The European Investment Bank (EIB) welcomes the final approval by the European Parliament and the Council of the Regulation establishing the new “European Fund for Strategic Investments” (EFSI).
Werner Hoyer, President of the EIB, stated: “The approval of the EFSI Regulation is a great achievement. Speed is of the essence in mobilising new investment in Europe, and the EU co-legislators have worked incredibly hard to ensure that EFSI could see the light swiftly.”
EFSI will be established within the EIB and managed by the EU Bank. It will be endowed with a EUR 16 billion guarantee from the EU budget and EUR 5 billion from EIB´s own resources. The EIB will use the EFSI funds and guarantee to provide catalytic, risk-bearing capacity and unlock additional financing of at least EUR 315 billion for investment in strategic infrastructure, innovation, and small and medium enterprises. EFSI operations will take place within EIB and there will be wide sectorial and product eligibility for EFSI operations, but no country or sectorial quotas.
In the interest of speed, the EIB has already started pre-financing, or “warehousing”, projects which fit the requirements and should be covered by EFSI once it is up and running. President Hoyer said: “We are on track to achieve the ambitious target of EUR 4.5 billion in warehousing projects by the end of 2015. These are projects that we are pre-financing on our own risk and earmarking for later EFSI support. So far 10 warehousing projects in 8 different Member States have been approved by the EIB Board of Directors and the pipeline for the rest of the year looks promising.” And he added: “We see that crowding-in capital works. For warehoused projects so far, the final investment exceeds a 1:15 multiplier relative to the likely EU guarantee deployed for the projects. The multiplier effect can only be calculated on the basis of the whole EFSI portfolio, not project by project; however, this is an encouraging start.”
The President also recalled that EFSI is part of the “Investment Plan for Europe” which is based on three pillars – removing obstacles to investment in national and European regulation, the expansion of advisory services for project preparation and implementation, and kick-starting risk-taking among market players.
President Hoyer: “It is of vital importance to channel the ample liquidity that is available to projects and businesses. But it is of equal – or even higher importance – to come to a better, more investor friendly environment in Europe. EFSI cannot work by itself. Everyone must do their part.”