From the financial crash of a decade ago to COVID-19, EFSI has responded to crises with a flexibility that still allowed it to reach its €500 billion investment target. What’s the EFSI legacy?
EFSI legacy counters COVID-19 tsunami
EFSI’s immediate response to COVID-19 illustrates how thoughtfully its original structure and governance was set up, 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 designated 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 advisor 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 the swift EFSI response to the coronavirus pandemic key. Bajnai, who lead 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.”
How to tell the story of the EFSI legacy
There will surely be more EFSI deals to fight COVID-19 in the summer and autumn. They will provide yet another chapter in the story of EFSI. Because, after all, there are already plenty of ways to tell it, such is the scope of the enterprise.
You might describe EFSI’s legacy with a map of Europe. There are EFSI deals from Las Palmas in Spain’s Canary Islands, where the EFSI guarantee backed European Investment Bank financing for new, cleaner buses, to Estonia in the north, where the EFSI guarantee helped the European Investment Bank finance Skeleton Technologies’s research into energy storage supercapacitors. The map might even take you to outer space with the EFSI-backed investment in OHB, the Bremen-based company developing electric satellites.
You can tell it as the story of a human life, starting with EFSI-backed financing for Jennewein Biotechnologie’s production of baby formula with the same natural sugars as breast milk and Science4You, which makes educational toys in Portugal. Take the tale on through school projects like this deal in Finland right on to the battle to stay the hand of death with an investment by the European Investment Fund, the EIB Group’s small business specialist, in an academic spinout fund supporting university research against cancer. Or the story of a business’s lifetime with some of the startups and young companies financed with the backing of the EFSI guarantee, like Winnow, a firm developing artificial intelligence tools to cut food waste.
Or tell it from small to big, with a family metal-moulding firm in western Germany financed by the European Investment Fund with the EFSI guarantee, up to European Investment Bank deals with giants like Ericsson, Telefonica and Deutsche Telecom for their work on 5G infrastructure.