.11 21
EIB Lending to Education Lending by Education type 2000-2017* Technical Sports, culture and and support education vocational Pre-primary education 187 m secondary 140 m 1% education 0% 1.6 bn 4% Primary education 3.5 bn Higher education 9% 15.5 bn 38% Secondary education 8.8 bn 22% Education general 10.7 bn 26% * as of 30.11 22
Overview 1. EIB Group 2. EIB’s Innovation & Skills programme 3. Education lending 4. Conditions for EIB financing 5. Examples of projects 18/12/2017 European Investment Bank Group 23
The conditions for direct EIB financing Projects funded by the bank must be: In line with EU objectives (eligibility) Financially bearable Justified economically Technically viable Justified from a social and environmental point of view Use of the appropriate procurement procedures are essential 18/12/2017 European Investment Bank Group 24
The conditions for direct EIB financing A minimum project size Proper structuring in legal and financial terms Acceptable risk profile for the EIB given its credit policies Adequate guarantees (eg Region, State, ...) Comprehensive legal due diligence on the legal framework, statutes, etc. 25
EIB's overall approach to the education sector The education sector is conceived in a broad way: Higher Education and Research Centres Lower cycles Vocational training and apprenticeship Cultural Education Sport in the educational setting Student housing Transversal operations to improve accessibility or improve energy efficiency Student Loans Public research Teacher training 18/12/2017 European Investment Bank Group 26
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