The European Fund for Strategic Investments
#EFSI has mobilised €335 billion in additional investment across the EU since July 2015. It has supported at least 750,000 jobs in the EU.
EFSI in the Research, Development and Innovation sector
Sustained investment is required to turn research and development into innovation. Investing in research is a priority for the EU and the Investment Plan for Europe has been instrumental in supporting research-related projects across Europe. On average, around a quarter of Investment Plan projects have been in RDI.
The European Fund for Strategic Investments (EFSI) is the central pillar of the Investment Plan, the so-called Juncker Plan. It provides a first loss guarantee, allowing the EIB to invest in more, often riskier, projects. Through the EFSI, the Investment Plan for Europe helps to finance Research, Development and Innovation (RDI) activities across a wide range of sectors, such as key enabling technologies, bio-economy, circular economy, health and well-being, new transport energy technologies; it also helps innovative SMEs to access finance and research infrastructures to fill their investment gaps. The Plan can also support education through upgrading and modernisation of educational infrastructure, student loan schemes, and the financing of the “knowledge triangle”: Innovation, Business and Higher Education.
Taken together with other EU programmes, the EFSI represents an opportunity to scale up private and leverage public spending, build a pipeline of quality projects and remove the barriers to investment in RDI. The Commission’s objective is to ensure that European innovations can be brought to the market by successful new companies using the right financial instruments. Financial instruments such as loans, equity and guarantees have a greater leverage effect than grants because the European Investment Bank (EIB) can borrow against the money, rather than the money going directly to the end-recipient. The EU guarantee allows the EIB to borrow around three times as much, and then finance the final recipient, rather than the money being given directly as grants. Read more here.
EFSI in the energy sector
The Paris Climate Agreement is a historical milestone on global climate action. Sustained investments in energy efficiency, renewables and power grids and interconnectors are vital to speed up the decarbonisation of the EU economy. There is a strong need to step up research, development and innovation (RDI) activities to achieve the EU climate and energy objectives in a cost-effective manner and to strengthen EU leadership in the manufacturing industry of low-carbon and energy-efficient technologies. Financial instruments are set to play an increasingly prominent role to meet this challenge.
The Investment Plan for Europe is supporting investments in energy efficiency and renewables. The European Fund for Strategic Investments (EFSI) is the central pillar of the Juncker Plan. It provides a first loss guarantee, allowing the EIB to invest in more, often riskier, projects. The new EFSI 2.0 underlines the importance of sustainability by linking EFSI to more cross-border and sustainable projects, in particular those that help achieve the COP21 climate targets, to help the transition to a resource efficient, circular and zero-carbon economy. At least 40% of EFSI infrastructure and innovation projects will aim to contribute to climate action in line with the Paris Agreement. Read more here.