According to the data by the European Investment Bank (EIB) published in March 2017, all 28 European Union Member States have used the financing possibilities of the European Fund for Strategic Investments (EFSI). To date the EFSI financing of EUR 32.8 billion has already been approved. It is expected that this financing amount will generate investment of EUR 177.7 billion. The EFSI projects include different sectors: energy (24%), research and development (21%), transport (9%), digital technology (10%), small and medium-sized enterprises (29%), environment and resource efficiency (4%) and social infrastructure (3%) (see Chart 1).
Chart 1. EFSI dashboard (updated 9 March 2017)
Source: European Investment Bank
On 29 September 2016 The European Investment Fund (EIF) and Šiaulių bankas AB (Šiaulių bankas) have signed an agreement to enhance access to finance to innovative small and medium-sized enterprises (SMEs) in Lithuania. This transaction benefits from the support of the European Fund for Strategic Investments (EFSI). The new agreement will allow Šiaulių bankas to provide financing solutions at reduced interest rates to SMEs and small mid-caps over the next two years. EIF’s guarantee is provided under the “EU InnovFin finance for Innovators” initiative with the financial backing under Horizon 2020, the EU Framework Programme for Research and Innovation. The EU’s support for innovative Lithuanian companies under this transaction is expected to generate a portfolio of EUR 50 million of loans and leases for approximatively 450 businesses. More information: http://www.sb.lt/en/news/investment-plan-for-europe-450-businesses-in-lithuania-to-benefit-from-efsi-innovfin-agreement-between-eif-and-siauliu-bankas.
On 16 June 2016 the Board of Directors of the European Investment Bank (EIB) approved the first two projects of Lithuania that will be financed by the European Fund for Strategic Investments (EFSI). The loans are designed for increasing security and its adaptation to servicing of anticipated passenger flows in Vilnius Airport as well as biofuel and waste-fired Vilnius CHP construction projects. A 15-year EIB loan with the EFSI guarantee is issued to Vilnius Airport, i.e. up to EUR 30 million, it represents approximately 44% of total project value, which amounts to almost EUR 69 million. A 17-year EIB loan with the EFSI guarantee is issued to Vilnius CHP Project, i.e. up to EUR 190 million. This amount comprises almost 50% of total project value, which is EUR 381 million.
On 2 June 2016 the European Investment Fund (EIF) and Swedbank signed the first COSME Multi-Country Agreement Benefiting from the Support of the European Fund for Strategic Investments (EFSI). Participation in the COSME programme will allow Swedbank to provide EUR 165 million financing to around 3,000 small and medium businesses in the Baltic States. The EIF will provide Swedbank with guarantees under the COSME programme backed by the European Commission; therefore this will make it possible for Swedbank to substantially reduce collateral requirements for loans to provide financing to enterprises. For small and medium-sized enterprises it means more favourable financing conditions and better access to capital.
On 1 June 2016 the European Investment Project Portal (EIPP) was launched – an online platform bringing together European project promoters and investors from the EU and beyond and increasing the visibility of projects and financing opportunities for projects across Europe. Project promoters willing to register their projects in the European Investment Project Portal or investors searching for viable projects are invited to do that directly at: https://ec.europa.eu/eipp/desktop/en/index.html.
On 1 June 2016 the European Commission published the Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions “Europe investing again. Taking stock of the Investment Plan for Europe and next steps”.
In the 18 months since the Investment Plan was presented, the conditions for an uptake in investment have improved and confidence in Europe's economy and growth are returning. The European Union (EU) is now in its fourth year of moderate recovery, with GDP growing at 2% in 2015. Investment is expected to continue to pick up gradually throughout 2016 and 2017 although it remains below historically sustainable levels (see Chart 2). More information is available in the European Commission Communication at: http://ec.europa.eu/priorities/sites/beta-political/files/1_en_act_part1_v11.pdf
Chart 2. Investment trends in the EU
Source: European Commission
On 22 April 2016 the European Commission Representation in Lithuania and the Investment Bank (EIB) organised international workshop “European Fund for Strategic Investments: Opportunities for the Lithuanian Business Community”. During the workshop the EIB presented new financial products that may be accessed by the Lithuanian business community under the European Fund for Strategic Investments (EFSI).
On 30 March 2016 the European Investment Fund (EIF) signed a guarantee agreement with Finish OP Bank (former Pohjola Bank) backed by the EFSI and designed for lending with the aim to enhance innovative and small and medium-sized enterprises and small mid-cap firms in Finland, Estonia, Latvia and Lithuania. This agreement will enable the OP Bank to issue more loans with support from the EFSI over the next two years providing loans worth EUR 150 million. At least EUR 20 million loans with the EIF guarantee (InnovFin SME guarantee) will be issued to the companies in the Baltic States. Larger-scale projects will be financed under this agreement in Lithuania and the loans of at least EUR 1 million and above will be issued.
On 8 March 2016 a Memorandum of Understanding was signed between UAB „Investicijų ir verslo garantijos“ (INVEGA) (Private Limited Company Investment and Business Guarantees) and the EIB. It envisages the launch of partnership between the INVEGA and the European Investment Advisory Hub (EIAH). The Memorandum stipulates that the INVEGA commits to sharing knowledge and best practice in areas relevant to the scope of EIAH’s activities and further establishes the possibility for INVEGA to act as a national point of entry to the EIAH in the future.
The Investment Plan for Europe was also presented to the representatives of public and private sector of Lithuania on 18 September 2015. Jyrki Katainen, European Commission Vice-President for Jobs, Growth, Investment and Competitiveness and Werner Hoyer, President of the European Investment Bank paid a visit to Vilnius on this special occasion. During the event the representatives of the European Commission, the EIB and the European Investment Fund presented the possibilities a new Investment Plan for Europe opens for business, investors, central and regional authorities, communities and other interested parties. The financing conditions for large-scale infrastructure, small and medium business development and innovation projects. The material of the event: information of the European Commission, the European Investment Bank and the European Investment Fund.
INVESTMENT PLAN FOR EUROPE
On 28 November 2014 the European Commission (EC) presented the Investment Plan for Europe, which will aim to promote economic growth and create jobs across Europe. This plan consists of three mutually reinforcing strands. First, mobilising at least EUR 315 billion of additional investment over the next three years by the most efficient use of public resources and promotion of private sector investment. Second, targeted initiatives aimed at ensuring that these additional investments met the needs of the real economy. Third, measures aimed at providing greater regulatory predictability and at removing barriers to investment as well as making Europe more attractive and multiplying the impact of the Plan (see Chart 3).
Chart 3. Investment Plan for Europe
Source: European Commission
One of the key integral parts of the Investment Plan for Europe – establishment of the European Fund for Strategic Investments (EFSI). On 25 June 2015 the Regulation of the European Parliament and the Council on the establishment of the EFSI was adopted. (reference to EFSI Regulation).
The purpose of the EFSI: to support long-term strategic investments across the EU and to ensure better access to finance for companies with the staff of up to 3,000, mostly focusing on small and medium-sized enterprises (SMEs) and enabling the European Investment Bank (EIB) to assume risks.
The EFSI participants: the EIB group and the EC as well as willing to participate Member States and other investors (e.g. national development banks, private sector).
Financial instruments to be provided by the EFSI: loans, guarantees, counter-guarantees, capital market instruments and other financing and credit enhancement instruments.
The EFSI financing: the EFSI is EU budget guarantee of EUR 16 billion, topped up by EUR 5 billion of own capital appropriation from the EIB. It is planned that the EFSI resources worth EUR 21 billion will mobilise EUR 315 billion of additional investment across Europe over the next three years (Chart 4).
Chart 4. Financing from the European Fund for Strategic Investments
The EFSI financing priority areas:
Energy sector development, including energy supply safety;
Transport infrastructure and equipment as well as innovation transport technology development;
Research, technological development and innovations;
Creation and implementation of information and communication technologies;
Efficiency of the use of environment and resources;
Human capital, culture and health;
Projects by SMEs and mid-cap firms with the staff of up to 3,000.
Projects financed by the EFSI should be:
Economically and technically viable;
In line with the European Union policy objectives (including progressive, sustainable and integral growth, and high-quality job creation, economic, social, and territorial cohesion objectives);
Ensuring additionality (EFSI supports operations to address market failures or sub-optimal investment situations and supporting operations which could not have been carried out under existing Union financial instruments. For that purpose, the EFSI should typically target projects with a higher risk profile than projects supported by EIB normal operations);
Maximise where possible the mobilisation of private sector capital.
It is noteworthy that the EFSI could be an additional instrument for implementation of the investment project, i. e. the funds for the same investment project (if it is in line with the set requirements) might be allocated also from the Structural Funds, EFSI and other sources.
The EFSI coordination with the European Structural and Investment (ESI) Funds
The provisions of the Regulation on the establishment of the EFSI enable coordination of financing between the EFSI and ESI Funds. Both the EFSI and the ESI Funds play an important role in the process of the Union growth and job creation, and although these are totally different financial instruments, they are perfectly mutually complementary and help to pursue common goals of the European Union.
More information is available in the European Commission publication on coordination between the EFSI and the ESI Funds: (enclosed hereto)
How to apply for project financing from the EFSI?
Project promoters (where the required loan or guarantee exceeds EUR 10 million (for high value-added generating projects even lower financing need may be considered)) should apply to the EIB directly, i. e. to its headquarters in Luxembourg (Mr. Rafal Rybacki, Directorate for Operations Head of Public Sector Division for Poland and Baltics, e-mail: firstname.lastname@example.org, EIB general phone: (+352) 4379-22000) or EIB Helsinki Office (Mr. Jukka Luukkanen, Head of Helsinki Office, e-mail: email@example.com).
For financing of small and medium-sized enetrprises (SMEs) and mid-cap firms, project promoters should apply to the financial intermediaries of the European Investment Fund in Lithuania: OP Bank (https://www.pohjola.lt/ee/kontaktai), Swedbank (https://www.swedbank.lt/lt/pages/kontaktai) and Šiaulių bankas (www.sb.lt).
More information is available at: http://www.eib.org/efsi/index.htm, http://ec.europa.eu/priorities/jobs-growth-investment/plan/index_en.htm; http://www.eif.org/what_we_do/where/index.htm http://europa.eu/youreurope/business/funding-grants/access-to-finance/index_en.htm.
EUROPEAN INVESTMENT ADVISORY HUB
The European Investment Advisory Hub (EIAH) launched its activities on 1 September 2015. The EIAH provides various advisory services: helps to prepare and implement projects to be commercially viable, to assess possibilities to benefit from financial instruments, to shape and implement public and private partnership thus facilitating the use of financing.
The EIAH - a gateway to:
Targeted advisory support for project implementation;
Technical capacity building;
Expert guidance from experienced financial & technical professionals;
Information and knowledge sharing.
It is important that the EIAH is not established exceptionally for financing the EFSI projects. Consultations are provided regarding all investment projects implemented in the European Union. As regards projects that are implemented by public sector entities, consultations are provided free of charge, however, in certain cases, private sector may be subject to a fee for using the EIAH services. More information on the EIAH is available at: http://www.eib.org/eiah/index.htm.
EUROPEAN INVESTMENT PROJECT PORTAL
The European Investment Project Portal (EIPP) is a web portal administered by the EC enabling investors to become aware of the existing and future projects throughout Europe in order to attract as much investment as possible. The EIPP provides an opportunity for the EU-based project operators (public and private sectors as well as public and private partnership entities) looking for external financing to share the information on their investment projects and ideas with potential investors.
Projects eligible for the EIPP:
Worth at least EUR 10 million;
Fall under one of the pre-determined high-economic-value-added areas (a choice of up to two areas per project is available to the promoters);
Expected to start within three years of their submission to the EIPP;
Promoted by a public or private legal entity established in an EU Member State;
Compatible with all applicable EU and national laws.
Public sector project promoters are exempt from the project submission fee. After checking whether applications of private project promoters are comprehensive and ready to use, a fee of EUR 250 per one project will be charged. During the pre-launch phase this fee will be EUR 100. On the EIPP all the European Union projects may be published irrespective of whether they will be funded by the EFSI funds or not. More information is available on the website of the EIPP at: https://ec.europa.eu/eipp/desktop/en/index.html
Should any additional questions arise, please do not hesitate to contact Ms. Agnė Metelionytė, Head of the EU Affairs Coordination and Analysis Division, EU and International Affairs Department (phone: +370 5 2199 388, e-mail: firstname.lastname@example.org) or Ms. Eglė Kropienė, Chief Specialist of the EU Affairs Coordination and Analysis Division, EU and International Affairs Department (phone: +370 5 2199 317, e-mail: email@example.com).