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    Part three in ‘The EFSI Legacy’ series

    The European Fund for Strategic Investments has been a game-changer for economic stimulus programmes backed by EU public financing and for the European Investment Bank. ‘The Legacy’ is a series that tells the story of the European Fund for Strategic Investments (EFSI) from 2015 to 2020 through interviews with the Managing Director, Deputy Managing Director, members of the Investment Committee and final beneficiaries across Europe

    Download ‘The EFSI Legacy’ book here.


    The financial arm of the Investment Plan for Europe, the European Fund for Strategic Investments, tackles three pressing issues—economic, environmental and non-financial barriers to investment, capacity constraints and subdued investment activity. The plan was designed by the European Commission and the European Investment Bank in 2014 and launched for a five-year period in the summer of 2015.

    It was born from the diagnosis that following the 2008 financial and economic crisis, investment activity in Europe was far too low and that the competitiveness gap between Europe and other parts of the world was growing rapidly. These problems were driven by a credit crunch for private sector financing (despite ample liquidity), a fragmented banking system, underdeveloped capital markets and severely limited public resources, as well as other non-financial investment barriers.

    As the financing arm of the Investment Plan for Europe, EFSI enables and challenges the European Investment Bank Group to increase support for viable projects with risk profiles that go beyond the EIB’s own risk-bearing capacity. As a public policy instrument, it also has to address market failures and suboptimal investment situations.

    From the beginning, EFSI had three clear objectives: additionality, mobilised capital and impact. The eligibility of each project for the EFSI guarantee is assessed based on these three criteria. The EIB Group remains the lender or financier, with all related activities performed by the EIB (such as due diligence, funding, risk management, legal and contractual requirements towards the client, monitoring, governance, etc.). That allows EFSI governance (as the guarantor) to focus solely on the crucial decision as to whether the EU guarantee should be made available, based on the assessment of the EFSI eligibility criteria. This keeps the process lean and efficient.

    The EIB Group has a detailed reporting obligation towards the European Commission (which provides the guarantee) and the European Parliament (which legislates the EFSI regulation).

    You are not just doubling the effort—you are making three to five times more out of what you put in.

    • Wilhelm Molterer, Managing Director

    Projects and people

    Car battery tech charges ahead

    With electric vehicle production rising rapidly, manufacturers from all over the world rely mostly on batteries imported from South Korea, China or Japan. With an important collaboration deal with Volkswagen and BMW under its belt, Northvolt is confident that Europe is changing the current state of play. The Swedish company has built one of the world’s most advanced battery factories.

    “Renewable energy storage is the key to a carbon-neutral society,” says Peter Carlsson, the former Tesla executive who heads Northvolt, “and batteries are the key to getting there.”

    Backed by the EFSI guarantee and the EU’s InnovFin programme, the European Investment Bank supported Northvolt’s construction of a concept demonstration line in Västerås, not far from Stockholm. The factory started producing its new battery at the end of 2019, but by then Northvolt was already looking much further ahead.

    The next step is a lithium-ion battery factory in Skellefteå, northeast Sweden, which will employ up to 1 400 people and serve as a stepping stone to producing batteries with a capacity of 32 gigawatt-hours by 2023. The company aims to ramp up even further to 40 gigawatt-hours in subsequent years. The Skellefteå factory will be backed by another European Investment Bank loan, this time for €400 million, again using the EFSI guarantee.

    “I’m trying to show Europe that carbon-free energy can be stored better, distributed with higher quality and lower costs and made more sustainable and truly available,” Carlsson says. “I want to inspire change and flick a switch for Europe.”

    Inside EFSI: The Deputy Managing Director

    In 2015, Iliyana Tsanova was in charge of EU co-financing and financial engineering with the European Bank for Reconstruction and Development (EBRD) in London. She had been following the development of EFSI closely and was already trying to set up a partnership with the EIB under EFSI. In July that year, a colleague forwarded her a link to a job vacancy. The post was the Deputy Managing Director of EFSI. Tsanova, who was 39 at the time but had already served as Deputy Prime Minister of Bulgaria in a technocratic caretaker government, immediately liked the idea. “I knew I was a strong candidate for the job and I could add value,” she recalls. “I have the experience, both in banking and policy. From my work with the EBRD, I really know something about finance additionality.” Late that night, she pressed “Send” on her application and began a journey that would take her to confirmation hearings at the European Parliament and conferences across Europe, telling the story of EFSI.

    By October, she was preparing for the public hearing at the European Parliament in Brussels. That’s when she first met Wilhelm Molterer. The day before the hearings, they talked about their roles in Luxembourg and travelled by car to the Belgian capital for “by far the most difficult job interview I have ever had,” she remembers, laughing. “I was sitting in front of 100 members of the two responsible committees of the Parliament and I didn’t have a clue about the questions I would be asked. It was a very open and genuine discussion, which I really enjoyed after my initial couple of minutes of stress passed.”

    The working relationship that developed between the Managing Director and Deputy Managing Director of EFSI became key to the smooth functioning of the programme. “We are a small team,” Tsanova says. “Having good chemistry among the members of the team really matters. If we didn’t have that it would have been very difficult for us to function well. I appreciate Willi’s great personality and I’ve learned a lot from his experience as a politician and as a member of the management team of the EIB. We were initially put together in a sort of arranged marriage. And it actually worked out pretty nicely.”

    The EFSI guarantee backed Science4You’s development of science toys in Portugal ©Science4you

    EFSI is not a separate legal entity. It is a guarantee facility with an independent governance structure. For the banking operations, EFSI relies fully on the EIB Group as the financer of all investments. In addition, as the guarantor, EFSI has a lean and efficient governance structure that provides legitimacy and transparency, without delaying the ultimate financing decision.

    1. Steering Board, with three Commission representatives and one from the EIB, and since 2018 with a non-voting expert nominated by the European Parliament. It provides a strategic overview and guidance on implementation guidelines and monitors the EFSI portfolio. It is involved in individual proposals only for exceptional cases.
    2. Managing Director and Deputy Managing Director. These two politically vetted posts are implanted within the EIB following nomination by the Steering Board and a public vote by the European Parliament. They are responsible for the day-to-day management of the activities of the guarantor and report to the Steering Board on a quarterly basis. They are voting members of the Investment Committee and answerable to EFSI, not the European Investment Bank. They are strictly not involved in EIB project preparation.
    3. The Investment Committee, an independent body of eight external experts, plus the Managing Director, or the Deputy Managing Director in his absence. It is the gatekeeper to the public guarantee for projects submitted by the EIB. The decisions of the Investment Committee are final and taken by a majority vote. In their decisions, Investment Committee members are strictly independent from guidance by the Commission, the EIB, the European Parliament or any other party. Investment Committee approvals for the use of the EFSI guarantee are public. Since 2018, the rationale for the decisions has had to be explained in specific documents available for public consultation on the EFSI pages of eib.org

    The Investment Committee brought legitimacy and transparency to the process of approving the projects

    • Iliyana Tsanova, Deputy Managing Director

    Projects and people

    In Croatia, jobs were scarce, so Elizabeta Žalac thought she would have to leave home to find work. But an EIB investment backed by EFSI helped keep this talented young engineer in her native country

    When Elizabeta Žalac was born in Đurđevac, a town of 6 000 people in northern Croatia, her parents still drove a Soviet-built Lada. Now she works on one of the world's fastest cars.

    Elizabeta studied medical device design at the University of Zagreb but she saw little opportunity to advance her career at home. “I thought I was not going to be able to find a job in Croatia, because there weren’t many jobs in the area I specialised in,” she says. “So I was thinking about leaving the country, but I really wanted to stay in Croatia, close to my family and friends.”

    Then she saw an ad for a job as a battery engineer at Rimac, Croatia's sole home-grown carmaker. Rimac manufactures cutting-edge battery technology, which can be used not only in sports cars, but also trains, buses - even wheelchairs. The European Investment Bank first backed Rimac with a loan through HBOR, the Croatian national development bank. Then, in December 2018, the EIB signed a €30 million loan backed by the EFSI guarantee to fund Rimac’s research and development.

    “What was really important for me was the green aspect of the company,” says Elizabeta.

    Her first job at the company was working on batteries for an electric racing car for Spain’s SEAT. There was only one other woman working in her department, and while she had doubts about working in a male-dominated industry, her colleagues turned out to be very supportive. “I asked questions, I studied after I came home from work, and soon got the hang of it, with the help of my colleagues,” she says.

    Now she is working on Rimac’s Concept 2 sports car, which reaches a top speed of 412 km/h. “I’m really proud that I’m working in a company that is part of global change, a company that actually has a positive impact on the world and the environment,” she says, “and that all this is happening in a small city, in a country as small as Croatia.”