The social development bank in Europe


Governing Board approves Report of the Governor 2018

29 March 2019

PARIS - Today, at its 222nd meeting held in Paris, the Governing Board of the Council of Europe Development Bank (CEB) approved the Report of the Governor 2018 and the CEB’s financial statements for the year.

The CEB successfully achieved its business activity objectives for the second year of the Development Plan 2017-2019. Specifically,

  • The volume of projects approved was comparable to the previous year’s record number: the € 3.9 billion in loans approved is expected to raise € 10.9 billion in total investments in 20 member states across Europe
  • The stock of projects awaiting financing reached € 7.9 billion and increased by 13.0% compared with 2017
  • Loans disbursed grew by 20.5% to reach € 2.8 billion, while outstanding loans account for € 14.6 billion (+6.0%)
  • Funds raised on international capital markets accounted for € 4.9 billion, including € 500 million as a Social Inclusion Bond.

Guided by the Development Plan 2017-2019, the Bank has been working closely with member countries, including regional and local authorities as well as national governments, to help address their social infrastructure needs. The CEB’s current strategy focuses on three activity areas: supporting sustainable and inclusive growth; the long-term integration of migrants, displaced persons and refugees; and climate action. The projects funded by the CEB place emphasis on vulnerable groups and their integration into society as well as on the reduction of inequality and poverty.  

The projects approved for financing in 2018 focus on the development of social public infrastructure, job creation and preservation, ensuring access to the labour market, and providing affordable housing solutions. A total of € 1.1 billion was approved for MSME financing in 2018. The funding will enable beneficiaries, including low-income households, to start up new or expand existing businesses by capitalising on new technologies, innovation and process optimisation, including energy efficiency improvements.

Several of the loans approved in 2018 concern first-time borrowers, including municipalities and regions facing complex, long-term social issues. The increase in new borrowers attests to the Bank’s commitment to support the development of inclusive and sustainable cities and regions in Europe.

The Bank continued to support refugees, migrants and displaced persons by providing emergency assistance, such as accommodation facilities, as well as decent and affordable housing, language training, skills development and job creation.

The CEB approved € 629 million for climate financing in 2018, compared with € 323 million in 2017. Climate financing includes the financing of energy efficiency measures in the residential, industrial, and municipal infrastructure sectors, and it can also be part of wider infrastructure investment programmes undertaken by regions and municipalities in order to improve infrastructure capacity and overall living conditions in urban and rural areas.

In the course of 2018, the CEB further expanded its cooperation with other international organisations and financial institutions, through joining initiatives such as ‘100 Resilient Cities’, the European Partnership for the Integration of Migrants and Refugees, and the Harmonised Indicators for Private Sector Operations (HIPSO). It also obtained a permanent observer status to the UN Framework Convention on Climate Change (UN FCCC).

The CEB remains focused on active partnerships through its fiduciary activities. In 2018, further contributions were pledged to the Regional Housing Programme (RHP) – the CEB’s flagship grant-based project – and the Migrant and Refugee Fund (MRF), demonstrating strong support by the donor community. In total, the CEB raised more than € 41 million from donors in 2018.

As regards its funding activity in 2018, the CEB launched eleven issuances for a total of € 4.9 billion at attractive financial conditions. 73% of the funds raised were denominated in EUR, 17% in USD and 10% in GBP. On 20 March 2018, the CEB successfully launched its second Social Inclusion Bond, which demonstrated the Bank’s important role in the social bond market.

The CEB’s financial performance in 2018 is the result of its strong capacity to face a challenging financial environment, backed by its prudent financial and risk management policies. Net profit reached € 97.5 million in 2018, compared with € 112.0 million in 2017 (-13.0%). Excluding IFRS volatility effects, core earnings showed a decline limited to 8.3%.

The CEB’s prudential ratios showed positive results throughout 2018, respecting their limits and underscoring the CEB’s financial soundness. In light of its solid overall performance, the excellent rating [1] assigned by Standard & Poor’s highlights the CEB’s increased relevance as a funding contributor in its ‘niche’ market.

Key figures Key_figures_2018

[1] On 15 February 2019, Standard & Poor’s upgraded the CEB’s rating from ‘AA+, outlook positive’ to ‘AAA, outlook stable’.

Set up in 1956, the CEB (Council of Europe Development Bank) has 41 member states. Twenty-two Central, Eastern and South Eastern European countries, forming the Bank's target countries, are listed among the member states. As a major instrument of the policy of solidarity in Europe, the Bank finances social projects by making available resources raised in conditions reflecting the quality of its rating (AAA with Standard & Poor's, outlook stable, AA+ with Fitch Ratings, outlook stable and Aa1 with Moody's, outlook stable). It thus grants loans to its member states, and to financial institutions and local authorities in its member states for the financing of projects in the social sector, in accordance with its Articles of Agreement.

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