The European Fund for Strategic Investments (hereinafter “EFSI”) was established by Regulation (EU) 2015/1017 of the European Parliament and of the Council of 25 June 2015 (hereinafter “Regulation”), and is the backbone of the Commission’s investment plan, which aims to bring up to EUR 315 billion into the European economy from both private and public investments by the end of 2017.
The fund will be primarily financed by the European Investment Bank (hereinafter “EIB”), while the EU will provide guarantees from its own budget. EU guarantees will primarily cover loans, guarantees, counter-guarantees, capital market instruments and any other form of financing instruments or credit enhancement provided by the EIB and EFSI.
In practice, the investment plan will work as follows: the EIB will provide project promoters with a loan to a value of approx. 50% of total project costs with the support of the EFSI, while the remaining 50% will be financed from its own resources, from investors or through public subsidies (grants).
The aim of the investment plan is to support economically viable projects. The Commission expects to largely support projects in the areas of energy, transport and social infrastructure, natural resources and the environment, but also education, knowledge, innovation and the digital economy. Support will be available for not only large corporations, but also for small and medium enterprises.
National promotional banks will also play an important role in the investment plan, by helping to restore investment in Europe through their participation in investments from the EFSI. The investment plan envisages national promotional banks from several Member States pooling their resources with the European Investment Bank in the establishment of investment platforms, which will allow companies throughout Europe to gain access to funding through the EFSI.
As part of the investment plan, Českomoravská záruční a rozvojová banka (Czech-Moravian Guarantee and Development Bank), for example, concluded an agreement with the EIB and ESFI to provide small and medium enterprises with loans amounting to up to EUR 160 million by the end of 2017.
Yet, national development banks or other banks or funds offering loans mediated through the investment plan can also apply for loans as part of the investment plan.
In addition to the EFSI, the Regulation also establishes the European Investment Advisory Hub (hereinafter “EIAH”), which commenced activity in September 2015. The main aim of the EIAH is to provide advisory services to investors and financial intermediaries. The EIAH largely provides technical assistance in the preparation of investments and their financial structuring, the use of innovative financial instruments and, where necessary, advice on relevant issues relating to EU legal regulations.
For more information, please contact our office’s partner, Mgr. Jiří Kučera, e-mail: jkucera@kuceralegal.cz ; tel.: +420604242241.