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.
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.