Benjamin Angel, Director, DG ECFIN EU BUDGET FOR THE FUTURE MFF 2021-2027 InvestEU programme Benjamin Angel, Director, DG ECFIN European Commission Innovation enterprise Week

Structure of the presentation 1. Rationale 2. Key principles and objectives 3. InvestEU Fund 4. The EU guarantee 5. Governance 6. InvestEU Advisory Hub and InvestEU Portal

Address market gaps to sustain investment.. 1. Rationale Address market gaps to sustain investment.. By 2021, Member States are expected to have recovered their pre-crisis GDP level, with very few exceptions But: Persistent market gaps are still observed in different policy areas and hold back investment Not enough to compensate years of underinvestment as a percentage of GDP Not enough to finance needs in key sectors Investment in EU as a % of the GDP (current prices)

…and equity markets are not fully developed 1. Rationale …and equity markets are not fully developed 448 emerging current and exited tech companies valued > USD 500m… Total annual Venture Capital funding by continent (USD bn.)

Lessons learnt during current MFF 1. Rationale Lessons learnt during current MFF Increased number of different financial instruments brings risks of: Fragmentation Policy/financial overlaps Multiplication of agreements Multiplication of different fees

The programmes replaced 1. Rationale The programmes replaced

Structure of the presentation 1. Rationale 2. Key principles and objectives 3. InvestEU Fund 4. The EU guarantee 5. Governance 6. InvestEU Advisory Hub and InvestEU Portal

InvestEU Fund key principles 2. Key principles and objectives InvestEU Fund key principles Single Fund: a single regulation and single agreement with implementing partners Policy driven approach implemented through thematic policy windows Budgetary Guarantee Blending: harmonised combination rules Complementarity between EU level and MS level Simplification and Flexibility

The objectives 2. Key principles and objectives The specific objectives of InvestEU Fund are organised according to four windows: to support financing and investment operations in sustainable infrastructure; to support financing and investment operations in research, innovation and digitisation; to increase the access to and the availability of finance for SMEs and, in duly justified cases, for small mid-cap companies; to increase the access to and the availability of microfinance and finance to social enterprises, support financing and investment operations related to social investment and skills and develop and consolidate social investment markets

Structure of the presentation Rationale 2. Key principles and objectives 3. InvestEU Fund 4. The EU guarantee 5. Governance 6. InvestEU Advisory Hub and InvestEU Portal

InvestEU indicative proposed budget allocation 3. InvestEU fund InvestEU indicative proposed budget allocation Window Budgetary guarantee Mobilised investment (estimate) Sustainable infrastructure 11 500 185 000 Research, Innovation and Digitisation 11 250 200 000 SMEs 215 000 Social investment and skills 4 000 50 000 TOTAL (EUR Million, in current prices) 38 000 650 000 The size of the EU guarantee proposed is EUR 38bn. and the provisioning rate 40 %, i.e. EUR 15.2 bn needed for the provisioning (EUR 14.2 bn. budg. Allocation + EUR 1bn. from reflows) Budget for InvestEU Advisory Hub, InvestEU Portal and accompanying measures is proposed to be EUR 525m. InvestEU is expected to mobilise more than EUR 650 billion of additional investment across Europe

InvestEU implementing partners 3. InvestEU fund InvestEU implementing partners InvestEU Fund backs the financial products provided by the implementing partners. The procedure to choose implementing partners follows the provisions of the FR, which opens eligibility to; EIB Group (privileged partner, exp. volume ~ 75%) Other IFIs (EBRD, COE Bank..) National Promotional Banks and Institutions Other entities fulfilling the criteria laid down in the FR in Art. 62.1

Structure of the presentation Rationale 2. Key principles and objectives 3. InvestEU Fund 4. The EU guarantee 5. Governance 6. InvestEU Advisory Hub and InvestEU Portal

The two compartments 4. The EU guarantee EU compartment MS compartment Fosters EU level action and tackles EU level market gaps Consists of four policy windows Budgetary guarantee size of EUR 38bn, provisioned at 40% Guarantee is not geographically ring-fenced Fosters MS level action and tackles local level market gaps On a voluntary basis by MS can allocate amounts to provision the MS compartment from ERDF, ESF+, EMFF, EAFRD or cohesion fund Established at the level of each policy window; 1MS = 1sub-compartment Based on a specific contribution agreement defining size, provisioning, contingent liability… Contributions are geographically ring- fenced InvestEU rules apply InvestEU Fund

EU Guarantee: conditions (1/3) 4. The EU guarantee EU Guarantee: conditions (1/3) According to Art. 209 of FR, the EU guarantee has to: Address market failures or sub-optimal investment situations Provide support only to final recipients that are deemed economically viable according to internationally accepted standards Achieve additionality by preventing the replacement of potential support and investment from other sources Not distort competition in the internal market and be consistent with State aid rules Achieve a leverage and a multiplier effect, by mobilising a global investment exceeding the size of the guarantee including the maximisation of private investment

EU Guarantee: conditions (2/3) 4. The EU guarantee EU Guarantee: conditions (2/3) According to Art. 209 of FR, the EU guarantee has to: Ensure that there is a common interest of the implementing entities or counterparts involved in the implementation in achieving the policy objectives defined Foresee a remuneration that is consistent with the sharing of risk If remuneration of the implementing entities or counterparts involved in the implementation is due, it has to be performance based Finance the areas eligible for financing or investment operations under the appropriate window Finance operations consistent with the investment guidelines

EU Guarantee: conditions (3/3) 4. The EU guarantee EU Guarantee: conditions (3/3) In addition, other conditions apply to the EU guarantee: Finance the areas eligible for financing or investment operations identified in Annex II Finance operations which are consistent with the investment guidelines Target at least 50 % of the investment under the sustainable infrastructure policy window contribute to meeting the Union objectives on climate and environment. Overall, 30% target for climate and environment for InvestEU as a whole.

Structure of the presentation Rationale 2. Key principles and objectives 3. InvestEU Fund 4. The EU guarantee 5. Governance 6. InvestEU Advisory Hub and InvestEU Portal

Current situation Implementing Partners EEEF Other TA initiatives - H2020: City Facility (ENER/ EASME) & Islands Facility (ENER/ Ext consultants) - COSME: Smart Specialisation Platform (GROW/ Ext consultants) EEEF Investment Plan for Europe Connecting Europe Facility EEEF Fund Governance ENER EFSI Investment Committee ECFIN and Relevant DGs Risk Sharing Debt Instrument Steering Committee MOVE Technical Assistance Facility Steering Board ENER Implementing Partners Financial products and programmes Loans, guarantees, equity, investment platforms, technical assistance Equity Instrument Fund Governance EIB Group Inter-service Group CNECT EIAH CEF Programme Support Actions ECFIN Coordination Committee Project Promoters/ Beneficiaries Project Owners/ Beneficiaries COSME GROW Loan Guarantee Facility Horizon 2020 Steering Committee RTD External consultancy/ Fund Management InnovFin Equity Equity Facility Steering Committee Steering Committee Leadership in ICT JOINT Executive agency ELENA Risk finance for investing R&I ENER EaSI Steering Committee Steering Committee EMPL MOVE µfinance & social entrepreneurship Capacity Building Investments Steering Committee Instrument Technical Assistance EFSI top-up Lead DG(s) Delegation Agreement Direct Management FPA/SGA InnovFin Loan Services SME Guarantee Steering Committee Microfinance & Social Entreprise Guarantees EaSI Technical Assistance R&I Facility LIFE CLIMA PF4EE Steering Committee InnovFin Advisory ERASMUS+ Support Facility Steering Committee EAC Student loan Guarantee Facility Steering Committee ENV Creative Europe programme NCFF Steering Committee Current situation CCSG Guarantee Facility Support Facility Steering Committee CNECT

How will it work: direct financing by Implementing Partner 5. Governance How will it work: direct financing by Implementing Partner

Structure of the presentation Rationale 2. Key principles and objectives 3. InvestEU Fund 4. The EU guarantee 5. Governance 6. InvestEU Advisory Hub and InvestEU Portal

InvestEU Advisory Hub 6. InvestEU advisory Provides advisory support for the identification, preparation, development, structuring, procuring and implementation of investment projects, or enhance the capacity of promoters and financial intermediaries to implement financing and investment operations Replaces 12 advisory bodies + EIAH Single point of entry Support to establish investment platforms InvestEU Advisory Hub services: Available under each policy window + Local presence Assistance during the entire project life-cycle Leveraging local knowledge Supporting capacity building for promoters and authorities Promote sectorial and geographical diversification Facilitate project development Support to project origination Facilitate aggregation of small projects Market making activities

The advisory programmes replaced 6. InvestEU advisory The advisory programmes replaced Islands Facility Smart Specialisation Platform for Industrial modern. CEF (through JASPERS) InvestEU Advisory Hub EIAH City Facility Innovfin Advisory NCFF support facility EEEF technical assistance H2020 (EE11 PDA) EaSI Technical Assistance PF4EE Expert Support Facility European Local Energy Assistance CEF Programme Support Actions

InvestEU Portal 6. InvestEU portal Continues the current investment portal under InvestEU Database will continue to be on-line and publicly available Not a pre-condition for financing, not a guarantee of financing Provides visibility to investors and potential investors on pipelines Consistency check with EU laws and policies Better link to the InvestEU pipeline (implementing partners to examine projects deemed consistent falling within their geographic and activity scope)

Thank you! Questions?