EIB Advisory in 2023

Out of this world

As hard to grasp as it may sound, space touches us all here on Earth. Space technologies aren’t just about travelling to Mars — these innovations also make our daily lives better. They make travel by train or plane safer, guide us to our destinations, and connect us worldwide in seconds. “Space is a key asset for Europe to face global challenges, boost our economic growth and build our future,” says Gianluigi Baldesi, head of the ventures and financing office at the European Space Agency (ESA). “The global space economy, valued at €460 billion in 2022, will continue to grow, ultimately benefiting society.”

Europe has been at the forefront of recent space projects, investing in big space satellite programmes like Copernicus (Earth observation) and Galileo (positioning, navigation and timing). Now, there is a third flagship space project backed by the European Union: IRIS², a satellite constellation project to offer secure modes of communication to governments and the private sector. And yet, without more substantial and targeted investments in the space sector, Europe still risks falling behind in the next wave of space innovation despite its high standard of academic and scientific research.

While European companies remain competitive in space innovations such as micro- and nanoelectronics, digital technology, and optical and ubiquitous communications, they struggle to find loans and other financing to expand their businesses. This is due to various factors, including a lack of growth capital, the long development timelines for these technologies, and the large investments demanded by their products.

Space companies in the European Union often lack knowledge about financing opportunities. According to European space executives, it is difficult to find private funding for projects in Europe, and to navigate the complex system of public funding available at the national and European levels. To solve these problems, EIB Advisory joined forces with the ESA and the European Commission’s Directorate-General for Defence Industry and Space (DEFIS) to give extra attention to the financing needs of space companies.

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820 days to success

With good project preparation, even first-of-a-kind projects can be completed on time and meet their budgets. This was the case for the Kekava road bypass project. After working on the project for more than two years, Mārtiņš Lazdovskis found himself at the inauguration ceremony, smiling proudly for the camera and holding a piece of freshly cut ribbon.

“13 October 2023 is a memorable day in the life of many Latvians living in Riga and its surroundings, as a new stretch of motorway improves the region’s connectivity,” says Lazdovskis, chairman of Latvian State Roads, the government body that manages the country’s road network. The new 17-kilometre bypass, which took 820 days to complete, solves a major bottleneck in the Trans-European Transport Network (TEN-T) that would occur when cars and other vehicles passed through Kekava. The new bypass around Kekava saves drivers 30 minutes each way. It also improves road safety and reduces noise and pollution.

The EIB lent €61.1 million to support a public-private partnership (PPP) created to build and operate the bypass. A PPP is a deal made between a government authority and a private company, usually to build, run and maintain public infrastructure. The bypass project benefited from private sector innovation and efficiency that reduced the construction and design costs. Under a PPP contract, the private partner takes on the risk of running and managing the project. The public authority makes payments to the private company based on the project’s performance.

The EIB also provided Latvian State Roads with advisory support from the European PPP Expertise Centre (EPEC). Run by EIB Advisory, EPEC helps the public sector prepare and complete bankable infrastructure projects using PPP arrangements.

“The Kekava bypass PPP project is the first large-scale road infrastructure project in the Baltics, so our experience was quite limited at the outset,” explains Lazdovskis. “The advisory support of the EIB was a significant factor in our success. We had a very fruitful collaboration with EIB Advisory and learned a lot about their experiences implementing PPP projects in Europe.”

EIB Advisory experts helped to prepare the project, including with procurement and financing. “This allowed us to choose the most suitable model for Latvia. The EIB’s advice was invaluable,” Lazdovskis says.

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Boosting learning, saving energy

Rome is a city filled with history. Its heritage buildings are treasures for art lovers and tourists alike — but less so for students. Many schools in Rome date to the 19^th century, and some of them are run down, badly insulated and poorly equipped to face a changing climate.

That is why Rome is now making its biggest investment in education renovation in decades, with the goal of making over 200 schools more energy efficient and sustainable.

“Complex upgrades are particularly difficult,” says Linda D’Amico, an architect in Rome’s Public Works and Infrastructure Office. Because antique buildings need to be protected and preserved, the rules for doing this work are stricter.

Rome has 1 144 nurseries, kindergartens, and primary and lower secondary schools. These schools account for as much as 95% of total municipal energy use, so a good energy efficiency programme will save money and cut emissions. “School buildings are voracious energy consumers,” says D’Amico. “Energy-saving measures can reduce pollution and have a major impact on the public budget, thanks to reduced costs for heating and lighting.”

The renovation was funded by grants from the Italian government, EU funds under an Italian national plan for cities called PON Metro, and a €150 million line of credit from the EIB in February 2023.

The city requested advisory support from the EIB to devise a plan and make the most of these resources. “Our comprehensive set of technical, financial and methodological advisory services will help the City of Rome implement and monitor this project in a timely manner,” says Alexander Linke, a senior EIB finance advisor who worked on the project.

That advisory support helped city officials overcome key challenges.

“The cooperation with EIB Advisory colleagues has helped the City of Rome face its challenges,” D’Amico says. “The technical assistance has been crucial in translating even smaller building upgrades into lasting improvements to energy consumption, to the environment, and to the welfare of children,” she adds. “It is a true win-win collaboration.”

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