The European Investment Bank (EIB), known as the world’s largest multilateral lender, is set to significantly increase its investment in defense and security, raising its funding from €1 billion to €2 billion by 2025. During a press conference on Thursday, the group president emphasized a proactive stance in addressing the challenges within these sectors, stating, “We are not a defense ministry.”
By 2025, the EIB aims for a total investment target of €95 billion, which will support a range of initiatives including clean technology, artificial intelligence, affordable housing, and climate action, while earmarking €2 billion specifically for Europe’s defense and security industries.
Nadia Calviño, EIB Group President, clarified during the bank’s 2024 results presentation, “Let me be clear: we are not a defense ministry. We are Europe’s investment bank, and we are fulfilling our mandate with a very proactive approach.” This statement comes in the wake of the European Commission’s call in March 2024 for the EIB to revisit its lending policies to include financing for military projects, thus enhancing Europe’s defense production capabilities.
When approached by reporters, Calviño refrained from confirming whether the EIB would support purely military initiatives. Instead, she reiterated the bank’s commitment to playing a critical role in the defense sector while ensuring its financial capabilities remain intact. “This is the only sector where the EIB has taken a notably proactive approach—constantly assessing the market and identifying opportunities for impactful investment,” she stated.
Last year, the EIB had already doubled its backing for eligible security and defense projects to €1 billion, with plans to reach €2 billion by 2025. The group has broadened its focus on dual-use investments encompassing areas such as border protection, military logistics, space technologies, and cybersecurity.
Currently, the EIB is in the process of evaluating 14 projects expected to gain approval shortly. Additionally, the European Investment Fund is collaborating with various investment funds dedicated to enhancing security and defense.
As the world’s premier multilateral financial institution in terms of assets, the EIB boasts a AAA credit rating. Nonetheless, there are concerns among some EU member states—particularly those with neutral positions—over whether financing defense could potentially threaten the Bank’s credit rating.
During a European Parliament event in December, EU Defense Commissioner Andrius Kubilius criticized the EIB’s comparatively modest investment in defense against its substantial commitments to green financing. He noted, “Amid €1 trillion allocated for green financing, only €6 billion is designated for defense under the Strategic European Security Initiative. This imbalance is concerning because investing in defense equates to investing in peace.”
According to a report by Mario Draghi on competitiveness, the EU needs to invest between €700 billion and €800 billion annually over the next decade to modernize its economy, bolster security, and promote both green and digital transitions. Achieving these investment goals will require collaboration between public and private capital.
The European Commission has tasked the Luxembourg-based EIB with maximizing its potential to draw private investments, addressing the investment gaps in crucial sectors such as defense and decarbonization.
In 2024, the EIB successfully mobilized €100 billion for EU energy security projects, encompassing grid improvements, interconnectors, renewable energy, and industries focused on achieving net-zero emissions. Additionally, investments totaled €38 billion to promote social cohesion and €51 billion to facilitate the green transition, climate initiatives, and environmental sustainability.
Calviño emphasized that strengthening Europe’s climate resilience and competitiveness are vital for future success, urging that enhanced investments in energy security should prioritize sectors that drive the green transition and support innovative enterprises. “Every euro invested in prevention and adaptation saves €5 to €7 in future reconstruction and repairs,” she concluded.
Photo credit & article inspired by: Euronews
