The European Investment Bank and its role in financing public water

From the 1990s onwards, the European Investment Bank (EIB) emerged as the world’s largest multilateral public development bank in terms of its assets, equity and lending. This paper explores the logic of EIB lending to the water sector. Furthermore, we inquire as to the relationship between EIB lending and public water in particular. We find the logic of EIB water lending can best be explained by dividing its activities into two phases. Firstly, from its establishment in 1958 to 1990, EIB water lending is strongly influenced by the bank’s constitutive mandates, including development, integration and, particularly, promoting enlargement. Secondly, from the 1991 to 2021, water loans become increasingly less influenced by EIB mandates, as a process of “levelling up” occurs across all Member States. Regarding the relationship between lending by the EIB to public water, we have cautionary findings: it is more important to understand ongoing water reform than ownership, since what may appear to be lending to a public water entity may actually entail helping finance its transition to a private entity. We illustrate this with the highly relevant case of the UK, which dominated EIB water lending over the whole period.