What does the Investent Plan cover?
The investment plan focuses on the strengthening of European investments to stimulate jobcreating and growth.
To achieve these goals, the plan is active in three areas
- making smarter use of new and existing financial resources
- creating investment-friendly environment
- providing visibility and technical assistance to investment projects
The three pillars of the investment plan
1. the European Fund for Strategic Investments (EFSI)
2. supporting investment in the real economy
3. creating an investment friendly environment
1. What is the European Fund for Strategic Investments (EFSI)?
The European Fund for Strategic Investment (EFSI) focuses on infrastructural and innovation projects, Small- and Medium- sized Enterprises (SMEs) and mid-caps (companies with between 250 and 3000 employees). Mobilisation of private capital is a key feature of the EFSI. EFSI supports innovative projects which may require risk shield.
Using of public resources the EFSI is being set up within the European Investment Bank (EIB) in 2015. The fund mobilizes private investments and provides credit protection for EIB and the EFSI financing.
European Fund for Strategic Investment will mobilise investments in the real economy in areas including infrastructure, education, research, innovation, renewable energy and energy efficiency. It will also focus on Small- and Medium-sized Enterprises (SMEs) and mid-caps (companies with between 250 and 3000 employees).
To establish EFSI, a guarantee of €16 billion will be created. The EU guarantee will be backed by a guarantee fund of €8 billion (half the amount) from the EU budget. The EIB will commit €5 billion, giving EFSI a risk absorbing capacity of €21 billion.
The fund - the €21 billion - is expected to achieve an overall multiplier effect of 1:15 and thus generate up to €315 billion in total investment. This means that €1 of public money used by the fund is expected to generate €12 from private investors and €3 from the EIB. The exact multiplier effect is different for each project.
2. Ensuring that investment finance reaches the real economy
The European investment project portal and a European investment advisory hub have been established to help investment finance reach the real economy.
The hub provides technical assistance and support. It bundles together the existing EIB technical assistance programmes and provides additional advisory services for cases not covered by the existing programmes.
The project portal will help potential investors to find information about each project and investment opportunities.
3. Improving the investment environment
The aim is to boost investment by improving the business environment and easing access to finance, particularly for small and medium-sized businesses.
The overall objective is to remove barriers to investment and create simpler, better and more predictable regulation in the EU, especially in infrastructure sectors, where investments span several years or decades.
To help improve financing conditions in the EU, the plan envisages the creation of a capital markets union to reduce fragmentation in the financial markets and increase the supply of capital to businesses and investment projects.
In December 2016 the Council adopted conclusions on a number of issues affecting investment in the EU, as identified by the Economic Policy Committee. The conclusions should feed into the recommendations to the member states under the European Semester, the EU's policy monitoring process.