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The EIB in the circular economy

Promoting a circular economy is high on the EU policy agenda considering its potential to boost
competitiveness, foster sustainable economic growth and generate new jobs. The EIB is a major partner
for circular economy investments in the EU, and has during the last 10 years co-financed projects worth
EUR 15bn. We are now ready to further support the EU transition towards a circular economy.

The EIB in the circular economy

Circular economy for a more


resource-resilient and competitive EU

Investment cost of EIB co-financed circular


economy projects (2005-2014)
(in EUR bn)

A growing global population and rising standards of living


have increased resource consumption beyond the means of
the Earths finite resources. This prompts a shift from the current linear take-make-use-dispose society towards a more
circular economy. We need to maximise the utility and value
of resources and minimise waste generation.
The development of a more circular economy in the EU
would reduce the dependency on imported raw materials
and could create up to an estimated two million new jobs by
2030, while resource efficiency improvements would reduce
material input needs. Moving to a more circular economy
would also support economic growth and competitiveness.
It is an opportunity for economic and industrial renewal, with
associated investment needs.

Water management

69%

Natural resources and agri-industries

13%

Waste management

13%

Industry and services

4%

Product-to-service

1%
0.20
0.60

1.90

2.00

Total:
EUR 14.9bn

10.20

A circular economy can be achieved by re-thinking and redesigning products, business processes and service models
to ensure that the utility and value of materials are maximised, their wastage throughout the value chain is minimised,
and any waste generated is considered an asset rather than
a liability. This will require development of new product-toservice business models, such as pay-per-use and product
leasing, with a related focus on innovative product design
and the development of new access-over-ownership business models. Further efforts must also be made to increase
resource efficiency through activities aimed at reducing resource consumption, to ensure sustainable natural resource
and material management and use based

my lending needs and potential are clearly much larger. Full


implementation of the current solid waste directives alone,
whose recycling and waste recovery objectives are in line
with a circular economy, would require investment of more
than EUR 40bn by 2020.

The EIB promotes the circular economy

Waste management projects closing loops

Circular economy projects reduce resource use and are eligible for EIB financing on account of their environmental and
climate benefits. Projects that include innovative features in
products, production processes or business models are considered eligible owing to their contribution to innovation,
which is another EIB priority.

With increasing waste generation in many EU countries,


and recycling levels that vary between just a few percent in
some countries to over 70% in others, there is a clear need
for investments in separate collection infrastructure for materials and bio-waste, and related treatment facilities for such
streams. The resulting increased resource efficiency will play
an important role in the further development of a circular
economy in the EU.

Overall, EIB has co-financed circular economy projects worth


around EUR 15bn in the last 10 years, but the circular econo-

While in the past the EIB has mainly focused on municipal


waste management projects, there is now both a need and
potential to expand the lending to projects targeting commercial and industrial waste streams, in particular for the
recycling and recovery of such waste. The associated market
risk is different than for municipal waste, but can be managed under the European Fund for Strategic Investments
(EFSI) and other risk mitigating instruments.

The EIB in the circular economy

A2A Ambiente invests in increased recycling


In a recent project for A2A Ambiente in Milan, the EIB financed a new
glass recycling facility. Since 2014 the plant has produced oven-ready
cullets from source separated glass.
The project also provided new waste collection trucks that enabled
the expansion of the separate bio-waste collection system so that it
now covers the whole city of Milan.
These project components help to close material loops and create a
more circular economy in Milan.

Water management for efficiency


and security

ply purposes and recycling of nutrients from sewage sludge


into high-quality fertiliser.

Water is a valuable but limited and fragile resource. EIB water sector projects contribute to a circular economy by supporting integrated management and efficient allocation of
scarce water resources, improved demand management and
efficient water use all the way to wastewater treatment, reuse and recycling. This includes, among other things, reduction of water losses in production and distribution systems,
recovery of energy from wastewater streams, treated wastewater reuse for industrial, agricultural and urban water sup-

Having made water security a priority, the EIB is also supporting the identification, preparation and financing of projects
aimed at increasing water stewardship in industry, including but not limited to efficiency measures to avoid significant waste of energy and chemicals involved in the treatment and distribution processes. Promising technological
innovations in the water sector, such as resource recovery
from wastewater in households or treatment plants, are also
eligible for EIB financing.

The EIB in the circular economy

LBS

Sustainable management of natural resources


Agriculture and forestry value chains including the agri-food
and pulp and paper industries are highly dependent on natural resources, including land, water, fertile soil, petrochemicals (for fertilizers), other mineral inputs (e.g. phosphates)
and energy. Investments made in these sectors by farmers,
industry, retailers and consumers through resource-efficient
production techniques, sustainable food choices and reduced food waste can contribute to improved resource efficiency and food security at a global level. This would help
producers and processors meet increasing demand for food
and other resources.

The EIB has already financed projects involving the modernisation and upgrading of manufacturing facilities and RDI
activities to improve resource efficiency in the food, pulp
and paper sectors. It has also contributed to financing projects in the paper recycling sector, an example of a circular
economy business with environmental benefits in terms of
preserving climate-relevant forest activities. Moreover, the
EIB has financed bio-based industries (e.g. bio-refineries)
including bio-plastics and green chemistry, which will allow
the substitution of fossil fuel-based products with biological
materials.

The EIB in the circular economy

Producing energy from sewage sludge in Vienna


In 2015 EIB signed a EUR 150m loan to finance the Energy Optimisation Sludge Treatment EOS project.
The objective of this project is to ensure the energy self-sufficiency of Viennas wastewater treatment
plant by using sewage sludge as an energy resource for in-house energy needs.
With this project, 20 million m of methane-rich biogas is expected to be extracted annually from sewage sludge and converted into electricity and heat. This will allow Viennas wastewater treatment plant to
cover 100% of its own electricity needs by 2020 and to reduce its energy costs at the same time.

Rethinking manufacturing focus on innovation and collaboration


Industry cannot continue to grow in the face of volatile rising demand for finite resources. One noticeable
trend is the growing focus on reducing, reusing and recycling materials. This has prompted more and
more companies to start innovating and collaborating on new ways to close material loops. The EIB is actively supporting these innovative projects by financing product innovations and technology to recover
and reuse materials.
But since a circular economy involves more than just using resources more efficiently, another trend is
the shift to new business models, where companies change consumers into users by offering the maintenance, repair and replacement of products as part of their value proposition. In this field, the EIB has supported digital solution projects to enable product-to-service and sharing platforms to be created.

Containerboard plant in Poland


The project consists in a 440000 tonnes per annum containerboard
plant based wholly on the use of local recycled fibre, much of which
would otherwise go to landfill. The product will be used for the packaging of manufacturing companies in Central and Eastern Europe.
The project has also led to an increased waste paper collection rate.
This will contribute to EU environmental objectives in terms of reuse
of materials and reduction of waste. The paper recycling sector is an
example of an existing circular economy business in which waste is
turned into a resource and transformed into a valuable product.

The EIB in the circular economy

Supporting electric car services in Paris


The Paris Bluecars project meets one of the key concepts of a circular economy product-as-service with its clever car-sharing
service. The developers advocate using rather than owning by
offering a car-sharing system to get around the city using 100%
electric vehicles.
This innovative urban scheme is also a real test case for electric
vehicles, which are expected to clock up 60million zero-emission
kilometres a year and result in the reduction of emissions by the
equivalent of 22500cars in the French capital.

EIB circular economy lending products, instruments and services


Lending Blending Advising
Investment needs vary widely depending on a projects scale
and its position in the value chain. We tailor our financing to
the specific needs of the borrower and the project. We offer
a range of risk-bearing instruments, project loans and financial support for funds, as well as technical advisory services.
Our traditional financing products are medium and longterm loans with fixed or variable interest rates. We finance
large projects with direct loans, and smaller ones indirectly

through credit lines to local banks and other intermediaries,


particularly targeting SMEs and Mid-Caps. The EIB also offers
the opportunity to combine its financing with EU grants, depending on the scope and definition of the project.
Projects that are too small to be handled as stand-alone investment loans can be supported through intermediated
loans. The EIB offers support in assessing whether a circular
economy project is eligible for EIB financing, and what lending approach and instrument is most appropriate.

The EIB in the circular economy

EFSI is a EUR 16bn guarantee from the EU budget, complemented by an allocation of EUR 5bn of the EIBs own capital.
Its dedicated governance ensures that it remains focused
on its specific objectives, namely to increase the volume of
higher risk projects supported by EIB Group financing operations and address the market failure in risk-taking which hinders investment in Europe.

The European Investment Advisory Hub, an integral part of


the Investment Plan for Europe, is a single point of entry for
advisory services for investment projects in the EU. Services
available via the Hub include project development support
throughout all stages of the project cycle, as well as upstream or policy advice on market studies, sector strategies,
and project screening. Financial advice is also provided to
assist managing authorities in establishing financial instruments and enhance companies ability to access adequate
sources of financing. More horizontal assistance can be obtained via process and methodological guidance and training on a number of issues related to investment projects,
access to finance and use of EU funds. Public and private entities can contact the Hub via the online contact form (www.
eib.org/eiah) and access a wide range of advisory services,
among which, InnovFin Advisory, JASPERS and ELENA.

With EFSI support, the EIB Group will provide funding for
economically viable projects where it adds value, including
projects with a higher risk profile than in ordinary EIB activities. It will focus on sectors of key importance where it has
proven expertise and the capacity to deliver a positive impact on the European economy.

InnovFin Advisory offers specific (financial) advice for innovative projects to improve access to funding from EIB Group
and/or other financing sources, analyses investment conditions and access to finance challenges and opportunities,
and recommends new financing mechanisms and advisory
services where needed.

EIB support more than financing

Under the advisory mandate from the European Commission


and the Government of Luxembourg, the role of finance in
the transition to a circular economy was analysed. This resulted in an assessment of the fitness for circularity of EIB financing and advisory tools, and a new set of proposed EIB support measures. The mandate has marked the EIBs endeavour
to engage Europes financial and industrial sector in identifying and financing circular economy opportunities and associated transitions.

Circular economy projects with medium to high risk profiles


may be accommodated under the European Fund for Strategic Investments (EFSI), InnovFin and other special financial
instruments with higher risk-taking potential. EFSI is an initiative launched jointly by the EIB Group European Investment
Bank and European Investment Fund and the European
Commission to help bridge the current investment gap in the
EU by mobilising private financing for strategic investments.

EIB financing is supported by specialised in-house staff bringing the know-how required to support the development and
structuring of circular economy projects. In providing such
advisory services, the EIB relies on its expertise in financial
structuring, resource efficiency and the water and wastewater, energy and solid waste management, natural resource,
agri-industry, industry and services sectors and SME support.
EIB advisory support can be accessed and requested through
the newly established European Investment Advisory Hub.

InnovFin Advisory products

SMEs

Midcaps

SME Guarantee

MidCap Guarantee

SME Venture Capital

MidCap Growth Finance

Large Caps

Advisory

Thematic Finance

Advisory

Large Projects

SMEs and small Mid-Caps


< 500 Employees

Mid-Caps
< 3,000 Employees

Large Caps
Typically > 3,000 Employees

SPV, Mid-Caps and


Large Caps

Public and Private Sector


Promoters

Intermediated
SME/Mid-Cap Financing

Intermediated and/or
direct Corporate lending

Direct Corporate Lending

Project Finance and/or


Direct Corporate Lending

Financial Advisory

direct products

indirect products

ELENA (European Local ENergy Assistance) partly bears the


costs involved in the technical support (e.g. for feasibility
studies, energy audits, tendering) that promoters need to
prepare, implement and finance large energy efficiency and
renewable energy projects.

As the EU bank, we provide finance and expertise for


sound and sustainable investment projects in Europe
Information Desk
3 +352 4379-22000
5 +352 4379-62000
U info@eib.org
European Investment Bank
98-100, boulevard Konrad Adenauer
L-2950 Luxembourg
3 +352 4379-1
5 +352 437704
www.eib.org

and beyond. We are owned by the 28 EU Member


States and the projects we support contribute to
furthering EU policy objectives. We are the largest
multilateral lender and borrower in the world and
our 2 300staff can build on more than 50 years of
experience in project financing. We are headquartered
in Luxembourg and have a network of some
30local offices.

EIB 12/2015

EIB at a glance

print: QH-04-15-902-EN-C ISBN 978-92-861-2537-9 doi:10.2867/87830


digital: QH-04-15-902-EN-N ISBN 978-92-861-2541-6 doi: 10.2867/006

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JASPERS provides independent expert advice and capacity-building support to public authorities and final beneficiaries on high quality projects to be co-financed by European Structural and Investment Funds (ESIF), as well as
programmes and sector strategies that deliver EU policy
objectives.