Ambroise Fayolle, Vice-President of the European Investment Bank (EIB), and Sébastien Bourget, Managing Partner of Quaero Capital, announced in Strasbourg the EIB’s EUR 40m equity participation in Quaero European Infrastructure Fund. This investment is covered by the guarantee of the EU budget under the Investment Plan for Europe, more commonly known as the Juncker Plan.
The participation of the EIB – a European benchmark financier – will be vital to enable Quaero European Infrastructure Fund to reach a scale of EUR 250m, thereby helping to attract other investors. Quaero European Infrastructure Fund provides equity financing for projects in the fields of social infrastructure, transport, telecoms, energy and public or private amenities. The Fund invests in Europe, where its core target is the infrastructure project financing market, translating into small to medium-scale operations.
On October 20, the Long-term investment and reindustrialisation Intergroup of the European Parliament held a lunch-debate on the topic of energy renovation as a long-term viable investment for the EU in the presence of Members of the European Parliament (MEPs), officials from the European Commission, and representatives of the industrial and the financial sector.
Download the agenda
Download the biography of the speakers
Panama Bartholomy – “Tackling standardisation in order to stimulate EE investment“
Lucas Bertalot – “Energy renovation a long-term viable investment for the EU“
Jessica Stromback – “Unlocking investment for smaller energy efficiency projects.pdf“
The OECD has released a Progress Report which updates analysis in the OECD’s 2015 Report for G20 Finance Ministers and Central Bank Governors “Mapping Channels to Mobilise Institutional Investment in Sustainable Energy” (OECD, 2015a). The report is also provided as a contribution to the “Greening Institutional Investors” sub-group of the G20 Green Finance Study Group, co-chaired by the People’s Bank of China and the Bank of England.
The report gives a review of institutional investment in green infrastructure (focused on renewable energy) that is occurring organically, as in where governments set an investment-grade enabling environment but do not deploy any further intervention to mobilise institutional investors. A stock-taking section follows, focused on institutional investment in green infrastructure where the public or official sector has deployed a risk mitigant or transaction enabler to open up the supply of investment. This section is accompanied by a research database to be made available on the OECD website. A summary section with implications for further research concludes the main body of the report. Finally, a fifth, self-contained section of the report, prepared by the World Bank Group as an input to the report, provides a preliminary description of the role of sovereign wealth funds (SWFs) and strategic investment funds (SIFs) in green finance.
See the report
The EIB published its first report “Evaluation of the functioning of the European Fund for Strategic Investments” today. The report was carried out by the EIB’s Operations Evaluation Division, a unit which draws up evaluation reports about the EIB’s work independently from EIB management. The report was drawn up as required by the EFSI Regulation. It covers the period from September 2014 to June 2016 and focuses on the portfolio of operations, the governance and organisational structures of the initiative, as well as project procedures and guidelines.
According to this report, the European Fund for Strategic Investments (EFSI) is on track to mobilise private capital which is crucial to strengthen Europe’s competitiveness. Ambroise Fayolle, Vice President at the European Investment Bank (EIB) commented: “This independent evaluation report confirms that EFSI is on track to deliver on its objective, under the Investment Plan for Europe, to mobilise EUR 315 billion in investments by 2018. EFSI has also demonstrated that it is an effective way to crowd in investors. So far over 60% of total investment potentially mobilised by EFSI comes from the private sector and 85% of projects supported by the innovation and infrastructure window have been done with new clients. This is crucial to relaunch investment and put money to work in making Europe competitive globally.”
Le 15 juin 2016, se sont tenues les Assises européennes du long terme, organisées par Confrontations Europe, partenaire de l’Intergroupe, en présence notamment de Sandro Gozi, Secrétaire d’Etat italien aux affaires européennes, Jyrki Katainen, Vice-Président de la Commission européenne des Affaires économiques et monétaires de l’euro, Laurent Zylberberg, Directeur des relations institutionnelles et de la coopération européenne et internationale du Groupe Caisse des Dépôts et Edoardo Reviglio, Economiste en chef de la Cassa Depositi e Prestiti.
Ces Assises étaient rythmées par trois table-rondes :
– Instabilité globale et européenne : de quelle politique macroéconomique l’Europe a-t-elle besoin ?
– La parole aux acteurs financiers : synergies et complémentarités
– Leçons à tirer du Plan Juncker et perspectives
Les Actes issus de ces Assises européennes du long terme ont été publiés et sont disponibles sur ce lien.
The European Investment Bank (EIB) has signed a subscription agreement with Sustainable Sàrl, a subsidiary of SUSI Partners AG (SUSI), putting into effect the EIB’s investment commitment of up to 62 million euro in the SUSI Renewable Energy Fund II (SUSI RE II). The Investment is guaranteed under the European Fund for Strategic Investments.
The portfolio of SUSI’s second renewable energy fund currently comprises 13 wind and solar farms in Germany, France, United Kingdom, Portugal and Italy, delivering a total output of approximately 170 MW of clean energy. The fund is diversified technically as well as geographically, with projects throughout the EU.
On July 22, 11 MEPs from the long-term investment Intergroup wrote to Vice-President Dombrovskis and called for the Commission’s opposition to recent draft proposals from the Basel Committee on the revision of the standardized approach for credit risk. A major concern is related to the calibration for specialized lending, including for infrastructure financing which could reach 150% in some instances. A figure to be put into perspective as the Basel Committee considers that unrated corporate exposures should be risk weighted at 100 %, even while their loss rate is generally higher than for infrastructure project finance loans.
A solution to protect the financing of infrastructure projects by banks without compromising financial stability could reside in a model in which “the eligible infrastructure assets could be restricted to projects within the EU and, outside the EU, to sectors with high recovery rates, low volatility and complying with the investment guidelines of long-term investors.“
The Long-term Investment and reindustrialisation Intergroup will keep mobilizing to defend the imperative financing of infrastructures in the EU.
See the letter
On June 29, the Long-Term Investment and Reindustrialisation Intergroup held a lunch-debate in the European Parliament on long term investments in the railway sector.
This lunch-debate, sponsored by the European rail industry (UNIFE) and the Community of European Railway and Infrastructure Companies (CER), was the occasion to discuss the barriers for investment in the railway sector and the merits of the European Fund for Strategic Investment (EFSI) to address them.
List of the participants
Presentation of Arnaud De Monts, Alstom
Speech of Paul Mazataud, Europe Director of SNCF Réseau
Presentation of Pierre Menet, Caisse des Dépôts et Consignations
There is an urgent need to rebalance policy in order to shift to a more robust and sustainable global expansion and address accumulated vulnerabilities, the Bank for International Settlements (BIS) writes in its 86th Annual Report, calling for prudential, fiscal and structural policies to play a greater role.
“We need policies that we will not once again regret when the future becomes today,” the BIS says in the report, released today, which describes a broad-based economic realignment as financial cycles mature, commodity prices fall, the dollar strengthens and global liquidity starts to tighten.
In its flagship economic report, the BIS argues that growth rates are not far from historical averages. Still, it identifies a risky combination of unusually low productivity growth, historically high global debt and shrinking room for policy manoeuvre, which leaves the global economy highly exposed, not least to shocks and political risks.
The recommended policy rebalancing should be incorporated into a long-term framework with a stronger focus on preventing costly financial boom-bust cycles, the BIS says. Prudential, fiscal and structural policies need to work alongside monetary policy, with a clear delineation of responsibilities.
The structure of taxes and subsidies could be adjusted to remove the bias towards debt accumulation, for example by eliminating the tax advantage of debt over equity, and the quality of public spending could be improved by focusing more on investment. Throughout this process, prudently assessing fiscal space and maintaining sound public finances are key.
On June 16, Roberto Gualtieri, Chairman of the Economic and Monetary (ECON) Committee of the European Parliament, wrote to Commissioner Hill to express the concerns of the ECON Members of the IFRS Working Group over the International Financial Reporting Standard IFRS 9 potential negative impact on long term investments.
As the ECON Committee is soon to enter the three-month long regulatory scrutiny period for the endorsement of IFRS 9, many questions are left unanswered:
- Will the extension of the volume of financial assets measured at fair value increase pro-cyclicality?
- How will the new loan loss provisioning rules impact the bank’s equity levels and financial stability?
- How will IFRS 9 interfere with prudential requirements for banks?
- Regarding the misalignments of IFRS 9 with the accounting standard on insurance contacts IFRS 4, will the European Commission follow EFRAG’s advice to allow for all regulated insurance companies in the EU to adopt the deferral approach proposed by the IASB?
As the EU is in a dire need for long-term investments, the European Parliament wants to prevent any risk of having new regulation jeopardize investors’ ability to manage their assets in a positive fashion for the whole economy.
See the letter