European Commission and EIB Group sign InvestEU agreements unlocking billions for investment across the European Union

This article is brought to you in association with the European Commission.

• The European Commission, the European Investment Bank (EIB) and the European Investment Fund (EIF) signed the Guarantee Agreement on a European Union budget guarantee of €19.65 billion to support investment projects across Europe
• Investments under the InvestEU programme will focus on four policy areas: sustainable infrastructure; research, innovation and digitisation; small and medium-sized businesses; and social investment and skills
• The European Commission and the EIB also signed the InvestEU Advisory Hub agreement which will provide up to €270 million for market development, developing skills and project level advisory services in the same policy areas
• The agreements pave the way for new investments and related advisory assistance in support of Europe’s post-pandemic recovery and green and digital transitions

Today, the European Union reached a major milestone in the implementation of the InvestEU programme with the signature of the Guarantee and Advisory Hub Agreements between the European Commission, the European Investment Bank (EIB) and the European Investment Fund (EIF). The InvestEU programme is a key pillar of the European Union’s largest ever stimulus package to recover from the COVID-19 pandemic and help build a greener, more digital, and more resilient European economy.  It can also support the European economy in addressing new challenges arising from major uncertainties linked to the global and security outlook.

InvestEU consists of three components: the InvestEU Fund, the InvestEU Advisory Hub, and the InvestEU Portal. By providing a €26.2 billion EU budgetary guarantee to support finance and investment operations, the InvestEU programme will attract public and private financing aiming to mobilise at least €372 billion in additional investment by 2027, benefitting people and businesses across Europe. Beyond securing significant investment volumes, it will focus on enabling the financing of investments that provide the highest impact for the target policy objectives.

The EIB Group (comprised of the EIB and EIF) will implement 75% of the EU budget guarantee (€19.65 billion) and the same share of the advisory budget under the InvestEU Advisory Hub. Further to the EIB and EIF, who are the main implementing partners, international financial institutions active in Europe and national promotional banks will be able to use a share of the guarantee (25% in total) to support investment and projects schemes.

The first InvestEU projects are expected to receive an InvestEU Guarantee as soon as April, after having been 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 funding, crowding in private investments. The Guarantee Agreement signed today determines the rules for granting the EU budget guarantee as well as for its implementation by the EIB and the EIF. The operations benefitting from the EU budgetary guarantee will finance investments in four policy areas to support the EU’s goals in sustainability, scientific excellence and social inclusion: sustainable infrastructure; research, innovation and digitisation; small and medium-sized enterprises (SMEs) and small mid-caps; and social investment and skills. At least 30% of all the investments will be made in areas directly supporting Europe’s green transition.

The InvestEU programme 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) in one integrated instrument and covers a broader scope of policy areas than EFSI. The impact of the EFSI loans has been significant. EFSI over-delivered and so far has mobilised €546.5 billion in investments, benefitting over 1.4 million SMEs. It has become a success in co-financing projects that otherwise might not have been carried through.

The InvestEU Advisory Hub, helping projects reach the financing stage

Building on the success of the European Investment Advisory Hub and other advisory programmes, the EIB and the European Commission also signed an agreement for the provision of technical, financial and strategic expertise to project promoters, regional and national authorities, and financial intermediaries under the InvestEU Advisory Hub. The Advisory Hub, managed by the European Commission and working with EIB as its main advisory partner, will provide an efficient point of access for financial and technical assistance demand, drawing on know-how from across the EIB Group.

Working across all four of the InvestEU policy windows, the Advisory Hub will, amongst other things, support public and private sector promoters in the identification, preparation and implementation of InvestEU guaranteed investment projects and investment platforms across the Union.

Executive Vice-President for an Economy that Works for People, Valdis Dombrovskis, said: “This agreement comes just at the right time as we emerge from the pandemic and face mounting geopolitical uncertainty. InvestEU will spur vital large-scale private sector investment to help build and support the businesses and jobs of the future. This will better equip us as we face the unavoidable economic and social consequences of the war in Ukraine. Today’s milestone agreement will help us reach our medium-term economic and wider policy objectives.”

Commissioner for the Economy, Paolo Gentiloni, said: “The investment needs we must address in the coming years are truly immense. And I’m very confident that InvestEU will prove to be an invaluable tool to help us face that challenge. Today we open a new chapter in the story of the European Commission’s successful partnership with the EIB Group: to build sustainable infrastructure, drive innovation, develop future-oriented skills and nurture the growth of SMEs.”

European Investment Bank Vice-President, Prof. Teresa Czerwińska, said: “Over the next 6 years, InvestEU will unlock much needed financing in support of businesses, innovation, infrastructure and the environment across Europe. By combining public funds with our expertise and risk-bearing capacity we can successfully mobilise 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 thrilled and proud to join the European Commission and other partners in our role as the lead implementing and advisory arm of the InvestEU programme.”

European Investment Fund Chief Executive, Alain Godard, said: “The launch of InvestEU marks the opening of an important new chapter in terms of EU support for small businesses. InvestEU brings together a multitude 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 multiple challenges our societies and the European economy are facing today, the EIF stands ready to do its part in fostering innovation, building new markets, strengthening competitiveness and boosting jobs and growth.”

Background

InvestEU: The InvestEU programme will provide the EU with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It will also help mobilise private investments for the EU’s policy priorities, such as the European Green Deal and the digital transition.

The InvestEU Programme will bring together under one roof the multitude of EU financial instruments currently available to support investment in the EU, making funding for investment projects in Europe simpler, more efficient and more flexible.

The programme consists of three components: 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 entire budgetary guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.

The European Investment Bank (EIB): the EIB, “the EU Bank”, is jointly owned by the 27 EU Member States. Through its lending, blending and advisory activities, it seeks to boost Europe’s potential in terms of jobs and growth, support action to adapt to and mitigate climate change 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): The EIF is part of the EIB Group. It supports Europe’s 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, EIF fosters EU objectives in support of entrepreneurship, growth, innovation, research and development, the green and digital transitions and employment.