2 EU INVESTMENT TRIANGLE First Pillar: Mobilising Finance for InvestmentEuropean Fund for Strategic Investments (EFSI)Second Pillar: Making Finance reach the EconomyA pipeline of viable projectsThe EC-EIB-MS Taskforce: 2000 projects, for EUR1.3 trillion (of which EUR500bn in the next 3 years)European transparent project pipeline(EC-EIB-MS)Advisory servicesEuropean Investment Advisory HubTechnical assistancePooling resources & expertiseEligible sectors:Development of infrastructureResearch and development and innovationInvestment in education and training, health, information and communications technologyDevelopment and modernisation of the energy sector, including, renewable energy and energy and resource efficiency;SMEs and Mid-Caps, Access to financeThird Pillar: Removing barriers to investmentSimple, better and more predictable regulation at all levelsMaking most of the Single MarketCapital Markets UnionEnergy UnionDigital Single MarketServices MarketStructural reforms in the Member StatesJyrki Katainen, November 2014
3 First Pillar: Mobilising Finance for Investment European Fund for Strategic Investments (EFSI)
5 EFSI eligible sectors Infrastructure & Innovation SMEs and Mid-Caps Development of infrastructureTransportEnergy interconnectionsDigital infrastructureEnvironmental infrastructureNatural resourcesUrban development and mobilityResearch and development and innovationInvestment in education and training, health, information and communications technologyDevelopment and modernisation of the energy sector, including, renewable energy and energy and resource efficiency;SMEs and Mid-CapsAccess to finance
7 EFSI key aspects Leverage EU -> EIB - > total financing Crowd-in NPBs and Private sectorRisk-takingAdditionalityvs marketvs EIB current activity and EU instrumentsGovernanceIndependenceProject selection criteriaSpeed of implementation
9 SME Window of EFSISupport to SMEs and mid-caps is foreseen in the EFSI regulation. A specific SME Window of EFSI to be created, implemented via the EIF, through agreements between the EIF and financial intermediaries signed inFinancial support must be additional to what will have been delivered under the existing and already foreseen programmes in the periodThe SME Window should have a budget of up to EUR 5 billion, of which:EUR 2.5 billion provided by EIB at its own risk, to enhance the RCR mandateEUR 2.5 billion provided by the EIB but guaranteed fully by the EU under EFSI
10 Planned Products 3 groups of products are foreseen: Temporary boost to COSME and Horizon 2020 loan guarantees. These will allow the EIF to speed up the implementation of these EU financial instruments inEFSI funding for these instruments will be needed in full only in 2015 and will be gradually released thereafter, allowing for re-use of resources for other products.Pooling of resources from the EU budget, EFSI and EIB/EIF (and possibly other partners)These facilities will allow the EIF to achieve much higher volumes of SME financing than with the support of the EU budget alone, (e.g. early stage equity facility based on risk-sharing).New instruments funded predominantly from EFSI (with contribution by the EIB Group for the purposes of alignment of interest), e.g. equity co-investment facility.
11 Expected Results and Fit with Policy Objectives The SME Window in total (including the EIB's contribution to RCR) should mobilise approx. EUR 77 billion of investment. Around 190,000 SMEs and small mid-caps are expected to benefit from the support.This should give the EU economy a boost in growth and job creation.The products are complementary to existing EU financial instruments and also to the ECB monetary policy. While the ECB provides liquidity, the SME window addresses the risk of SME financing and provides capital relief.
13 EFSI work planEFSI Regulation Commission proposal (13 January 2015) Council agreed on its negotiation position (10 March 2015) European Parliament, Budget-ECON committees Target approval (Jul-15) EFSI EC-EIB Agreement Negotiation ongoing EIB/EIF Pipeline / warehousing (2015) Set-up organisation and EFSI governance
14 Second Pillar: reach real economy A pipeline of viable projectsThe EC-EIB-MS Taskforce: 2000 projects, for EUR1.3 trillion (of which EUR500bn in the next 3 years)European transparent project pipeline (EC-EIB-MS)Advisory servicesEuropean Investment Advisory HubTechnical assistancePooling resources & expertise
15 Project Pipeline with Promotion Purpose Common evidence shows that while liquidity may be abundant among certain financial investors, they need a credible forward looking pipeline in order to step up their efforts to investPIPELINE is an important building block serving as a connecting BRIDGE between EU's Investment Potential and available financial liquidity worldwideThe joint COM-EIB-MS Task Force on Investment demonstrated that the investment potential in the EU is there by identifying more than potentially viable projects over an ambitiously short period of 2 months)
16 Pipeline continuedA transparent forward looking pipeline of projects has been proven to be an effective form of presenting new project ideas to the market at large, as recognised by the G20 and OECD experience in several countriesThe Pipeline gives confidence to investors that there is volume (supply) thus helping them build the necessary internal capabilities and local expertiseThe hen-and-egg Question: what comes first, the project opportunities or the financing resources to realise them? The European Commission answer: we concentrate our efforts and (limited) resources on both simultaneously!The Pipeline will also benefit "less credit-worthy" Member States as investors could be attracted to projects where sovereign risk premium has lower weight compared to project specific risks (mitigated through the involvement of internationally recognised project sponsors)
17 European Investment Advisory Hub (EIAH) a joint initiative of the Commission and EIB, building on existing advisory servicesEIAH will enhance the capacity of public authorities and project promoters in Member States to identify, prioritise, prepare, structure and implement strategic projects with a European added-value.EIAH will :establish a single entry pointestablish a coordination mechanism for existing and new advisory programmes and TA initiativesensure a platform for cooperation and provide guidance to public and selected private counterparts seeking advisory support for project preparation, use of EU financial instruments and access to finance.
18 European Investment Advisory Hub (EIAH) i. Single point of entryfor advisory services (matching of TA demand with services available) with a support team (helpdesk) for public and private project promoters, Managing and Procuring authorities and National Promotional Banks (NPBs).it will encompass a web portal (with links to existing and new advisory programmes) that will become a reference point for guidance and support to potential investors and public authorities for investments within the Union.
19 European Investment Advisory Hub (EIAH) ii. Strengthened advisory supportto coordinate and provide synergies, i.e. bring together current advisory services under a single advisory hubto deploy new services to cover unaddressed needs (e.g. projects under EFSI), thereby creating a comprehensive offer of project preparation advisory services within the EU.
20 European Investment Advisory Hub (EIAH) iii. Platform for cooperation• will provide methodological guidance in areas such as public procurement (including PPPs and value for money assessments), financial instruments, project structuring;• develop guidelines, manuals, factsheets, case studies;• coordinate networking platforms for capacity building activities and exchange of good practice for TA and facilitate networking events, training and e-learning modules;• enhance cooperation with and between existing and newly established NPBs.
21 Third Pillar: Removing barriers to investment Simple, better and more predictable regulation at all levels Making most of the Single Market Capital Markets Union Energy Union Digital Single Market Services Market Structural reforms in the Member States
22 EUR 16 bn* EU guarantee EUR 5 bn Possible other public and private contributionsEuropean Fund for Strategic InvestmentsEUR 21 bnEUR 16 bnEUR 5 bnx 15Long-term investmentscirca EUR 240 bnSMEs and mid-cap firmscirca EUR 75 bnTotal extra over :circa EUR 315 bnJyrki Katainen, November 2014