The Investment Plan for Europe, also known as “Juncker Plan“, adapted in 2014, is built around three pillars:
- the European Fund for Strategic Investment (EFSI)
- the European Investment Project Portal (EIPP) and the European Investment Advisory Hub (EIAH)
- Improving Investment Environment.
The focus of the AER briefing seminar on 30 November with EC Vice president Jirki Katainen will be on EFSI, the main instrument for boosting investment, employment and economic growth in general. The total investment target is EUR 315 billion in additional to public and private investment over the next three years. EFSI has been launched together with the EIB Group – European Investment Bank and European Investment Fund – and the European Commission.
The activities on which EFSI focuses are strategic infrastructures; education, research, development and innovation; expansion of renewable energy and resource efficiency; support for smaller businesses and midcap companies.
The objective to support the recovering of the real economy after the economic and financial crisis. This is done by providing financial support to valuable projects, which can deliver investment opportunities in the local community, in a long-term perspective. Almost half of the target has already been mobilised (EUR 154 bn), covering a geographical area of 27 out of 28 EU countries. The main sectors involved are smaller companies, energy, RDI, digital and transport. A smaller percentage involves transport, environment and social infrastructures.
Challenges
As the EFSI has been integrated into the EIB Group, it is subject to its Project cycle and governance. Projects to be eligible must be economically and technically sound, in at least one of the EFSI eligible sectors, contributing to EU objectives, mature enough to be bankable and priced in a manner commensurate with the risk taken. These requirements can be difficult and demanding for regions or SMEs which may already experience difficulties in meeting their balance budget or in developing well-structured and long-term projects.
Therefore the challenges for the EFSI to become more attractive are the following:
- improve accessibility, by information and promotion
- provide instruments to overcome the financial gap: for instance adapting the requirements
- provide instruments to overcome the capacity gap: facilitating the project structure, providing help to build good projects in the right sector
- gain visibility at the very local level
- gain credibility by the impact of the other projects implementation
- overcome minimum requirements for the size of the projects: for instance for midcap companies the loan volume must be between 7.5 and 25mln. For projects under 25mln EIB provides intermediate loans to local, regional and national banks.
- overcome the slow disbursement of the loan: in fact the project is signed subject to the fulfilment of pre-disbursement conditions and after signature the project remains under consideration for six months.
Pioneering regions
Here there are some good examples of projects, well developed and approved in the framework of Juncker Plan, coming from the following regions:
–Grand Est: QUAERO EUROPEAN INFRASTRUCTURE FUND (2016) France
EUR 40mln in equity participation will enable the Quaero European Infrastructure Fund to attract other investors. This Fund provides equity financing for projects in the fields of social infrastructure, transport, telecoms, energy and public or private amenities.
-Rhône-Alpes: LYCEES – REGION RHONE-ALPES (2014) France
EUR 500mln to renovate and upgrade upper secondary schools. Part of the project’s investment is targeted towards the Region’s contribution to health and medicine-related higher education. The aim of the project is to improve education infrastructure and to increase energy efficiency of educational buildings in the region.
-North Braband: EVIDES WATER SUPPLY (2014) Netherlands
EUR 175 mln to support Evides’ capital investment programme 2014-2018 aimed at maintaining the quality and functionality of its water and distribution pipelines, basins and production installations among others. The aim is to secure a sustainable management of water supply and distribution, bringing about positive social and environmental impacts.
-Gelderland: DYKE STRENGTHENING GELDERLAND Netherlands
EUR 182 mln to raise and widen river dykes along various sections of Rhine, Waal, Ijssel and Meuse (Gelderland). The aim is to strengthen the dikes along these rivers to protect and improve citizen’s physical safety and their quality of life.
On 30 November, in the framework of the AER series of events “Investing in the future: new perspectives for the regions“, the Vice President of the European Commission in charge of investments Jyrki Katainen will give clarifications about the implementation of the EFSI. Regions can share their questions in advance by contacting AER coordinator for Institutional Relations Alexandre Brecx ([email protected]).
Photo credits of featured picture: Benjamin Turquier @Flickr http://tinyurl.com/j9aw78z
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