The President of the European Investment Bank (EIB), Werner Hoyer, is in Addis Ababa for the African Union Summit that ends on February 11th, 2019. The President’s visit came as the EIB, the lending arm of the European Union, announced a record 3.3 billion euro engagement across Africa to support private sectors, clean energy, transport and water investment. This has become the largest ever European Investment Bank engagement in Africa since 1965. 7Dnews reporter Elias Meseret talked to the President about his bank’s engagement in Africa.
7Dnews: The theme of this year’s African Union Summit relates to refugees and internally displaced people (IDPs). Some countries in Africa, like Ethiopia and Uganda, are burdened with an influx of refugees from neighbouring countries. How are you going to support them to withstand this storm?
EIB President Hoyer: We in Europe are sensitised to this issue because migration has reached Europe as well. Europeans have woken up and now see how much of a burden is placed on the people of Ethiopia when they have to receive and take care of so many migrants and IDPs. Of course, this is a humanitarian challenge that needs to be met. A durable solution can only be in the production of economic perspective for people so that they are able to earn a living and have a long term, stable income. So creating opportunities for jobs is the most important thing. We at the European Investment Bank (EIB) were asked by our political superiors at the European Council three and half years ago in view of the migration from Africa and the Middle East to Europe what we can do to stabilise and produce resilience in Africa and in the Eastern Mediterranean area. And we developed a programme which was very successful. We increased our lending plans for this region by more than 40%. So, the overall lending in this region by 2020 will reach something like 37 billion euros. This is really significant.
7Dnews: Some activists who are well aware of your activities in Africa say some of the projects you financed led to the loss of livelihoods and destruction of the environment. A case in point is the Olkaria IV Geothermal Project in Kenya. How do you reach decisions when you finance projects and what do you do to rectify things when problems are spotted?
Hoyer: The EU bank is extremely sensitive in these areas. And we have to take these allegations very seriously. This is why our standards on social issues, environment and displacement are strict. These are the first things that we look at when we develop a project. That is the case whether a project takes place within the European Union or in neighbouring countries. You might not be able to avoid problems completely but then we look at them carefully because the idea is not to destroy livelihoods but to improve them.
7Dnews: Can we generally say that the EIB follows environmental and social standards when it chooses to finance projects?
Hoyer: I think among the international financial institutions you will not find higher environmental, social and also procurement standards. There is no question that human rights issues for an institution like the European Union are at the top of the list. When we make mistakes, then we go into what has happened.
7Dnews: How do you make sure that people are not displaced not only from their homes but also detached from their heritage and cultures?
Hoyer: If a movement [of people] is necessary, it doesn’t have to throw people into a completely new environment. Enabling people to live in a culture that they are used to is number one.
7Dnews: Is there any funding that the EIB is announcing during the African Union Summit?
Hoyer: In my view, we are far behind schedule in meeting the Sustainable Development Goals (SDGs). If that is the case, then a look at all the funding options indicates that the taxpayer’s money will never be enough to finance the projects that we need in order to meet SDGs.
7Dnews: Do you see a reduction in the amount of commitment to the EIB from European countries, especially after the 2008 financial crisis? As the lending arm of the EU, how do you see this?
Hoyer: Soon, when unfortunately the UK leaves the EU, I’m confident that this loss will be compensated by the other 27 members. The UK has a huge share in the bank. Secondly, the EIB is in a very favourable position for the time being. This is because at least we don’t need to ask our shareholders for a cash injection because we are well-funded and well-rated by the rating agencies. So I don’t go to the shareholders asking for more cash. But what I tell shareholders is, when we do business in Africa on your behalf, we do that with a public mandate and you are serving your own interests by establishing a good partnership with African countries. At the same time, the economic development of Africa is taking a big leap forward. So, we are not talking about charity here. We are talking about a sound and friendly relationship based on a partnership.