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Investment needs

The Initiative, together with other financial instruments, is an important building block for the Connecting Europe Facility proposed for the transport, energy and telecommunication sectors in the Multi-annual Financial Framework 2014-2020.

Europe faces enormous infrastructure investment needs in transport, energy and broadband networks. They are estimated to be of EUR 1.5 trillion to EUR 2 trillion to meet the policy goals of the Europe 2020 Strategy for smart, sustainable and inclusive growth. The analysis carried out by the Commission services in preparation of the Connecting Europe Facility Regulation have shown that while the capital markets, the banking sector as well as national budgets are expected to play a major role in delivering the required infrastructures through appropriate investment and pricing mechanisms, some investments in infrastructure will not take place or will be delayed far beyond 2020, if the EU does not take action.

Therefore, there is a need for a significant contribution from the EU budget in the next Multi-Annual financial framework to ensure that EU infrastructure priorities are actually delivered. Whilst Europe's energy system would require investments of ca. EUR 1 trillion by 2020, it is estimated that about EUR 200 billion of this investment is needed for electricity and gas networks of European importance alone. EUR 100 billion of this investment should be delivered by the market unaided, whereas the other EUR 100 billion will require public action to leverage the necessary investments.

The total cost of EU infrastructure development to match the demand for transport has been estimated at over EUR 1.5 trillion for 2010-2030 for the entire transport networks of the EU Member States. The completion of the trans-European transport networks alone requires about EUR 500 billion by 2020, of which EUR 250 billion would be needed to complete missing links and remove bottlenecks on the core network.

In September 2010, the Commission outlined the steps needed to trigger up to EUR 270 billion of investment required to bring ultra-fast broadband to all European households and businesses by 2020. In the current scenario a part of these investment needs will be met by the private sector. However, in the absence of Union intervention, private sector investment is expected to be at most EUR 50 billion for the period until 2020. This results in an investment gap of up to EUR 220 billion. As the social benefits from investment in digital infrastructures by far exceeds the private incentive for investment, focused public intervention is necessary to stimulate the market.

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