EIB planning to step up cooperation with China

European Investment Bank, Europe’s long-term lending institution, is expected to officially inaugurate its office in Beijing in June to partly cooperate with China-led Asian InfrastructureInvestment Bank, which it has discussed with China for a long time, said its top executive.

The lender will work with China to raise funds for the European Commission’s 315 billion euros ($339.2 billion) investment plan for Europe spread over three years, said Werner Hoyer, president of the EIB.

Commenting on the Asian Infrastructure Investment Bank, Hoyer said at a briefing onWednesday: “We have been in touch with the Chinese authorities for a long time.”

With 18 European countries applying to become founding members of the AIIB, Hoyer said his bank is not in a position to join as a “shareholder”, as it would mean holding a “sovereign”status.

“But I think it will not be a bad idea to learn from the experiences of EIB, when it comes tocreating the structure and procedures for the new lender,” Hoyer said. “We will have closeinteractions with the Chinese authorities and the others who want to be AIIB shareholders.”

Hoyer said the lender has already invested in a healthcare research project in Spain, anairport expansion project in Croatia, construction of 14 new healthcare centers in Ireland andon industrial innovation in Italy totaling 300 million euros. The loans will support overallinvestment of around 850 million euros for public and private sector projects but the figure isstill trivial compared with European Commission’s plan to raise 315 billion euros within threeyears.

“We are working very closely with China. It (China) is an important partner for us when itcomes to financing projects in China and in Europe,” said Hoyer.

He said China is an important buyer of the EIB bonds with purchases of about 60 to 80 billioneuros every year.

To further deepen the close cooperation, Hoyer said his bank is planning to sign a hostagreement with China soon. As part of this, Hoyer will travel to Beijing in June to formally setup the EIB office, though it has been working unofficially for two years.

Beijing has approached the European Union on joining the AIIB, but Brussels has hinted that only member states should get involved in the initiative, according to Annika Breidthardt, theEU spokeswoman for jobs, growth and investment.

She said previously that a common approach would put the EU in a stronger position to ensure that the AIIB is set up in line with international best practices for the benefit of its recipient countries.

Breidthardt said it is essential that the new institution follows international best practices in terms of transparency and safeguards in important areas such as impact on the environment and health, fair labor conditions and procurement.

From the EU perspective, she said the increased investment in Asia’s infrastructure is highly welcome and it is a business opportunity, also for EU companies.