EIB to open first Irish office in bid to beef up lending

The European Investment Bank (EIB) is to open an office in Ireland for first time in bid to beef up its lending here, which still trails the European Union average.

Ireland’s new EIB vice-president, Andrew McDowell, said he was hopeful of establishing a Dublin office before the end of the year.

He was speaking at conference on investing in Irish infrastructure, hosted by the European Commission Representation in Ireland and European Movement Ireland.

The EIB has provided about €3.6 billion for investment in Ireland since 2010 with its Irish loan book expanding by about €600 million to €700 million a year.

Mr McDowell, a former economic advisor to the Taoiseach, said the EIB’s lending here was still below the EU average despite a significant acceleration since the crash.

“Notwithstanding the evident infrastructure gaps and other pent-up investment requirements, total EIB exposure to Ireland remains, as a percentage of GDP, below the EU average,” he said.

Bottlenecks

In his address to the conference, Mr McDowell said the strength of the Irish recovery had highlighted significant planning and infrastructure bottlenecks in transport, housing, water and broadband.

These threaten to hold back both the continued pace of the recovery and its regional impact, he said.

“In contrast to the exceptionally favourable financing conditions for the Irish sovereign, private-sector financing conditions in Ireland remain challenging, particularly in the supply of risk capital and long-term finance,” he said, noting the enterprise sector here remained exceptionally reliant on a reduced number of commercial banks for financing.

While no overall target for Irish lending has been set, the EIB expects its annual level of lending here increase by about €200 million in the coming years, bringing more in line with other EU states.