InvestEU program unlocks billions for investment across the EU
The European Union (EU) has taken an important step in the implementation of the InvestEU program with the signing of the guarantee and advisory platform agreements between the European Commission, the European Investment Bank (EIB) and the European Investment Fund (EIF). The InvestEU program is a key pillar of the biggest recovery plan ever put in place by the European Union to recover from the COVID-19 pandemic and help build a greener, more digital and more resilient European economy. It can also help the European economy to meet new challenges arising from major uncertainties related to the global and security outlook.
InvestEU consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Hub. Portal. By providing an EU budget guarantee of €26.2 billion to support financing and investment operations, the InvestEU program will attract public and private finance aimed at mobilizing at least €372 billion of investments by 2027, benefiting individuals and businesses across Europe. Beyond securing large volumes of investment, it will focus on enabling the financing of investments that have the greatest impact on targeted policy objectives.
The EIB Group (composed of the EIB and the EIF) will implement 75% of the EU Budget Guarantee (€19.65 billion) and the same share of the advisory budget under the Advisory Platform InvestEU. In addition to the EIB and the EIF, which are the main implementing partners, international financial institutions active in Europe and national development banks will be able to use part of the guarantee (25% in total) to support investment programs and projects.
The first InvestEU projects are expected to receive an InvestEU guarantee as early as April, after being presented to the Investment Committee.
The InvestEU Fund, building on the success of the European Fund for Strategic Investments (EFSI)
The InvestEU Fund will provide the EU with crucial long-term financing, attracting private investment. The guarantee agreement determines the rules for the granting of the EU budget guarantee as well as its implementation by the EIB and the EIF. Operations benefiting from the EU Budget Guarantee will finance investments in four policy areas to support EU objectives of sustainability, scientific excellence and social inclusion: sustainable infrastructure; research, innovation and digitization; small and medium-sized enterprises (SMEs) and small ETIs; and social investment and skills. At least 30% of all investments will be made in areas that directly support Europe’s green transition.
The InvestEU program builds on the successful model of the Investment Plan for Europe and its European Fund for Strategic Investments (EFSI). It combines 13 EU financial instruments available under the previous Multiannual Financial Framework (MFF) into one integrated instrument and covers a wider scope of action than the EFSI. The impact of EFSI loans has been significant. The EFSI has exceeded expectations and, to date, has mobilized €546.5 billion of investments, benefiting more than 1.4 million SMEs. It has become successful in co-funding projects that otherwise might not have been completed.
The InvestEU Advisory Hub, which helps projects reach the funding stage
Building on the success of the European Investment Advisory Hub and other advisory programmes, the EIB and the European Commission have also signed an agreement to provide technical, financial and strategic expertise to project promoters , regional and national authorities and financial intermediaries through the InvestEU Advisory Hub. The Advisory Hub, managed by the European Commission and working with the EIB as lead advisory partner, will provide an efficient entry point for requesting financial and technical assistance, drawing on the expertise of the entire EIB Group.
Working across the four policy strands of InvestEU, the Advisory Hub will support, among others, public and private sector promoters in the identification, preparation and implementation of InvestEU guaranteed investment projects and investment platforms. investment across the Union.
“This deal comes at just the right time as we emerge from the pandemic and face growing geopolitical uncertainty. InvestEU will stimulate vital large-scale private sector investment to help create and sustain the businesses and jobs of tomorrow. This will better equip us to deal with the inevitable economic and social consequences of the war in Ukraine. Today’s historic agreement will help us achieve our medium-term economic and political goals,” said Executive Vice President for an Economy that Works for People, Valdis Dombrovskis.
“The investment needs that we have to meet in the years to come are really huge. And I am convinced that InvestEU will prove to be an invaluable tool to help us meet this challenge. Today we open a new chapter in the history of the successful partnership between the European Commission and the EIB Group: to build sustainable infrastructure, stimulate innovation, develop future-oriented skills and foster the growth of SMEs. said the Commissioner for the Economy, Paolo Gentiloni. .
“Over the next 6 years, InvestEU will unlock much-needed finance to support business, innovation, infrastructure and the environment across Europe. By combining public funds with our expertise and our ability to bear risk, we can successfully mobilize large-scale investments, both public and private, that will support Europe in its recovery from the COVID-19 crisis and in the transition to a green and sustainable economy. We are delighted and proud to join the European Commission and other partners in our role as the main implementing and advisory body of the InvestEU programme,” added the Vice-President of the European Investment Bank, Professor Teresa Czerwinska.
“The launch of InvestEU marks the opening of an important new chapter in terms of EU support for small businesses. InvestEU brings together a host of EU financial instruments under one roof with a strong thematic focus, pursuing a green, digital and inclusive transition as Europe recovers from the crisis. As a leading partner in these efforts to address the multiple challenges facing our societies and the European economy today, the EIF stands ready to play its part in fostering innovation, creating new markets, strengthening competitiveness and boosting jobs and growth”, European Investment Fund Managing Director Alain Godard mentioned.
InvestEU: The InvestEU program will provide the EU with crucial long-term financing by mobilizing substantial private and public funds to support a sustainable recovery. It will also help mobilize private investment for EU policy priorities, such as the European Green Deal and the digital transition.
The InvestEU program will bring together under one roof the multitude of EU financial instruments currently available to support investment in the EU, making the financing of investment projects in Europe simpler, more efficient and more flexible.
The program consists of three elements: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund will be implemented through financial partners who will invest in projects using the EU budget guarantee of €26.2 billion. The full budget guarantee will support implementing partners’ investment projects, increase their risk-bearing capacity and thus mobilize at least €372 billion of additional investments.
The European Investment Bank (EIB) is jointly owned by the 27 EU Member States. Through its lending, blending and advisory activities, it seeks to boost Europe’s potential for jobs and growth, support climate change adaptation and mitigation actions and promote EU policies outside the EU. Between 2015 and 2020, the EIB was the implementing partner of the European Fund for Strategic Investments and manager of the European Investment Advisory Hub, the main pillars of the Investment Plan for Europe.
The European Investment Fund (EIF) is part of the EIB Group. It supports European SMEs by improving their access to finance through a wide range of selected financial intermediaries. The EIF designs, promotes and implements equity and debt financing instruments targeting SMEs. In this role, the EIF supports EU objectives for entrepreneurship, growth, innovation, research and development, green and digital transitions and jobs.