BRUSSELS, April 12 (Reuters) - The European Investment Bank will loosen its rules on lending for projects of dual, military-civilian use, to fund more defence-related investments, the bank said on Friday.

EU leaders in March asked the EIB, which is fully owned by EU governments, to change its lending policy, which explicitly excludes lending for purely military projects, to help Europe ramp up its defence production following Russia's invasion of Ukraine.

As a result, the bank will waive a requirement that dual-use projects derive more than 50% of their expected revenues from civilian use, and replace that with any plausible civilian use.

Such a move will still exclude financing for fighter jets, guns, tanks or ammunition, satisfying those EU governments that were worried about the bank losing its AAA rating if it started lending for purely military projects.

But it will broaden the scope of the bank's activity to include equipment and infrastructure that can serve defensive military or police and also civilian needs, like reconnaissance, surveillance, spectrum protection and control, decontamination, research and development, equipment, military mobility, border control, protection of critical infrastructure and drones.

This will help especially eastern European countries, Russia's neighbours, who are more concerned about a potential Russian invasion, and which benefit from the cheaper EIB lending rates than the funding rates they can get on the market.

"We will step up and accelerate our support for Europe's security and defence industry while safeguarding our financing capacity and highest environmental, social and governance standards," EIB President Nadia Calvino said.

"As the financial arm of the EU, we must contribute to ensuring Europe's peace and security," Calvino said.

The bank has 6 billion euros for lending to Europe’s security and defence sector, it said.

With a balance sheet total of 544.6 billion euros ($590.78 billion), the EIB is the world's biggest multilateral financial institution by assets.

The EIB said it would also strengthen cooperation with the European Defence Agency. (Reporting by Jan Strupczewski; Editing by Alison Williams)