Descripción de Actividades de la Cuarta Fase de

The EIB approach for GLs in the region is that the FI is responsible for checking the environmental impacts of the projects as well as compliance issues and the EIB validates the assessment carried out by the FI on the basis of a dossier or a fiche. During the EIB appraisal, the capability of the FI to carry out environmental due diligence should be validated. The approval of an allocation with significant impacts, including projects that require an EIA, is normally subject to the presentation by the FI and approval by the EIB of an environmental dossier. Environmentally-sensitive projects have been normally excluded from GL on the basis that the FI is not able to carry out an environmental assessment of the same quality as the EIB.

This approach became more formalised with the introduction of an environmental fiche in 1994. Since 2000, the Bank’s environmental experts are no longer directly involved in appraisal. In early 2003, the Bank established standard contract provisions that impose an obligation on the FI to verify compliance by the final beneficiary with the relevant environment regulations of the country where the project is located, though this should be reviewed in the light of the greater emphasis now placed in EU law by the 2004 Environmental Policy Statement. In early 2004, the Environmental Unit of the EIB established revised guideline for FI handling EIB GLs25 _{outside the EU. These guidelines}

require the FI to fill a standard environmental fiche and for the projects where an EIA is required or should be considered under the EU legislation, they should be separately appraised by the EIB. In the 2004 environmental policy statement, it is indicated that the environmental assessment for GL should demonstrate the capacity and capability of the intermediary to apply an environmental approach equivalent to that applied by the Bank in its “direct” lending operations. However, an assessment by the EIB of the environmental capacity and capability of the FI is not covered in the guidelines. Whilst the EIB’s environmental policy has become stringent in recent years, practice has not always followed the stated objectives. In the past, the analysis of the FI’s environmental capacities and procedures has generally been rather superficial or lacking in the GL evaluated, especially in the more recent operations26.

Hence EIB is exercising a lot of trust when delegating authority to the FI in this area. The selective vetting of individual allocations, particularly the early submissions, in order to check whether the FI is applying an acceptable environmental due-diligence is usually too limited and in any case rarely involves those areas of the Bank with the necessary expertise to do this.

25 _{This guideline concerns GLs where the Bank requires FIs, for any allocation proposal, to submit a dossier}

summarising the information necessary for the economic, financial, technical and environmental appraisal of the venture concerned.

26 _{In most of the MED countries environmental laws have been put in place fairly recently and environmental regulatory}

institutions are generally weak. This implies that the FI should have an acceptable environmental due diligence in place, as it often cannot rely on the institutions of the country. In addition, the EU policy is normally tighter than the environmental policy in the MED countries thus implying that the Bank should check whether the assessment carried out by the FI is in line with EU policy, when relevant.

5.5 Procurement

For sub-projects financed under a GL the Bank requires that the procurement of works, goods and services follows the same approach as for individual loans. This means that for the projects in the public sector, the EU procurement procedures (or similar) are applied, including publication on the OJEU, if contract amount is above the relevant threshold. The difference in a GL operation in comparison with an individual loan is that the FI is responsible for ensuring that the EIB procurement guidelines are applied, instead of the EIB. Procurement is an important issue, especially when the GL is used to finance public infrastructures, including energy projects. In such cases the FI should ensure that Bank’s procurement procedures are applied.

In the three public infrastructure GLs evaluated, bidding procedures were analysed at appraisal. In the earlier operations, when the Bank’s experts on procurement were involved, the analysis was quite detailed, but became rather superficial in the more recent evaluations (no analysis of the national legislation and differences with EU procurement legislation). Specific recommendations raised at appraisal were often not reflected in the contracts or side letters. Procurement procedures were not validated by the EIB during the allocation phase, as information on procurement is rarely included in the project fiches. 5.6 Co-operation and co-ordination with other EU institutions and MDBs

Whilst institutional links with the European Commission have been a significant factor in determining the evolution of the Bank’s mandates in the region, co-ordination at the operational level appears to be more tenuous. EC programmes in the MED region since 1995 have included substantial TA support for privatisation, the SME sector and regulatory and legal reform. Although some synergies between these programmes and the Bank’s Global Loans27 have been established there would appear to be scope for greater co-ordination in this area. The strong linkages established with the ELCIM programme in the Lebanon were an exception rather than the rule.

On the other hand, until FEMIP, the Bank had limited resources itself for technical assistance either for project preparation or institutional development (unlike its peer group MDBs). Finance for technical assistance might have been requested from the EC on a case-by-case basis, but the slowness of the Commission’s approval procedures and the rigidities of its budgetary system have acted as strong disincentives for the Bank to seek funding for TA through this window.

The level of co-operation and co-ordination with other EU institutions was thus found to be generally low, albeit not always considered necessary for some operations.

A number of cases were found where co-ordination with other donors who were targeting the same sector and/or FI was lacking. Whilst faced with the very problematic situation of a particular FI, EIB let other donors take the lead in discussions with the Government and then fell in line with their decision to cancel ongoing loans to the troubled institution.

27 _{Examples are the “mise à niveau “ programmes in Morocco and Tunisia, and the Industrial Modernisation}

The evaluators also observed that the EIB needed to more carefully assess its value added vis-à-vis other donors in using a specific instrument for a particular development objective, and to evaluate the benefits and risks attached to using this specific instrument. While contributing to increasing the available long-term resources is by itself a worthy objective, and earmarking them for a priority area is also valuable, it is also important to carefully assess ex-ante the ingredients that are necessary to meet effectively a specific agreed objective. Nevertheless it must also be recognised that lack of effective mechanisms for co-ordination is a problem common to many other MDBs.