The European Investment Bank (EIB) and Instituto de Crédito Oficial (ICO) have signed a EUR 50 million loan that ICO will use to finance infrastructure projects through its venture capital fund FOND-ICO Infraestructuras. The agreement was signed today in Madrid by EIB Vice-President Román Escolano and ICO’s CEO, Emma Navarro.
Under this financing operation, which is backed by the European Fund for Strategic Investments (EFSI), the EIB will share with ICO the risk on eligible infrastructure projects in which FOND-ICO Infraestructuras invests, allowing them to benefit from support under the Investment Plan for Europe.
The European Fund for Strategic Investments (EFSI) is benefitting regional economies and communities mostly through massive support for small and medium enterprises (SMEs) and thanks to the first investment platforms involving local actors. This was the main message delivered by the Vice-President of the European Commission Jyrki Katainen to local leaders during the debate promoted on 22 April by the European Committee of the Regions’ (CoR) commission for economic policy (ECON) to assess the EFSI impact at regional level.
The Presidents of the major development banks in the world
On April 16, The Global Infrastructure Forum took place as part of the 2016 World Bank Group Spring Meeting in Washington D.C, USA. The Global Infrastructure Forum is the flagship event on collaborative financing for infrastructure development in support of the Sustainable Development Goals. The event was jointly organised with the United Nations, key development partners in infrastructure and the multilateral development banks (MDBs).
The Global Infrastructure Forum presented a range of opinions on how to bridge infrastructure and capacity gaps in challenging environments. Furthermore, it highlighted opportunities for investment and cooperation that are environmentally, socially, and economically sustainable.
President Hoyer contributed to the discussion on behalf of the EIB. In addition, in a complementary panel Vice President Ambroise Fayolle presented the progress of the EIB on the European Fund for Strategic Investments and discuss financing models which help to catalyse the much-needed investment in infrastructure.
History of the Forum :
At the Financing for Development conference in Addis Ababa in 2015, 193 nations agreed to establish a forum on infrastructure to build and enhance multilateral collaborative mechanisms to better align coordination among the full suite of infrastructure actors, including the private sector.
Download the statement of the chairman
(Port of Ventspils, Latvia)
The Jacques Delors Institute has carried out a report on the Juncker Plan. Based on the Plan’s preliminary results, experts’ opinions, experiences with similar instruments and two case studies, this report identifies various short-term implementation risks that can threaten the success of the Plan within its initial three-year period and formulates policy recommendations to address such risks.
The main conclusion is that the Plan will not be sufficient to close the current EU investment gap – and therefore should be complemented by other actions to boost investment. The success of the Juncker Plan might be also threatened in the absence of certain conditions.
The Report also analyses possible long-term scenarios; in particular, the possibility that EFSI leads to the establishment of a system of public investment banks in Europe and the possibility that it becomes the seed of a future euro area macro-economic stabilization capacity.
Finally, the Report provides a more on-the-ground analysis of the possible contributions of the Juncker Plan in two major areas: digital infrastructure and energy efficiency. The two case studies stress the need to deliver on the third pillar of the Plan by improving EU and national regulatory frameworks in order to remove non-financial barriers to investment. In both areas there is a concrete risk of geographical concentration but evidence also point out that EFSI can serve to help structure and finance small-sized and high-risk investment projects.
This report was written by Eulalia Rubio, David Rinaldi and Thomas Pellerin-Carlin, respectively senior research fellow ans research fellows at the Jacques Delors Institute and foreworded by Enrico Letta, vice-president of the Jacques Delors Institute, analyses the strengths and weaknesses of the Juncker Plan.
See the report
The European Commission proposed an amendment to EU prudential rules, known as Solvency II, as part of the CMU Action Plan launched on 30 September 2015. This amendment to a delegated act under Solvency II was published today in the Official Journal and enters into force tomorrow, 2 April 2016.
Investment in infrastructure projects is essential to support economic activity and growth in Europe. By removing the challenge to investment experienced by insurance companies, the measures coming into force today will mobilise private sector investment, which is a key objective of the Investment Plan for Europe. The insurance industry is well-equipped to provide long-term finance by investing in equity shares as well as loans of infrastructure projects, but currently less than 1% of their total assets are allocated for this purpose. As a result of this change to Solvency II, insurers will have to allocate less capital and find it more attractive to increase investment and play a bigger role in European infrastructure projects.
Jonathan Hill, Commissioner for Financial Services, Financial Stability and Capital Markets Union, said: “One of the goals of the CMU is to promote growth and jobs by knocking down barriers to investment. Insurers told us that some of the Solvency II rules were putting them off investing in infrastructure. We have listened to what they said – as from today they will find it easier and more attractive to invest in European infrastructure projects. I hope they will take advantage of this change.”
Ringaskiddy Port Redevelopment project, Ireland
The Board of Directors of the European Investment Bank approved EUR 4.7 billion of new loans for twenty-five projects across Europe and around the world. More than half of the new long-term loans, expected to be signed in the coming months, will improve access to finance by small business in Italy, Spain, Finland, Egypt and Lebanon.
The EIB also approved new financing for the first European industrial plant to recycle and re-melt aviation-grade scrap titanium metal and titanium alloys that will prevent the need to export titanium for recycling outside of Europe; support to expand modernised milk production activities in Normandy; and reinforcement of the transmission network serving the north of Scotland to connect future wind, wave and tidal generation sites to the onshore transmission network.
Mr. Angel Gurría, Secretary-General of the OECD, was in Shanghai on 26-27 February 2016 to attend the G20 Finance Ministers and Central Bank Governors meeting. He called for more infrastructure investment and estimated that a total of USD 93 trillion in transport, energy and water would be needed in the next 15 years to meet global infrastructure needs while ensuring the transition to a low-carbon economy.
Since the 2008 financial crisis and the increasingly short supply of long-term capital, the OECD has been very active on the issue of long-term investment. In 2012 was launched the “OECD project on institutional investors and long-term investment“. This project aims to facilitate long-term investment by institutional investors such as pension funds, insurance companies, and sovereign wealth funds, addressing both potential regulatory obstacles and market failures.
On February 24, MEP Burkhard BALZ, member of the Bureau of the Long-term Investment and Reindustrialisation Intergroup, and ten MEPs from the Committee on Economic and Monetary Affairs (including ECON Chairman Roberto GUALTIERI, the group coordinators and Rapporteurs for CRR) wrote to Commissioner HILL to call for the extension of the lower capital requirements that credit institutions and investment firms benefit from when exposed to credit risk for SMEs.
“The SME supporting factor” is a tool which has proved already very useful to tackle the difficulties SMEs face regarding to financing. At a dire time for the European economy, it is essential to make it easier for 99.8 % of the European companies to finance their development and create jobs.
Click on the link to download the letter
Brussels, 22 February 2016
The Covered Bond Label Foundation (CBLF) is delighted to announce that SG Société de Crédit Foncier (SG SCF) & SG Société de Financement de l’Habitat (SG SFH) in France, and Caja Rural de Castilla La Mancha (CRCLM), a new labelled covered bond issuer from Spain, have become the first European issuers to publish their Harmonised Transparency Template (HTT) under the Covered Bond Label Initiative. By joining the Label and disclosing the HTT, these institutions have demonstrated their commitment to enhanced transparency towards both regulators and investors.
These publications follow the introduction of the Harmonised Transparency Template, a new system to disclose cover pool information in a standardised way from all covered bond jurisdictions, by the Covered Bond Label Foundation. From the 1st of January 2016 onwards, with a phase-in period of one year, all labelled issuers will have to comply with the requirements of the 2016 Covered Bond Label Convention (available here), which entails publishing the HTT in order to disclose the data.
“The Covered Bond Label is a concrete market-led initiative towards convergence in covered bond market best practices, and the HTT is a central tool for facilitating investors’ due diligence. The publication of the first European HTTs represents a significant achievement in terms of enhancing transparency even further.”
Luca Bertalot, Covered Bond Label Foundation (CBLF) Administrator
The HTT plays a pivotal role in the Covered Bond Label’s efforts to keep pace with current and prepare for future regulatory requirements. It will allow for cross-border comparison of data in a centralised way in a comparable format. It covers liability, regulatory and asset transparency, on which the Covered Bond Label is founded, offering a complete set of data directly linking every covered bond to the legislative framework under which it is issued and to the cover pool assets.
Information on all the Covered Bond Label issuers as well as more information on the Covered Bond Label itself can be found on the Label website: www.coveredbondlabel.com.
The Commission, in partnership with the European Investment Bank (EIB), explains how to best combine the funds.
A brochure published today is designed to help local authorities and project promoters make full use of the opportunities of combining the EFSI and ESI Funds.
Vice-President of the European Investment Bank, Ambroise Fayolle, said: “Bringing together European structural and investment funds with the EFSI will allow the EIB to support sustainable growth throughout European countries and regions. By combining EU grants and EIB financing the bank can reach out to new beneficiaries, in particular smaller projects regrouped in investment platforms.”
The brochure provides an overview of the possible combinations of EFSI and ESI Funds, either at project level or through a financial instrument such as an investment platform. It will be enriched with the experience drawn from concrete cases and feedback received from stakeholders.