The 25-year loan will be used alongside finance from the local authority to provide thousands of extra primary and secondary pupil places at 38 schools, the EIB said.
Six new primary schools and six secondary schools will be built, and 25 primary schools will be upgraded and extended. A new school for children with special needs is also planned, along with improved sports facilities, the EIB said.
"The European Investment Bank is committed to supporting long-term investment that improves lives and opportunities in London and across the UK," said EIB president Jonathan Taylor. "This significant new loan will not only allow future generations of Croydon students to benefit from better schools, but also help to ensure that the borough can provide thousands of additional schools places required in the next few years. We expect to announce further support for UK schools in the coming months."
Infrastructure expert Jonathan Hart of Pinsent Masons, the law firm behind Out-Law.com said: "The EIB has a long and distinguished track record of providing project finance in respect of UK social infrastructure – most recently in its support to the priority school building programme, which has now closed four of its five batches."
"The Croydon deal represents an interesting innovation, in that the EIB is now looking to lend directly to local education authorities. It will be interesting to see whether, in these cash strapped times, local authorities are going to seek to replicate this model, and also see whether it can be applied in respect of other infrastructure needs at community level," he said.
Councillor Simon Hall, Croydon Council’s cabinet member for finance and treasury, said: "At a time of increasingly tight finances and tougher Government grants, including in education, this loan provides crucial additional resources offering better value for money than more traditional loans."
In the last decade the EIB has provided nearly £2.5 billion for education across the UK. This has included support for university campus development in Edinburgh, York, Strathclyde, Swansea, Aston, Birmingham and Kent and backing for construction of new vocational training buildings at the City of Glasgow College, it said.
In July the EIB announced that is has approved nearly €10 billion in loans for infrastructure across Europe and around the world. Finance had been agreed on 45 projects, including road, rail, ports, inland waterways and airports, the EIB said at the time.