By Marc Jones and Jan Strupczewski LONDON/BRUSSELS (Reuters) -EU governments have agreed to lift the annual spending of the bloc's powerful European Investment Bank (EIB) lending arm to 100 billion
EU Boosts EIB Lending Limit to €100 Billion for Energy and Defense
By Marc Jones and Jan Strupczewski
LONDON/BRUSSELS (Reuters) -EU governments agreed on Friday to lift the annual lending of the bloc's powerful European Investment Bank to 100 billion euros ($115 billion) this year and treble its funding for the EU's defence industry.
The new annual lending ceiling is more than 10 billion euros above the amount the EIB lent last year and 5 billion higher than 95 billion euros the bank's President Nadia Calvino set as a target at the start of the year.
"The governors have unanimously increased the financing ceiling for 2025 to a record 100 billion euros, stepping up financial support in three key areas: energy grids, with a record target of 11 billion euros, security and defence with a target of 3.5 billion euros, and TechEU, supporting Europe's technological leadership," Calvino told reporters.
European nations are scrambling to ramp up their defence spending amid pressure from U.S. President Donald Trump who has signalled plans to reduce the decades-long U.S. security backstop for the continent.
The lending decision comes just days before a NATO summit in The Hague where the alliance's members are under pressure to raise their defence commitments.
The increased lending limits will allow the EIB, the EU's lending arm owned by EU governments, to more than treble its funding for defence-related projects from 1 billion euros last year and be well above the 2 billion euros it had flagged would be spent back in January.
However, the bank's defence-related lending is only a fraction of the hundreds of billions of euros that EU governments are expected to spend on boosting their militaries in the coming decade.
The EIB is prohibited from investing directly in weapons or ammunition but it can lend for so-called "dual use" purposes, such as GPS systems, helicopters, drones, or buildings and infrastructure for army bases.
It has signed off on funding for one such base in Lithuania near the border with Belarus where German troops are due to be permanently deployed on foreign soil for the first time World War Two.
The increased EIB lending is set to funnel money into other areas as well including technology innovation and renewable energy.
It follows a mid-year review of its operational plan and comes after it got approval last year to raise its so-called gearing ratio, which sets out a nominal maximum for the amount of loans on its balance sheet as a percentage of its subscribed capital.
The EIB, the biggest multilateral lender in the world, will pump 70 billion euros into the development of EU technology firms over the next three years.
The programme, called Tech EU, aims to help Europe better compete with China and the United States in the race for cutting-edge tech like supercomputing, robotics and artificial intelligence as well as renewable energy.
The 70 billion euros funding is to be split into 20 billion euros for equity and quasi-equity, 40 billion euros for loans and 10 billion for guarantees in 2025-2027.
The EIB cash is to mobilise 250 billion euros of private investor funding and complement broader European Commission efforts to support startups and higher risk ventures.
($1 = 0.8727 euros)
(Reporting by Marc Jones; Editing by Jamie Freed and Toby Chopra)
