Under the IIW, the EIB, in addition to relying on its classic long-term senior loans for corporate and project finance, expanded the use of existing higher-risk products and developed new ones, including equity, risk-sharing, Asset Backed Securities mezzanine (âABS mezzanineâ26) and corporate hybrid bonds. Cooperation between the EIB and NPBIs was enhanced by setting up working groups and collaborative investment platforms. The EFSI Regulation does not specify whether the target refers to operations approved or signed. At the end of 2017, the Investment Committee had approved 35 Investment Platforms under the IIW62, for an EFSI financing of â¬4.2 billion, representing 11 % of the overall EFSI IIW approved financing. Under the SMEW, operations co-financed with NPBIs were also concentrated mainly in Italy, France and Germany (debt portfolio), and had as an investment focus (when excluding the multi-country operations) Spain, France and Germany (equity portfolio). Annex IV provides a complete list of EFSI indicators. The main reasons they opted for EIB EFSI financing, in order of preference, were: (i) the cost of funding was lower than the alternatives (88 %); and/or (ii) the longer maturity (52 %); and/or (iii) the EIB experience and non-financial contribution (30 %). Also beneficiaries and national promotional banks were in doubt about the added value of the fund, as an independent report by the consultancy Ernst & Young showed in November. include a special-purpose vehicle (private equity fund or infrastructure fund, or other type of SPV), risk-sharing agreement or a systematic co-financing agreement with a NPBI; support several projects, including infrastructure projects; include participations from public entities (NPBIs, International Financial Institutions or Managing Authorities) or contributions from public sources of funding. At the same time, the Commission recognised the fiscal constraints facing Member States and the limited flexibility provided by the existing EU spending programmes. This illustrates that, although the project was in a priority sector for the EU and had a higher risk status, it could have been financed by other sources. The Fund, established through an agreement between the Commission and EIB, would be financed with an initial €21 billion: €16 billion from the EU budget in the form of a guarantee to the European Investment Bank (E IB), and €5 billion from the EIB’s own This is evidenced in the EIBâs Internal Evaluation of EFSI, the Commissionâs Independent Evaluation of EFSI and the Commissionâs Mid-Term Evaluation of CEF.
All platforms were set up with the Cassa Depositi e Prestiti , the Italian NPBI, though one of the Investment Platforms is also opened to other NPBIs. The EIB should use this information in assessing the eligibility of EFSI operations.
One example is a €60 m risk capital fund (i.e. The Commission also recognised the need for effective involvement on the part of the National Promotional Banks and Institutions (NPBIs) in order to enhance the impact of the IPE and EFSI on investment, growth and employment. Thus, according to its operational report, EFSI almost reached the target in terms of approvals, but missed it in terms of signatures. It also started targeting SMEs and mid-cap equity funds within the EU, through investments in SMEs and mid-cap equity funds alongside NPBIs or the EIF. NPBIs generally consider Investment Platforms to be suitable for helping to finance smaller or riskier projects, combining financing from several sources and optimising the allocation of risk between various investors. This shows the importance of assessing whether projects lack sufficient financing because of market failures, in order to reduce the risk of replacing other available sources of finance. At operation level, following the entry into force of EFSI 2.0 Regulation, EIB has already included qualitative assessment of additionality, including of market failure or suboptimal investment situations (including the availability of complementary and alternative sources of finance and their terms and conditions). 31 Annex II to the EFSI Regulation, Section 3. However, 27 of the 86 respondents (31 %) stated that their project could have been fully financed from other sources. In addition, the EIB also claimed that its financing would have a âstrong signalling effect for future crowding-in of further bank lenders and institutional investorsâ. In its role as the implementing agent of EFSI, the EIB accepts the recommendation. We further examined the role of NPBIs, and investment platforms in addressing the issue of geographical concentration. 54 An operation where the EIB makes a loan to local banks or other intermediaries which subsequently provide additional lending to the final beneficiaries. For the IIW, there is currently little overlap between EFSI and ESI Funds financial instruments targeting the same thematic objective, especially because projects supported under shared management are usually of a smaller size and not necessary applicable for EFSI support. It is also used as a reference point for credit risk pricing. The majority of the IIW portfolio of operations consisted of classic long-term senior loans for corporates or project finance (around â¬17 billion or ca. The audit objective was to assess whether EFSI was effective in raising finance to support additional investment within the whole EU. We found that the EIB Group had approved â¬59.3 billion of EFSI financial operations as at 30 June 2018. .wpv_page_current {background-color: #0e5c5d;; color: #fff; padding: 8px 12px;}
Based on a risk assessment, we examined whether: Our audit covered the EFSI operations from its launch in 2015 up until July 2018. Source: ECA, based on the Draft general budget of the European Union for the financial year 2019 (Working document part X).
13 Regulation (EU) 2017/2396 of the European Parliament and of the Council (OJ L 345, 27.12.2017, p. 34) (âEFSI 2.0 Regulationâ). The Commission proposal for the InvestEU Regulation contains a wider set of performance and monitoring indicators. 17 out of the 21 Investment Platforms signed under the IIW involved NPBIs, in some cases with the same NPBIs participating in several Investment Platforms. Two thirds of the EUR334.8 billion raised comes from private resources, meaning that the EFSI has also met its objective of mobilising private investment. As part of our audit work, we reviewed reports on EFSIâs performance published by the time of our audit, analysed the EFSI portfolio of operations, and reviewed a sample of operations as well as interviewed and surveyed Commission and EIB group officials, EFSI counterparts, and experts in the field. 19 EIB COP 2015 â 2017, Foreword, pp. For example, in recent years (including shortly before signing the loan agreement with the EIB), the company had finalised two senior unsecured bonds issues (totalling â¬0.9 billion with maturities up to 12 years) and had secured a revolving credit facility with commercial banks. Despite this fourfold increase, we calculated the cumulative shortfall over the period 2015-2017 compared to the planned levels to be around â¬13 billion, i.e. It consists of three mutually reinforcing pillars: (i) the European Fund for Strategic Investments (EFSI), providing finance for investment; (ii) the European Investment Advisory Hub, providing technical assistance to project promoters, and the European Investment Project Portal, providing visibility and exchange of information for projects looking for finance; and (iii) regulatory and structural reforms to remove barriers to investment. The EIB assessment focuses on whether EFSI support attracts other sources of finance rather than whether it avoids displacing available sources of finance from commercial banks, capital markets, NPBIs, or even EIB-managed EU financial instruments or the EIBâs own-risk financing (Box 3). â¬21 billion) â Figure 7. promoting the justified use of higher-risk EIB products under EFSI; encouraging complementarity between EU financial instruments and EU budgetary guarantees; improving the assessment of whether potential EFSI projects could have been financed from other sources; estimating better the investment mobilised; improving the geographical spread of EFSI supported investment.
This analysis of the bank’s climate action is based on the climate action database disclosed by the EIB. This audit covered the EFSI operations from its launch in 2015 until July 2018. In the cases that were reviewed by the ECA, the EIB confirms that it adjusted the double counting as soon as the information became available in line with the methodology. Thus, the EIB Group reported an EFSI financing totalling â¬194 million (40+29+125 million) and estimated investment mobilised by EFSI totalling â¬4.9 billion (0.3+0.8+3.8 billion), giving an average multiplier effect of 25x.