The Investment Plan for Europe European Fund for Strategic - - PowerPoint PPT Presentation

The Investment Plan for Europe European Fund for Strategic Investment (EFSI)

June 2015

1

• EU growth benefitting from economic tailwinds
• Low oil, low Euro, QE , broadly neutral fiscal stance
• Boost for an otherwise mild cyclical upswing
• GDP expected +1.8% in 2015; +2.1% in 2016
• Labour markets are slowly improving but unemployment

remains high in certain countries

• Inflation expected to recover later this year
• Medium-term outlook still affected by structural and

crisis-related weaknesses

EU Economic context

2

• Six months into a new five year mandate
• New Commission led by President Juncker
• New focus, new structures

EU Political context

3

EU Investment Plan: rationale

EU investment & competitiveness gap High liquidity in the market Public budget constraints Financial and non-financial barriers to investment EU Investment Plan EU/MS policy action + EU budget + EIB capacity to mobilise private sector funds towards strategic investments.

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The challenge of boosting investment

3,039 2,527 2,543 2,528 2,567 2,640 2,717 3,021 2,657 2,714 2,659 2,647

230 370

Gap compared to sustainable trend 2,869 "Sustainable" trend of investment assuming a share in GDP of 21-22% 2,416 2,606

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EU Investment Plan: estimated impact

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• Boost to strategic investment and access to

finance for SMEs and mid-cap companies via the European Fund for Strategic Investment (EFSI) – EIB/EIF

• Cooperation with National Promotional Banks

and the EIB

• 1. MOBILISING FINANCE FOR INVESTMENT
• Investment Project Portal
• European Investment Advisory Hub:

technical assistance

• 2. MAKING FINANCE REACH THE REAL

ECONOMY

• Predictability and quality of regulation
• Removing non-financial, regulatory barriers

in key sectors within EU Single Market

• Structural reforms at national level
• 3. IMPROVED INVESTMENT ENVIRONMENT

EU Investment Plan: 3 pillars

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Better and more predictable regulation at all levels Capital Markets Union Making most of the Single Market Energy Union Digital Single Market Services Market Better implementation and enforcement Structural reforms in the Member States Openness to international trade and investment

• 3. Improved investment environment

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Building a dynamic pipeline of viable projects

• European Investment Project Portal
• Matching investment opportunities proposed by project

sponsors with investors' interest Strengthening advisory services

• European Investment Advisory Hub
• Technical assistance
• Pooling resources & expertise
• 2. Making finance reach the real economy

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• 2a. European Investment Project Portal
• Bridge between EU's investment opportunities and

potential investors.

• A web portal enables EU-based project promoters (public

authorities, private, PPP) to share their investment proposals seeking external financing, in a transparent way.

• Investors can search for opportunities across Europe

(size, sector, geography).

• Effective form of presenting new project ideas to the

market (G20/ OECD experience).

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• 2b. European Investment Advisory Hub
• A single access point to a wide range of advisory services.
• Strengthened advisory support throughout the project cycle:

project identification, preparation and implementation incl. the use of financial instruments, advice on structuring and implementing public- private partnerships and facilitation of access to finance.

• A cooperation platform – a peer-to-peer exchange and sharing of

know-how regarding advisory services. The Hub: a gateway to

• Targeted advisory support for project development.
• Technical capacity building.
• Expert guidance from experienced financial & technical professionals.
• Information and knowledge sharing

The Hub seeks to improve project quality and be the reference point for project advisory support in Europe.

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• 1. European Fund for Strategic Investment

(EFSI)

EU guarantee € 16bn Infrastructure & Innovation window Long-term investments  € 240 bn SMEs and mid-cap firms  € 75 bn SME window EFSI € 21 bn Total over 3 years:  € 315 bn EIB financing EIF financing € 5bn

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Infrastructure and Innovation window

SOURCES OF FUNDING

TYPICAL PRODUCTS OFFERED FINAL RECIPIENTS AND TYPICAL PROJECTS

Long-term senior debt for higher risk projects Equity and quasi-equity Subordinated loans

Other investors join in on a project basis

Transport infra Energy infra Broadband infra Energy Resource efficiency Renewable energy Research Education Innovation SMEs Long-term investment funds

The Fund serves as credit protection for new EIB activities

European Fund for Strategic Investments

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SMEs and mid-cap window

SOURCES OF FUNDING

TYPICAL PRODUCTS OFFERED

Guarantees European Fund for Strategic Investments

FINAL RECIPIENTS AND PROJECT EXAMPLES

SME e.g. micro- loans to a SME Venture Capital Growth finance Securitisation Mid-cap company e.g. equity in a start-up e.g. loans for R&D project e.g. venture capital for a prototype

The Fund serves as credit protection for new EIF activities Other investors join in on a project basis

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Key features of EFSI /1

• Focus on investments in real economy
• Measurable results on growth and jobs
• Market-driven, no political interference
• No geographic or sector pre-allocation
• Support to EU policies
• Leverage / crowd-in private sector and third parties
• Economic and technical viability
• Additionality vs existing instruments
• Higher risk-taking than EIB normal activity

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Key features of EFSI /2

• Size of investments
• EIB uses min €25m for individual loans
• Smaller schemes can be grouped into framework

loans

• No restriction for operations via fin. Intermediaries

(eg for SMEs)

• Cross-border
• Investments between a partner in MS and extending

to countries in PreAccession and Neighbourhood can be covered by EFSI

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Opportunities for promoters/investors

Projects

• Cofinancing / Risk-sharing with EIB/EIF

Investment Platforms

• Pooling of projects with thematic or geographic focus
• Agreement or Fund
• Can benefit from EU Guarantee via EIB
• Cooperation with EU National Promotional Banks

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EFSI project cycle

• Project promoters present proposal to EIB/EIF directly
• EIB/EIF due diligence
• EFSI Investment Committee approval of EU guarantee
• EIB/EIF Board approval
• Signature
• Financing
• Implementation and monitoring

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EFSI Governance

• EFSI Investment Committee (8 independent experts)
• Decisions on use of EU guarantee for each operation

based on Investment guidelines

• EFSI Steering Board (EC/EIB)
• Strategic orientation
• Policy setting
• EFSI Managing Director
• Daily management

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• Bioscience R&D (Spain) € 240m
• Primary care PPP (Ireland) €140m
• Airport expansion (Croatia) € 246m
• Industry modernisation (Italy) € 227m
• Renewable energy (Denmark) € 2bn
• Energy efficiency in buildings (France) € 800m
• Gas transmission (Spain) € 326m
• Pulp production upgrade (Finland) € 1.2bn

EIB started approvals since Apr-2015

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Status and next steps

Status

• Political agreement by EU Institutions reached end May,

to be formalised by June.

• Eight projects have already received EIB pre-financing.

Next steps

• Project can be submitted to EIB for EFSI financing
• EFSI and Advisory Hub operational Sep-Oct 2015
• Investment Project Portal operational by end 2015

Thank you for your attention – more information available at: http://ec.europa.eu/priorities/jobs-growth-

investment/plan/index_en.htm

#investEU #EFSI