Mr. Andrew McDowell:

For example, we finance schools across Europe, including in Ireland. The schools are not raising the cash to repay the debt. The source of the debt repayment is ultimately general taxation or a public-private partnership, PPP, structure, whereby the unitary payment that the state makes to the private promoter to make sure the schools are available repays the EIB debt. In other cases, we are financing projects in the private sector that have to wash their own faces directly. They have to generate enough cash to repay the debt. That is the credit side. While we are generally cheaper than the market, our pricing will still reflect the level of the risk we are taking. The greater the risk, the higher the pricing. It is a traditional banking philosophy; we will invest in higher risk projects but will need a higher return.

The big difference between ourselves and other banks is that, under our statutes and rules of governance, we have to do an economic, social and environmental appraisal of the projects as well. Most commercial banks do not particularly care but we do. We have to make sure that the projects make sense and have a real impact, not just economically but socially and environmentally. That is why we have about 500 engineers back in Luxembourg, as well as bankers - Mr. Cormac Murphy comes from a banking background. We have 500 engineers whose job it is to go through the details of the projects, whether they be bridges, roads or schools, to make sure they are being built in a cost-efficient way, and that the technologies and the environmental impact are right. That is what makes us different.

It is sometimes more difficult to apply for EIB financing as promoters have to jump through these additional hoops. On the other hand, a lot of promoters see this as an opportunity to learn from the EIB about the best ways of delivering infrastructure and other forms of investment, as we will have examined similar projects all over Europe.