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    Part 4 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.


    By the mission and yardstick that were defined in the EFSI regulation, it has been a success. It is also still relevant as it reaches the end of its life, even though the focus of the initiative has naturally changed with the emergence of new policy goals (for example, a 40% target for investment in climate action) and the evolution of different market failures or suboptimal investment situations.

    EFSI dashboard*

    European Investment Bank economists used a well-established economic model to assess the future impact of the investments supported by all its operations, as well as for the loans made by the Bank specifically with the EFSI guarantee. Their findings demonstrate that the EIB Group’s loans laid the foundation for long-term growth, beyond providing an immediate boost to the economy. The impact of the EFSI loans is significant. Economists estimate that by 2022, investment under EFSI will increase EU gross domestic product by 1.9% and add 1.8 million jobs compared to the baseline scenario.

    >@EIB
    ©EIB

    Expected impact

    To measure EFSI’s impact, EIB economists had to account for the complex interaction between the Bank’s operations and other activities in the economy. They teamed up with the European Commission’s Joint Research Centre in Seville and worked with an economic model called RHOMOLO that was used to calculate whether increasingly scarce public financing was being used effectively.

    One of RHOMOLO’s main strengths is that it captures:

    • the short-term impact on economic activity;
    • changes in productivity and growth in the longer term.

    For example, if the EIB finances a road with EFSI support, there is increased economic activity as the road is built. Once the road is complete, the EIB financing continues to generate positive effects because the road reduces travel times and transport costs, thus increasing productivity, growth and job creation. To truly assess the impact of EFSI financing, all these factors have to be measured.

    EFSI has been a milestone and a key reference point in the way in which we pursue and carry out projects of public interest.

    The EFSI Steering Board

    In setting up and operating EFSI, the role of the Steering Board was vital. EFSI Managing Director Wilhelm Molterer and Deputy Managing Director Iliyana Tsanova would like to thank the Steering Board, in particular for the insights and guidance of Chairpersons Kerstin Jorna and Gerassimos Thomas and European Investment Bank Vice President Ambroise Fayolle. Molterer and Tsanova add that they are also deeply grateful for the dedication of the staff of the European Investment Bank and European Investment Fund and for the work of the EFSI Secretariat.

    An EFSI-backed EIB investment in Forsee Power helped Claudette Carré get a job with the company near Poitiers, France ©DR

    Projects and people

    Power for electric cars in Austria

    Professor Helmut List wants to cut harmful vehicle emissions. “We are heading for a level where we can really say they no longer affect the air quality in cities,” he says. “That is the goal we are trying to achieve in the immediate term.” As chief executive of AVL, a family-run company based in Graz, Austria’s second city, List’s focus is increasingly on research and development for hybrid and electric powertrain systems and autonomous driving systems. (A powertrain includes all the propulsion elements in a vehicle, including engines, electric motors, transmissions, batteries, fuel cells and control systems.)

    For Aris Pofantis, a lead engineer at the European Investment Bank, AVL “is an enabler of the change that needs to happen in the automotive sector.” Pofantis worked on the European Investment Bank’s 2018 deal to loan €70 million to AVL for its R&D aimed at developing test and simulation systems for electric and autonomous vehicle technologies, backed by the EFSI guarantee.

    “We are working for and with the future,” says Dr Markus Tomaschitz, an AVL vice president. “I think we are really good at understanding how the future might look, and then doing what’s needed today in order to be successful tomorrow.” With an eye towards tomorrow, the European Investment Bank topped up the loan with another €50 million in August 2020, again backed by the EFSI guarantee.

    Projects and people

    In Spain, workers can be up front about their disability when they work for Ilunion

    Manuel Delgado spent every night for months job-hunting. Few potential employers responded, and when he did get an interview, he felt he had to keep a secret—he was disabled. Until Ilunion called him.

    “When I interviewed for other jobs, I tried to hide the fact that I had a disability,” says Manuel, who has a misaligned spine. “At Ilunion, it was the first question they asked. And they didn’t care. There aren't many skilled jobs for people with disabilities. Ilunion is opening the door and providing opportunities.”

    Ilunion is Spain’s largest employer of people with disabilities, with 42% of its workforce disabled. The diverse group of companies operates a chain of hotels, an industrial laundry service, a telephone support line and a research and development department. It’s all geared towards the company’s goal of delivering accessibility to Spain’s disabled.

    The European Investment Bank’s €35 million loan to Ilunion is backed by the EFSI guarantee and creates 200 permanent jobs and a further 725 during implementation of improved energy efficiency at the company’s facilities.

    Manuel grew up in Badajoz. “When I was 13 years old, the doctors realised I had a misaligned spine,” Manuel remembers. He got a back brace, which only prevented his condition from getting worse. It didn’t correct his spine. He earned his degree in civil engineering from the University of Extremadura and started looking for jobs. He didn’t mention his disability. “I'm not ashamed, but if they didn’t ask, I wouldn’t tell. It’s hard to find a job no matter what. The process is even tougher if you have a disability.”

    Manuel had to go through rigorous interviews and tests to get his job at Ilunion. “When they picked me, I couldn't believe it. It was exactly what I was looking for,” he says. Now he works on replacing old machinery with modern, energy-efficient alternatives to make Ilunion’s industrial equipment more sustainable and less polluting. His work will contribute to Ilunion saving up to 60 gigawatt-hours of electricity each year.

    “I am so grateful for this job. It has made me feel more optimistic,” he says. “Often it isn't just about the money. It's about fulfilment, about feeling useful and being a person like anyone else.”

    Projects and people

    Borislav Bonev thought it would be hard to find a pharmaceutical manufacturing job in Bulgaria. But he found one at a company backed by EFSI

    “If pharmaceutical manufacturing is your thing, like it is mine, it is hard to find a suitable job,” says Borislav Bonev, 26, who lives in Plovdiv. “There aren`t many factories doing this kind of work in Bulgaria or in other places around the world.”

    After studying biotechnology at Sofia University, Borislav worried about working in a field with limited opportunities for graduates. Fortunately, pharmaceutical maker Biovet, located in Peshtera, 120 kilometres southeast of the capital, was expanding, so he took a job as a trainee in 2014. Now he oversees the technological needs of a new fermentation plant at the company headquarters. “Every day, there is something new that I can learn and that raises my level of expertise on different topics,” he says.

    A €100 million EIB loan backed by the EFSI guarantee supported Biovet’s expansion. The company, a unit of global pharmaceutical firm Huvepharma, is a leader in animal medicines and is adding over 200 jobs with the EFSI-backed loan. “Without the help of organisations like the European Investment Bank, I doubt that expansion projects like ours would be possible,” Borislav says.

    These investments will ensure that Europe is at the forefront of the digital and innovation age.

    • Iliyana Tsanova

    Projects and people

    Ieva’s job at the University of Latvia was created to attract more exchange students thanks to better study and research facilities

    The University of Latvia set out on an ambitious plan several years ago to double the number of international students by building a state-of-the-art study centre and research facility—a plan now supported by a €30 million loan from the European Investment Bank and backed by the EFSI guarantee.

    A graduate of the university, Ieva Gerge, works as an international coordinator, helping international students who come from as far away as Indonesia, Chile and China integrate into life at the university by assisting in practical and academic matters. “When students have problems, some of them call their mom,” Ieva says. “Some come to the international office.”

    The new-look University of Latvia is an exciting place to work—and study. “We’re building one of the most comprehensive leading research centres in the Baltics, which will eventually house more than 15 000 students, 13 faculties and over 20 research institutes.  It’s quite exciting,” says Ieva.

    Ieva is also doing a master’s degree in financial analysis at the university. “I’ve been going to the lectures after work in the evenings, so I’m really here full-time. I love the place.”

    Inside EFSI: Confronting COVID-19

    EFSI has demonstrated the significant potential harboured by the use of public financing via loans and guarantees, which are an important complement to direct grant financing. It also provides a blueprint for how to fight a crisis. The role it played in the EIB’s response to COVID-19 is a telling example.

    When the coronavirus struck, the European Commission joined forces with EU Member States and European institutions to prepare a swift and massive relief package for businesses devastated by the pandemic. EFSI was already at work, immediately delivering hundreds of millions of euros in financing for projects aiming to fight COVID-19.

    With EFSI backing, the EIB financed a €50 million deal in May 2020 to fund the COVID-19 trials run by German-Israeli company Pluristem for its treatment using placenta cells to fight infections. In June, the Bank used the EFSI guarantee to provide Germany’s BioNTech with €100 million in financing for its COVID-19 vaccine programme.

    “EFSI shows what can be achieved with scarce financing when public and private forces are combined,” says Wilhelm Molterer. “This experience is becoming even more important, given the huge challenges ahead of us.”

    One such challenge is climate action. Despite the demands of COVID-19, EFSI is surpassing its targets on this front too. With its mandate extended and increased in 2017, EFSI exceeded its final target of supporting €500 billion in investment six months ahead of schedule, even as it adapted to the impact of COVID-19 on Europe’s economy.

    Tsanova adds, “I was excited to see how fast we managed to adapt our strategy and respond to the COVID-19 crisis. We were able to quickly provide urgently needed liquidity to support companies impacted by the pandemic as well as funding for companies working on the development of cures and vaccines. Flexibility is the key to success.”

    EFSI shows what can be achieved with scarce financing when public and private forces are combined

    • Wilhelm Molterer

    At a time when budgets are tight and public financing must make every euro go further, EFSI’s structure—and its success—has been remarkable. Its record “will prove useful in the time ahead,” says Molterer.

    Before the COVID-19 crisis, Molterer might have expected that the “time ahead” would mainly include the investment components of the European Commission’s European Green Deal and InvestEU, the investment programme planned in part as the successor to EFSI. Unexpectedly, EFSI had to show how it could cope with the devastating blow to Europe’s economy delivered by COVID-19.

    EFSI has changed the way public finance is used

    • Iliyana Tsanova

    EFSI’s immediate response to COVID-19 illustrates the careful thought that went into its original structure and governance, and how finely tuned its operations have become. Some of those best placed to observe these workings sit on EFSI’s independent Investment Committee, which ensures that the European Investment Bank deals proposed for backing by the EFSI guarantee meet the criteria defined in the programme’s regulations.

    One member of the Investment Committee, Gordon Bajnai, a former prime minister of Hungary who heads global infrastructure at investment adviser Campbell Lutyens, describes a crisis such as COVID-19 as “like a tsunami. If you survive the first wave, you have a chance to rebuild. If the systems of industrial production are broken and collapse, it can take decades to rebuild—or they might be rebuilt somewhere else, not in Europe.”

    That makes EFSI’s swift response to the coronavirus pandemic key. Bajnai, who led Hungary during the financial crisis, says that “in a crisis, money that is given fast is worth three times as much as money given later on.”

    *This report is published before the final meeting of the EFSI Investment Committee in December 2020. Therefore the final amount of investment supported is expected to exceed the one disclosed here.