The European Investment Bank Provides A Look At How President Obama’s National Infrastructure Bank Might Work | The New Republic
President Obama’s new plan to create an infrastructure bank didn’t get a lot of attention this week. And a lot of the attention it did get was from Republicans dismissing it as wasteful spending. That’s too bad. The Europeans already have a similar institution, called the European Investment Bank (EIB), and it’s been highly successful. Instead of ignoring or dismissing the concept, it might be worth examining how and why that bank works—and whether Obama’s version would work the same way.
Founded in 1958, the EIB is owned by the 27 member states of the EU. The bank makes large, direct loans (generally at least $10 million) to projects that improve infrastructure, clean energy, health or education. Would-be borrowers, who come from both the private and public sectors, must make a comprehensive proposal detailing the project’s feasibility, its ability to repay the loans, a list of other funding sources and its value in fulfilling EU policy objectives. A panel of experts then determines whether the project should receive EIB financing, which can pay for up to half of a project’s cost.