European Commission – High-Level Expert Group on Sustainable Finance delivers early recommendations

On July 13, The High-Level Expert Group on Sustainable Finance, established by the Commission, has published its first report setting out concrete steps to create a financial system that supports sustainable investments. The Commission will explore some key early recommendations to take further steps towards a low carbon, more resource-efficient and sustainable economy.

The report is part of broader efforts to map out an EU strategy on sustainable finance, a priority action of the Capital Markets Union (CMU) Action Plan. The first wave of EU reforms focused on making the financial systemmore stable and resilient. The Commission is now driving forward efforts to reorient the financial system so that it can support long-term, sustainable growth. The financial sector has a vital role to play in reaching the climate change goals of the Paris Agreement and the EU’s 2030 Agenda for sustainable development. It is also vital that more private capital is mobilised towards green and sustainable investment so as to enable the transition to a low-carbon economy.

Download the interim report

Climate Bonds Initiative – mobilizing the bond market for climate change solutions

Climate Bonds Initiative has released a series of useful briefing papers on ways to mobilise the bond market for climate change solutions. 

 

Green Securitisation: unlocking finance for small-scale low carbon projects

Green securitisation can help unlock finance in debt capital markets for smaller scale low carbon and climate-resilient assets. The public sector has a key role to play to scale up securitisation markets for green assets.

Green Covered Bonds: building green cover pools

Covered bonds are an ideal tool to finance low carbon infrastructure, having been used in other public priority areas. Identifying existing green cover pools and developing frameworks for other low carbon assets will help scale up investment.

Green Bond Pricing in the Primary Market: Q4 2016 snapshot

Initial findings indicate that there is over-subscription and tighter pricing of USD and EUR denominated green bonds in the primary market.

The Role of Exchanges in accelerating the growth of the Green Bonds Market

There is a clear potential for exchanges to create dedicated green bond segments, develop indices and support market education to facilitate investor decisions towards climate-aligned investments and enhance the market’s liquidity.

Green City Bonds: financing low carbon urban infrastructure

Green City Bonds are increasingly used by municipalities and other city-affiliated entities, such as utilities and transport companies, to finance climate-aligned infrastructure.

 

European Commission – Commission and European Investment Bank announce a fund for broadband infrastructure open to participation of National Promotional Banks and Institutions and of private investors

The European Commission and the European Investment Bank (EIB) has announced today their plans to launch a fund for broadband infrastructure – the Connecting Europe Broadband Fund.

This fund, which will lead to an investment platform combining private and public commitments, is announced together the European National Promotional Banks and Institutions (NPBIs) that aim to participate in the initiative as anchor investors: KfW Bankengruppe from Germany, Cassa Depositi e Prestiti from Italy and Caisse des dépôts et consignations from France. The Connecting Europe Broadband Fund will invest in broadband network infrastructure across underserved areas of Europe.

Günther H. Oettinger, Commissioner for Digital Economy and Society, said: “I am grateful to our financial partners for the establishment of this broadband Fund. It is an important development for smart and efficient funding of broadband projects, especially in underserved areas, in line with the spirit and the letter of the Investment Plan. It is a great step towards a European Gigabit Society for all.”

High level representatives of the three NPBIs underlined the importance of this initiative as one of the first investment platforms under the European Fund for Strategic Investment (EFSI) and the key role of this new financial instrument for the broadband expansion in their respective markets.

The Connecting Europe Broadband Fund should raise at least €500 million at first closing through commitments from private and public investors, including the EIB and the European Commission. The European Commission will invest €100 million into the Fund from the Connecting Europe Facility. This fund will be open to participation of NPBIs. KfW Bankengruppe, Cassa Depositi e Prestiti and Caisse des dépôts et consignations, the three largest European NPBIs, have already expressed their interest in a possible contribution to the fund as anchor investors at first closing.

The Fund should be the first investment platform to support broadband infrastructure under the EFSI, the heart of the Investment Plan for Europe. The EFSI Regulation facilitates the establishment of investment platforms under the EFSI as a tool to pool investment projects with a thematic or geographic focus. The establishment of this investment platform responds to the growing demand for financing of smaller-scale, higher-risk broadband projects across Europe, which currently do not have access to EU finances. The Fund will be additional to other sources of funding from the market, from other EU instruments, or financing of projects by its anchor investors.

The Connecting Europe Broadband Fund aims to invest in equity and quasi-equity, including mezzanine and subordinated debt, in some 7 to 12 broadband projects each year from 2017 to 2021. The Fund’s investments will be of a size between €1 million and €30 million, for projects representing total costs of €150 million or less. Overall, the Fund is expected to unlock additional investments between €1 billion and €1.7 billion in broadband deployment in underserved areas, where very high-capacity networks are not deployed yet. The Fund aims to have invested in 20 countries by 2021.

The operational launch of the Fund is expected to take place mid-2017.

EIB – Investment Plan for Europe – EIB invests EUR 40m in Quaero European Infrastructure Fund

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.

EIB : independent evaluation report on EFSI published

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.”

See report

Confrontations Europe – Assises européennes du long terme

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.

 

EIB : Investment Plan for Europe: EIB participates in SUSI Renewable Energy Fund II

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.

Policy remix needed to tackle pent-up risks, BIS says

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.

EIB Press release : EIB agrees new investment totalling EUR 7.4 billion, including EUR 3 billion for clean transport, energy, SMEs and innovation under Investment Plan for Europe

The Board of Directors of the European Investment Bank today approved EUR 7.4 billion of new financing for 38 projects across Europe and around the world. Negotiations for the approved loans are expected to be finalised in the coming months.

The Board approved EUR 3 billion of new EIB financing for seventeen projects backed by the EU budget guarantee under the European Fund for Strategic Investments (EFSI). This includes research and development of new wind turbines in Germany, investment in research intensive early stage life science companies in Ireland and the UK, equity financing of small infrastructure projects in France and energy transmission in Italy.

The EFSI initiative will also support safety improvements at Vilnius airport and three biomass power plants in the Lithuanian capital and in Portugal, as well as roll-out of 4G mobile internet in Sweden and the Netherlands. Lending under the Investment Plan for Europe is also expected to support SME investment in Spain, Greece, Italy and Portugal.