Circular Economy

The EIB in the circular economy

© EI

B12

/201

5pr

int:

QH-0

4-15

-902

-EN-

CISB

N97

8-92

-861

-253

7-9

doi:1

0.286

7/87

830

© EI

B Gra

phicT

eam

digita

l: Q

H-04

-15-

902-

EN-N

ISBN

978-

92-8

61-2

541-

6do

i: 10.2

867/

006

Promoting a circular economy is high on the EU policy agenda considering its potential to boost competitiveness, foster sustainable economic growth and generate new jobs. The EIB is a major partner for circular economy investments in the EU, and has during the last 10 years co-financed projects worth EUR 15bn. We are now ready to further support the EU transition towards a circular economy.

2 The EIB in the circular economy

The EIB promotes the circular economy

Circular economy projects reduce resource use and are eligi-ble for EIB financing on account of their environmental and climate benefits. Projects that include innovative features in products, production processes or business models are con-sidered eligible owing to their contribution to innovation, which is another EIB priority.

Overall, EIB has co-financed circular economy projects worth around EUR 15bn in the last 10 years, but the circular econo-

my lending needs and potential are clearly much larger. Full implementation of the current solid waste directives alone, whose recycling and waste recovery objectives are in line with a circular economy, would require investment of more than EUR 40bn by 2020.

Waste management projects closing loops

With increasing waste generation in many EU countries, and recycling levels that vary between just a few percent in some countries to over 70% in others, there is a clear need for investments in separate collection infrastructure for ma-terials and bio-waste, and related treatment facilities for such streams. The resulting increased resource efficiency will play an important role in the further development of a circular economy in the EU.

While in the past the EIB has mainly focused on municipal waste management projects, there is now both a need and potential to expand the lending to projects targeting com-mercial and industrial waste streams, in particular for the recycling and recovery of such waste. The associated market risk is different than for municipal waste, but can be man-aged under the European Fund for Strategic Investments (EFSI) and other risk mitigating instruments.

Circular economy for a more resource-resilient and competitive EU

A growing global population and rising standards of living have increased resource consumption beyond the means of the Earth’s finite resources. This prompts a shift from the cur-rent linear take-make-use-dispose society towards a more circular economy. We need to maximise the utility and value of resources and minimise waste generation.

The development of a more circular economy in the EU would reduce the dependency on imported raw materials and could create up to an estimated two million new jobs by 2030, while resource efficiency improvements would reduce material input needs. Moving to a more circular economy would also support economic growth and competitiveness. It is an opportunity for economic and industrial renewal, with associated investment needs.

A circular economy can be achieved by re-thinking and re-designing products, business processes and service models to ensure that the utility and value of materials are maxim-ised, their wastage throughout the value chain is minimised, and any waste generated is considered an asset rather than a liability. This will require development of new product-to-service business models, such as pay-per-use and product leasing, with a related focus on innovative product design and the development of new access-over-ownership busi-ness models. Further efforts must also be made to increase resource efficiency through activities aimed at reducing re-source consumption, to ensure sustainable natural resource and material management and use based

Investment cost of EIB co-financed circular economy projects (2005-2014) (in EUR bn)

Water management 69 %

Natural resources and agri-industries 13 %

Waste management 13 %

Industry and services 4 %

Product-to-service 1 %

0.60

2.0010.20

1.90

Total: EUR 14.9bn

0.20

3The EIB in the circular economy

Water management for efficiency and security

Water is a valuable but limited and fragile resource. EIB wa-ter sector projects contribute to a circular economy by sup-porting integrated management and efficient allocation of scarce water resources, improved demand management and efficient water use all the way to wastewater treatment, re-use and recycling. This includes, among other things, reduc-tion of water losses in production and distribution systems, recovery of energy from wastewater streams, treated waste-water reuse for industrial, agricultural and urban water sup-

A2A Ambiente invests in increased recyclingIn a recent project for A2A Ambiente in Milan, the EIB financed a new glass recycling facility. Since 2014 the plant has produced oven-ready cullets from source separated glass.

The project also provided new waste collection trucks that enabled the expansion of the separate bio-waste collection system so that it now covers the whole city of Milan.

These project components help to close material loops and create a more circular economy in Milan.

ply purposes and recycling of nutrients from sewage sludge into high-quality fertiliser.

Having made water security a priority, the EIB is also support-ing the identification, preparation and financing of projects aimed at increasing “water stewardship” in industry, includ-ing but not limited to efficiency measures to avoid signifi-cant waste of energy and chemicals involved in the treat-ment and distribution processes. Promising technological innovations in the water sector, such as resource recovery from wastewater in households or treatment plants, are also eligible for EIB financing.


Agriculture and forestry value chains including the agri-food and pulp and paper industries are highly dependent on nat-ural resources, including land, water, fertile soil, petrochemi-cals (for fertilizers), other mineral inputs (e.g. phosphates) and energy. Investments made in these sectors by farmers, industry, retailers and consumers through resource-efficient production techniques, sustainable food choices and re-duced food waste can contribute to improved resource ef-ficiency and food security at a global level. This would help producers and processors meet increasing demand for food and other resources.

© LBS

The EIB has already financed projects involving the modern-isation and upgrading of manufacturing facilities and RDI activities to improve resource efficiency in the food, pulp and paper sectors. It has also contributed to financing pro-jects in the paper recycling sector, an example of a circular economy business with environmental benefits in terms of preserving climate-relevant forest activities. Moreover, the EIB has financed bio-based industries (e.g. bio-refineries) including bio-plastics and green chemistry, which will allow the substitution of fossil fuel-based products with biological materials.

Sustainable management of natural resources


Industry cannot continue to grow in the face of volatile rising demand for finite resources. One noticeable trend is the growing focus on reducing, reusing and recycling materials. This has prompted more and more companies to start innovating and collaborating on new ways to close material loops. The EIB is ac-tively supporting these innovative projects by financing product innovations and technology to recover and reuse materials.

But since a circular economy involves more than just using resources more efficiently, another trend is the shift to new business models, where companies change consumers into users by offering the mainte-nance, repair and replacement of products as part of their value proposition. In this field, the EIB has sup-ported digital solution projects to enable product-to-service and sharing platforms to be created.

Rethinking manufacturing – focus on innovation and collaboration

Containerboard plant in Poland

The project consists in a 440 000 tonnes per annum containerboard plant based wholly on the use of local recycled fibre, much of which would otherwise go to landfill. The product will be used for the packa-ging of manufacturing companies in Central and Eastern Europe.

The project has also led to an increased waste paper collection rate. This will contribute to EU environmental objectives in terms of reuse of materials and reduction of waste. The paper recycling sector is an example of an existing circular economy business in which waste is turned into a resource and transformed into a valuable product.

Producing energy from sewage sludge in Vienna

In 2015 EIB signed a EUR 150m loan to finance the Energy Optimisation Sludge Treatment “EOS” project. The objective of this project is to ensure the energy self-sufficiency of Vienna’s wastewater treatment plant by using sewage sludge as an energy resource for in-house energy needs.

With this project, 20 million m³ of methane-rich biogas is expected to be extracted annually from sewa-ge sludge and converted into electricity and heat. This will allow Vienna’s wastewater treatment plant to cover 100% of its own electricity needs by 2020 and to reduce its energy costs at the same time.


Lending – Blending – Advising

Investment needs vary widely depending on a project’s scale and its position in the value chain. We tailor our financing to the specific needs of the borrower and the project. We offer a range of risk-bearing instruments, project loans and finan-cial support for funds, as well as technical advisory services.

Our traditional financing products are medium and long-term loans with fixed or variable interest rates. We finance large projects with direct loans, and smaller ones indirectly

EIB circular economy lending products, instruments and services

Supporting electric car services in Paris

The ‘Paris Bluecars’ project meets one of the key concepts of a cir-cular economy – product-as-service – with its clever car-sharing service. The developers advocate ‘using’ rather than ‘owning’ by offering a car-sharing system to get around the city using 100% electric vehicles.

This innovative urban scheme is also a real test case for electric vehicles, which are expected to clock up 60 million zero-emission kilometres a year and result in the reduction of emissions by the equivalent of 22 500 cars in the French capital.

through credit lines to local banks and other intermediaries, particularly targeting SMEs and Mid-Caps. The EIB also offers the opportunity to combine its financing with EU grants, de-pending on the scope and definition of the project.

Projects that are too small to be handled as stand-alone in-vestment loans can be supported through intermediated loans. The EIB offers support in assessing whether a circular economy project is eligible for EIB financing, and what lend-ing approach and instrument is most appropriate.


Circular economy projects with medium to high risk profiles may be accommodated under the European Fund for Stra-tegic Investments (EFSI), InnovFin and other special financial instruments with higher risk-taking potential. EFSI is an initia-tive launched jointly by the EIB Group – European Investment Bank and European Investment Fund – and the European Commission to help bridge the current investment gap in the EU by mobilising private financing for strategic investments.

EFSI is a EUR 16bn guarantee from the EU budget, comple-mented by an allocation of EUR 5bn of the EIB’s own capital. Its dedicated governance ensures that it remains focused on its specific objectives, namely to increase the volume of higher risk projects supported by EIB Group financing opera-tions and address the market failure in risk-taking which hin-ders investment in Europe.

With EFSI support, the EIB Group will provide funding for economically viable projects where it adds value, including projects with a higher risk profile than in ordinary EIB activi-ties. It will focus on sectors of key importance where it has proven expertise and the capacity to deliver a positive im-pact on the European economy.

EIB support – more than financing

EIB financing is supported by specialised in-house staff bring-ing the know-how required to support the development and structuring of circular economy projects. In providing such advisory services, the EIB relies on its expertise in financial structuring, resource efficiency and the water and wastewa-ter, energy and solid waste management, natural resource, agri-industry, industry and services sectors and SME support. EIB advisory support can be accessed and requested through the newly established European Investment Advisory Hub.

The European Investment Advisory Hub, an integral part of the Investment Plan for Europe, is a single point of entry for advisory services for investment projects in the EU. Services available via the Hub include project development support throughout all stages of the project cycle, as well as up-stream or policy advice on market studies, sector strategies, and project screening. Financial advice is also provided to assist managing authorities in establishing financial instru-ments and enhance companies’ ability to access adequate sources of financing. More horizontal assistance can be ob-tained via process and methodological guidance and train-ing on a number of issues related to investment projects, access to finance and use of EU funds. Public and private en-tities can contact the Hub via the online contact form (www.eib.org/eiah) and access a wide range of advisory services, among which, InnovFin Advisory, JASPERS and ELENA.

InnovFin Advisory offers specific (financial) advice for inno-vative projects to improve access to funding from EIB Group and/or other financing sources, analyses investment condi-tions and access to finance challenges and opportunities, and recommends new financing mechanisms and advisory services where needed.

Under the advisory mandate from the European Commission and the Government of Luxembourg, the role of finance in the transition to a circular economy was analysed. This result-ed in an assessment of the fitness for circularity of EIB financ-ing and advisory tools, and a new set of proposed EIB sup-port measures. The mandate has marked the EIB’s endeavour to engage Europe’s financial and industrial sector in identify-ing and financing circular economy opportunities and asso-ciated transitions.

Information Desk3 +352 4379-220005 +352 4379-62000U [email protected]

European Investment Bank98-100, boulevard Konrad AdenauerL-2950 Luxembourg3 +352 4379-15 +352 437704www.eib.org ©

EIB

12/2

015

print

:QH

-04-

15-9

02-E

N-C

ISBN

978-

92-8

61-2

537-

9do

i:10.2

867/

8783

0©

EIB G

raph

icTea

mdig

ital:

QH-

04-1

5-90

2-EN

-NISB

N 97

8-92

-861

-254

1-6

doi: 1

0.286

7/00

6

Large Caps Advisory

Large Projects Advisory

direct products indirect products

Midcaps

MidCap Guarantee

MidCap Growth Finance

SMEs

SME Guarantee

SME Venture Capital

Thematic Finance

SMEs and small Mid-Caps< 500 Employees

IntermediatedSME/Mid-Cap Financing

Mid-Caps< 3,000 Employees

Intermediated and/ordirect Corporate lending

Large CapsTypically > 3,000 Employees

Direct Corporate Lending

SPV, Mid-Caps andLarge Caps

Project Finance and/orDirect Corporate Lending

Public and Private SectorPromoters

Financial Advisory

InnovFin Advisory products

JASPERS provides independent expert advice and capac-ity-building support to public authorities and final ben-eficiaries on high quality projects to be co-financed by Eu-ropean Structural and Investment Funds (ESIF), as well as programmes and sector strategies that deliver EU policy objectives.

ELENA (European Local ENergy Assistance) partly bears the costs involved in the technical support (e.g. for feasibility studies, energy audits, tendering) that promoters need to prepare, implement and finance large energy efficiency and renewable energy projects.

EIB at a glanceAs the EU bank, we provide finance and expertise for

sound and sustainable investment projects in Europe

and beyond. We are owned by the 28 EU Member

States and the projects we support contribute to

furthering EU policy objectives. We are the largest

multilateral lender and borrower in the world and

our 2 300 staff can build on more than 50 years of

experience in project financing. We are headquartered

in Luxembourg and have a network of some

30 local offices.

Documents

Circular Economy