The EFSI aims to overcome the current investment gap in the European Union (EU) by mobilising private financing for strategic investments which the market cannot finance alone. It will support strategic investments in infrastructure as well as risk finance for small businesses.
The fund will focus its financing on investments in infrastructure and innovation, as well as finance for Small- and Medium- sized Enterprises (SMEs).
The European Commission expects the Investment Plan will mobilise at least €315 billion in additional investment in Europe over the next three years.
The EU will provide €21 billion in initial funding – a €16 billion guarantee, to be authorised via an EU Regulation - and the European Investment Bank's (EIB) own resources (€5 billion). The fund will be set up within existing EIB Group structures, allowing it to start quickly and to benefit from the EIB's experience.
The EFSI will have two main focuses: Infrastructure and Innovation (managed by the EIB), and SMEs (managed by the EIB and the EIF).
What is the timeline?
- On 28 May, EU legislators reached a political agreement on the Regulation for a European Fund for Strategic Investments(EFSI). This is just four and a half months after the Commission adopted the legislative proposal on 13 January. Member States unanimously endorsed it on 10 March and the European Parliament voted in committee on 20 April.
- EU Finance Ministers approved the Regulation at the ECOFIN Council on 19 June, and the European Parliament plenary voted in favour of the Regulation on 24 June. This allows the EFSI to be operational by September as planned.
- In line with the European Council conclusions of December 2014, which invited the European Investment Bank (EIB) Group to "start activities by using its own funds as of January 2015", the EIB has already announced several projects to be pre-financed in the context of the Investment Plan for Europe, in which it is the Commission's strategic partner.
What types of projects are eligible for financing?
- Must have high societal and economic value contributing to EU policy objective
- Must attract private capital by addressing market failures.
- Must come on top of existing EIB and EU financing possibilities.
- Must be economically and technically viable.
- Must be consistent with EU state aid rules.
- Some examples of key growth-enhancing areas being targeted by the EFSI are:
- Infrastructure (transport, energy, digital, environment, urban and social sectors)
- Education and training, health, R&D, ICT, innovation
- Renewable energy and energy efficiency
- Support to SMEs and mid-cap companies.
How can I submit a request for financing?
- Anyone – not just Member States - can submit their request for financing to the EIB for Infrastructure and Innovation investments, and to the EIF for SMEs equity or guarantee instruments.
- Project promoters can contact the EIB and EIF directly – they do not need to pass via a local authority or government.
What is the due diligence and project selection process?
- The EIB / EIF will perform the due diligence analysis of the investment concerned.
- The services of the EIB will seek the approval of the EFSI Investment Committee, which will be responsible for examining potential operations in line with EFSI investment policies and the investment guidelines. They will be responsible for approving the support of the EU guarantee to the EIB in line with EFSI Regulation.
- The EIB / EIF governing bodies will decide on the approval of EIB / EIF financing, in line with EIB / EIF current practices.
How can I contribute as an investor?
- The participation of private sector entities as investors is a key feature of the EFSI.
- Investors could participate in project co-financing, on a risk-sharing basis with EIB covered by EFSI.
- Investors could also participate in Investment Platforms which may be established in the future, notably with the participation of National Promotional Banks.