mast image

Special Report

ESG: The metrics jigsaw

Sections

EC confident in EFSI 2.0 after evaluations support expansion

Related Categories

The European Commission feels justified in its plan to reinforce and expand the European Fund for Strategic Investments (EFSI), saying it is “in line” with findings from evaluations of the fund so far.

The Commission wants to extend the duration of the EFSI from 2017 to 2020 and increase the total investment target from €315bn to at least €500bn.

Its proposal for “EFSI 2.0” also has a greater focus on private-sector contributions, sustainability objectives and addressing the need for high-risk financing.

The EFSI is at the core of the Investment Plan for Europe, a flagship policy of the Commission, which believes the plan has had a positive impact, recently stating that it “has already proven useful in encouraging a sustainable increase in investment across member states”.

The Commission announced its proposal for a beefed-up EFSI in mid-September.  

Since then, the European Investment Bank (EIB), a partner to the Investment Plan, presented its evaluation, and accounting and consultancy firm EY published what was mandated as an external, independent evaluation.

Commenting on the evaluations this week, the Commission said that they found that the EFSI “has already increased access to financing as well as mobilised private capital, and identified areas in which the Investment Plan could be enhanced”.

It believes its EFSI 2.0 proposal addresses the issues raised in the evaluations.

Commission president Jean-Claude Juncker said: “The feedback we have received is in line with our proposal to fine-tune, expand and strengthen the [Investment] Plan.”

The Commission said EY’s assessment found that the EFSI “is effective in increasing access to financing and mobilising private capital, noting an expected portfolio multiplier of 14.1 for signed operations (fully in line with the target of 15 over the whole EFSI-investment period) and 63% of private investment mobilised (no precise target was set) as of 30 June 2016”.

The Commission said EFSI was “delivering well beyond expectations” with regard to financing of small and medium-sized enterprises (SMEs) – another “window” is for infrastructure and innovation.

But it noted that its EFSI 2.0 proposal “makes it even clearer that projects under the EFSI need to address sub-optimal investment situations and market gaps, as part of the eligibility criteria”.

Its proposal for bolstering the EFSI places emphasis on reinforcing the “additionality” of supported projects, which is the idea that a project would not have happened at the same time, or to the same extent, without the EFSI.

The idea is that the EFSI provides for financing for higher-risk activities than that for which there is appetite in the commercial market.

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2575

    Asset class: Core Real Estate Muli-Manager Separate Managed Account.
    Asset region: Global.
    Size: CHF 150m.
    Closing date: 2019-12-20.

  • QN-2576

    Asset class: Small Caps Equity.
    Asset region: US.
    Size: $>100m.
    Closing date: 2019-12-09.

  • QN-2578

    Asset class: Sovereign Local Currency Emerging Market Debt.
    Asset region: Local emerging markets.
    Size: EUR 950m.
    Closing date: 2019-12-19.

Begin Your Search Here
<