The European Union has agreed to increase the European Investment Bank’s (EIB) annual lending limit to 100 billion euros ($115 billion) this year. This decision will also triple the bank’s funding for the EU’s defence industry, according to sources familiar with the plans.
The agreement was made during an EIB board meeting in Luxembourg and is expected to be formally approved by EU finance ministers later on Friday. The sources spoke on condition of anonymity because the details have not yet been made public.
The new lending ceiling is 10 billion euros higher than the amount the EIB lent last year. It also exceeds the 95 billion euros target set by EIB President Nadia Calvino earlier this year by 5 billion euros.
Defence funding will rise sharply, increasing from 1 billion euros last year to 3.5 billion euros this year. This is well above the 2 billion euros the bank had initially planned to spend on defence projects in January.
While the EIB cannot invest directly in weapons or ammunition, it can fund “dual-use” projects. These include technologies like GPS systems and infrastructure such as army bases. For example, the EIB has approved funding for a military base in Lithuania near the Belarus border. This base will host German troops permanently, marking the first time since World War II that German forces are stationed abroad.
European countries are rushing to increase their defence budgets amid pressure from U.S. President Donald Trump. Trump has hinted at scaling back the long-standing U.S. security guarantee for Europe. The move also comes just days before a NATO summit in The Hague, where member countries face calls to boost their defence spending.
The increased EIB lending will support other sectors as well, including technology innovation and renewable energy, the sources said.
This decision follows a mid-year review of the EIB’s operational plan. It also comes after the bank received approval last year to raise its gearing ratio, which limits the amount of loans it can hold relative to its capital.
Related topics:
