World’s richest bank invests in employment and quality of life

STRANGE as it may seem the world’s richest bank uses words like sustainability, creating employment, preserving the environment and improving the quality of life.

The phrases are not just the feel-good factor in its annual report. They are an essential part of the brief from its owners the member states of the European Union.

Just last week the European Investment Bank announced its latest loan €115 million to underpin development at Cork Airport. Other recent loans went to the new Maritime College, Luas, €200m for the ESB and €150m for small and medium-sized Irish industry.

The member states invest in the bank, which was set up to further the policies of the EU. As such it sees itself as serving its shareholders which ultimately are the citizens of the union.

Next year it will lend €45 billion mostly from funds borrowed on the open market making it the world's biggest nongovernmental borrower.

It borrows from all over the world too. The latest lender is the Chinese who are investing their savings to fund activities in Europe.

Unlike traditional banks it does not wait for a country to be stable or for returns to be certain before it becomes involved. For instance as soon as the wall came down in Berlin, it got involved in rebuilding Eastern Europe.

One of its tasks is to contribute to building an information and knowledge-based European economy in line with the strategy adopted in Lisbon in 2000 by the member states.

It has €20bn to lend for all stages of this over the next three years, from education to research and development in any country making a good enough case.

Environmental protection and improvement is a top priority for the bank and accounted for 40% of its loans last year, covering reduction of greenhouse gas emissions and renewable energy projects.

Ireland is well represented in the Luxembourg-based bank. One of the seven vice presidents is Michael Tutty, while the director general for lending operations in Europe is Terry Brown and director for lending in Ireland, the Nordic Countries and Britain is Tom Barrett.

Perhaps the strangest fact of all about this bank is that it makes a profit every year. Last year the net profit amounted to €1.168bn which, as a non-profit organisation, was put back into the fund.