EIB lending Schiphol airport €350 million to build a new terminal and new pier
The European Investment Bank (EIB) is the European Union’s nonprofit long-term lending institution, that is publicly owned, and whose shareholders are the member states of the EU. It says it uses its financing operations to bring about European integration and social cohesion. The member states set the bank’s broad policy goals. It aims to support sound investments which further EU policy goals, and it says one of its objectives is environmental sustainability. Another is developing trans-European Networks of transport and energy, and as such it has funded many airport projects and airport expansions. It approved lending nearly €4 billion for the first phase of the new Terminal 3 at Frankfurt Airport. It is now lending some €175 million to Schiphol Airport, which is the first instalment of a total financing of €350 million for expansion. Schiphol plans to build a new terminal and a new pier, to cope with 15 million more passengers per year. In addition, the airport will relocate and renew other parts of the related infrastructure, such as internal roads and car parks. The EIB says as Schiphol is the “showpiece” of the Netherlands, this is essential. Earlier the EIB lent money to Schiphol to build the 5th runway. The new pier is planned to be completed by the end of 2019. The terminal is planned to open for operations in 2023.
EIB supports extension of Schiphol Airport
2 March 2017
By Tom Smit (European Investment Bank press release)
The European Investment Bank and N.V. Schiphol Airport have signed a loan agreement of €175 million, the first instalment of a total financing of €350 million. Schiphol will use the funding to finance part of the planned expansion of Amsterdam’s airport.
Between 2017 and 2024 the airport will build a new terminal and a new pier, which will allow for a growth in capacity of up to 15 million passengers per year. In addition, the airport will relocate and renew other parts of the related infrastructure, such as internal roads and car parks.
“Schiphol is a showpiece for the Netherlands and in a time of continuous modernisation further development of the airport is essential.” said EIB vice-president Pim van Ballekom.
“The EIB has supported Schiphol in the past, for example in the construction of the fifth runway and the new baggage handling system, and we hope to continue to do so in the future.”
“Schiphol is very pleased that the EIB is willing to stimulate the expansion of Schiphol with this financing facility. It is a confirmation of the very good relationship that we have built up over the years.” added Schiphol’s CFO Els de Groot. “Thanks to the planned expansion we will continue to offer the best possible service to our passengers, safeguarding our position as our country’s mainport and connecting the Netherlands to the rest of the world.”
The new pier is planned to be completed by the end of 2019. The terminal is planned to open for operations in 2023.
EIB financing of airport projects
- Date: 28 July 2008 (European Investment Bank website)
The European Investment Bank is a key player in financing the European transport sector, including Airports and Air Traffic Management projects. Effective transportation systems are essential to Europe’s prosperity, having significant impact on economic growth, social development and the environment. Transport is an important industry in its own right and makes a major contribution to the functioning of the European economy as a whole. Mobility of goods and persons is an essential component of the competitiveness of European industry and services. Accordingly, the long-term perspective and the truly European dimension of major transport projects have made the Bank a natural financier of investments in the sector.
A number of EU policies provide the basis for the Bank’s transport lending: the development of the trans-European transport networks (TENs), cohesion policy, sustainable transport development as well as support to Research Development and Innovation (RDI). In all cases the Bank’s lending policy for this sector is multi-dimensional and integrates environmental concerns in all stages of the Bank’s due diligence.
EIB transport lending policy
EIB Airport and Air Traffic Management projects must be in conformity with the Bank’s new transport lending policy. The policy was renewed on 27 September 2007 and sets the guiding principles and selection criteria that reinforce the Bank’s contribution to this sector, in particular taking into account climate change concerns.
The EIB supports airport projects when they demonstrate high economic value and contribute to improved safety and reduced congestion as well as time savings for travellers. Appraisal of these projects therefore takes into account potential future adjustments to demand including those occurring when the emission burden is carried over to consumer prices (e.g. through inclusion of airlines in the EU Emission Trading System). Furthermore, the economic life of airport investments is measured in decades, encouraging a long-term view of technological developments.
Air Traffic Control (ATC) investments may also provide opportunities to improve traffic management with positive side-effects on greenhouse gas (GHG) emissions, an area which the Bank follows closely due to the important developments based on the EU SES (Single European Sky) legislation and the recently agreed European ATM (Air Traffic Management) master plan.
Indeed, the recent report of the High Level Group for the Future European Aviation Regulatory Framework has noted the need to improve performance and the environmental benefits this could bring. According to the Commission proposal for an amended SES II regulation issued in June 2008 improvements in air traffic management and airport operations could reduce emissions by some 7 to 12% for the average flight, or 16 m tonnes of CO2 per year.
In line with these criteria, the EIB supports projects that, among other things:
- are TENs
- are located in Convergence regions and contribute to regional development
- are supporting a local economy, highly dependent on air transport services
- demonstrate high economic value
- contribute to improved safety
- contribute to reduced congestion or result in time savings for travellers
- contribute to airport operating efficiency and innovation
Moreover, as all other EIB projects, those developed in the aviation sector also have to comply with the EIB’s financial, environmental, social and further relevant criteria in order to be considered eligible for financing.
The consequence of the EIB transport lending policy is that projects which may be only marginally worthwhile are discarded. Such situations might arise through poor demand projections, because there are alternative airports nearby, or because costs are excessively high. Likewise, projects that do not have a sound Environmental Impact Assessment at planning stage will also be rejected. Outside the EU, where planning and approval procedures may be less demanding, the Bank will apply to projects the same evaluation standards as projects within the Union.
The Bank has financed more than 220 airport related projects since the 70s. Since the adoption of the transport lending policy in September 2007, and on the basis of the above mentioned criteria, three projects have been approved to date by the Bank in this sector, aiming at:
- developing new pier and associated works at Dublin Airport
- expanding and upgrading Berlin Schönefeld airport, which is to become Berlin Brandenburg International Airport (BBI), in combination with a shutdown of two existing airports
- building a second runway in Malaga Airport.
The EIB also approved new lending totalling nearly EUR 4 billion for large scale investment projects including the first phase of the new Terminal 3 at Frankfurt Airport, expansion of the Espoo metro in Finland, new trains on the Liverpool rail network, water investment in Wales and the Netherlands, and higher-education, social housing, healthcare and housing facilities which could help address the refugee emergency in Germany. The EIB Board approved support for urban investment in Bologna, Gdansk and Szczecin in Poland and the German state of Hessen, alongside financing the largest near-zero energy building in Helsinki and urban development in the suburb of Pasila.
Transport is key to growth and competitiveness, as it provides the physical networks that enable the movement of people and goods. Better mobility achieves social cohesion, economic growth and employment. It provides access to jobs and social infrastructure such as hospitals and education that contribute to the betterment of people’s lives.
Transport is by far the largest sector in which the European Investment Bank (EIB) has been active since its foundation.
We also support research, development and innovation projects aimed at making transport efficient, economic and sustainable.
We support airport development projects to improve existing facilities and/or build new facilities to increase capacity and operational efficiency, improve aviation safety and service standards; upgrading and extension of air traffic management systems to improve capacity and align with Single European Sky requirements; aircraft manufacturing research, development and innovation projects; and the acquisition of aircraft, when there is strong financial and economic value added, when the aircraft are being used to safeguard the territorial integrity of the EU and where there is improved environmental performance over and above the aircraft being replaced.
In line with EU policy, we prioritise investment in public transport and railways, inland waterways and short sea shipping projects because they do most to reduce greenhouse gas emission per transport unit. We are also actively seeking ways of supporting the deployment of alternative fuels.
Lending strategy within the EU
Within the EU the EIB has six priority objectives:
- Cohesion and convergence (regional policy)
- Support for small and medium-sized enterprises
- Environmental sustainability
- Knowledge economy
- Development of Trans-European Networks of transport and energy
- Sustainable, competitive, and secure energy supply