EIB independent evaluation report: EFSI on track to mobilise private capital
The EIB published its first report “Evaluation of the functioning of the European Fund for Strategic Investments” today. The report was carried out by the EIB’s Operations Evaluation Division, a unit which draws up evaluation reports about the EIB's work independently from EIB management. The report was drawn up as required by the EFSI Regulation. It covers the period from September 2014 to June 2016 and focuses on the portfolio of operations, the governance and organisational structures of the initiative, as well as project procedures and guidelines.
According to this report, the European Fund for Strategic Investments (EFSI) is on track to mobilise private capital which is crucial to strengthen Europe’s competitiveness. Ambroise Fayolle, Vice President at the European Investment Bank (EIB) commented: “This independent evaluation report confirms that EFSI is on track to deliver on its objective, under the Investment Plan for Europe, to mobilise EUR 315 billion in investments by 2018. EFSI has also demonstrated that it is an effective way to crowd in investors. So far over 60% of total investment potentially mobilised by EFSI comes from the private sector and 85% of projects supported by the innovation and infrastructure window have been done with new clients. This is crucial to relaunch investment and put money to work in making Europe competitive globally.”
“Europe needs to step up investment in particular in innovation, research and development, SMEs, strategic infrastructure and climate change. This is exactly the kind of investment EFSI seeks to mobilise”, Vice President Fayolle stressed. "We believe that a number of EU Countries will benefit in the months ahead from our support for capacity-building through the European Investment Advisory Hub to originate and structure more projects that could be supported under EFSI.”
The EIB is currently, in dialogue with EFSI stakeholders, looking at other sectors which could potentially be included in a future revision of the Regulation. Whilst the EFSI does not operate according to country quotas, investment should be distributed fairly and go where it is needed most. Making cohesion an explicit objective of EFSI could help broaden the scope of eligible projects.
In terms of pure numbers, the evaluation finds that there is a concentration of EFSI projects in the EU-15. However the comparison between nominal investment volumes can be misleading as larger economies have more capacity to develop a greater number of viable projects. In relative terms, for example EIB Group financing compared to GDP, the breakdown shows that smaller EU economies receive a higher proportion of EFSI investment (see annex).
The current EIB evaluation does not contain impact figures. Meaningful economic impact can only be evaluated after a reasonable number of projects have actually been signed, financed, and have started yielding fruit. Accordingly, the first report on EFSI impact is expected by June 2018.
As the EIB Group fine-tunes analytical tools to help calculate the economic impact of its financing, it confirms its track record of making a strong positive difference to the economy. The Group is now looking at the impact of its financing in the 2013-2015 period, when a capital increase granted by the EU Member States allowed it to provide a total of EUR 372 billion in financing. The Bank estimates the short-term results by 2017 as an additional GDP of 0.8% and additional employment of 830,000 jobs across the EU. In the longer term, the model projects an impact by 2030 of an additional GDP of 1.1% and total additional employment of 1.4 million jobs.
The EIB Group assesses the impact of its investments in terms of their concrete contribution for citizens and the economy. An increase in EIB Group lending led to a stronger boost for employment and growth. In the three years between 2013 and 2015 this was thanks to a capital increase for the EIB. In the coming three years EFSI can be expected to have comparable positive effects.