Investment Plan: First EU fund fully dedicated to broadband infrastructure to unlock at least EUR 1bn over 5 years
Today, the European Investment Bank (EIB) and the European Commission, together with the German KfW, the Italian Cassa depositi e prestiti and France’s Caisse des Dépôts, announced the first pooled EUR 420m for the Connecting Europe Broadband Fund to finance broadband network infrastructure across underserved areas in Europe. The Connecting Europe Broadband Fund, which is managed by Cube Infrastructure Managers, aims to pool around EUR 500m for guaranteeing broadband investments in order to mobilise at least EUR 1bn in investment over five years.
The Fund was set up to meet the growing demand for financing of smaller-scale broadband projects across Europe, which currently do not have easy access to funding. This support will complement existing EU financial instruments for broadband development as well as other financing currently available on the market through private investors or private financial institutions. The Connecting Europe Broadband Fund is the first investment platform to support broadband infrastructure under the European Fund for Strategic Investments (EFSI), which is the central pillar of the Investment Plan for Europe. The investment platform is open to the participation of private investors.
The Connecting Europe Broadband Fund has so far raised EUR 420m at first closing through commitments from:
- EIB will invest EUR 140m (out of which EUR 100m are backed by the EFSI);
- European Commission, via the Connecting Europe Facility, will invest EUR 100m;
- KfW will invest EUR 50m;
- Cassa Depositi e Prestiti will invest EUR 50m;
- Caisse des Dépôts will invest EUR 50m;
- Cube Infrastructure Managers (Cube IM) will invest at least EUR 5m;
- and additional EUR 25m will be contributed by other European private investors.
The Fund provides various levels of risks to investors (with the Commission assuming the first loss piece) and uses a unique governance structure reconciling the interests of different investors by ensuring a balance between public and private investors.
The subsequent closings should follow over the next 18 months. During a five-year investment period, the Fund aims to invest equity and quasi-equity in economically and technically viable broadband projects (with a focus on new infrastructure projects). The investments should be in line with the European connectivity targets to provide by 2025 internet connections with download/upload speeds of 1 Gigabit of data per second to all schools, transport hubs and main providers of public services as well as digitally intensive enterprises. The Fund targets typically rural and sparsely populated regions and areas where private investment needs to be reinforced.
An investment by the Fund will not exceed EUR 30m for one project. Overall, the Fund is expected to unlock additional investments between EUR 1bn and EUR 1.7bn for broadband rollout in areas where very high-capacity networks are not yet deployed.