EIB will need ‘Brexit insurance’ for UK infra

The European Investment Bank (EIB) has warned the UK of the need to insure infrastructure projects to counter Brexit uncertainty.

EIB president Werner Hoyer told the Financial Times at the IMF annual meetings in Washington that projects enjoying EIB funding would need to insure against the risks and legal challenges, guaranteeing that the bank’s outstanding loans in the UK will not be affected after Brexit. 

Hoyer said: “[Lending] is going down anyway because the demand is going down. Project promoters are less interested in what we do because they do not know what kind of legal relationship we will have after Brexit.”

Funding for projects is set to continue as long as the UK is a member of the European Union, but Hoyer suggested that a decline would be inevitable in the long term.

The EIB has recently approved an €11.5bn financing package for projects across the continent and beyond, including a number of PPP deals.

UK Chancellor Philip Hammond has previously announced plans to broaden the use of the UK Guarantees initiative, in part to ensure finance continues to be available after Brexit.