The EU Investment Plan
Creating jobs and stimulating economic growth is one of the European Commission’s top priorities and a major plan launched in 2014 is now doing exactly that through smart investment.
The Investment Plan for Europe aims to generate at least €315 billion of funding for projects in key strategic areas to get more people back to work.
Under the plan, major investors have better access to viable projects throughout Europe and it’s now easier for SMEs, local authorities, universities and individuals to source finance for innovative ventures.
The plan is already showing results, with around €50 billion of investment triggered during 2015, and dozens of Irish SMEs, start-up businesses and local authorities are set to benefit from the initiative.
There’s plenty of great ideas that can create employment and generate growth in the European Union, but sourcing finance to get them off the ground can be a problem.
That’s because the EU has been suffering from low levels of investment since the global economic crisis and the Investment Plan is designed to reverse this downward trend.
New regulations have been put in place to give legal support to the Plan and create an investment friendly environment by improving framework conditions and removing unnecessary red-tape for investors and entrepreneurs with good ideas.
The EFSI supports strategic, smart investments in key areas most likely to stimulate growth and generate employment like sustainable energy, transport, broadband, education, research and innovation.
The fund is a basically a €16 billion guarantee from the EU budget that’s further boosted by €5 billion from the EIB’s own capital.
It has its own dedicated governance structure to ensure that EFSI investments are fully focused on addressing the market failure in risk-taking, which hinders investment in Europe.
The European Commission estimates that the Investment Plan could add between €330 and €410 billion to EU GDP and create up to 1.3 million jobs.
The Investment Plan creates new opportunities to bring together institutional investors, from both the EU and around the world, and project promoters with innovative ideas that need financial backing.
These opportunities include the European Investment Project Portal (EIPP) where promoters can easily register projects that cost at least €10 million and fall under pre-determined sectors likely to generate growth.
The projects are put together on an online centralised platform of viable investment opportunities that can be accessed by a large network of international investors.
Projects that may be eligible for financing can be assisted through the European Investment Advisory Hub (EIAH), created through a partnership between the EIB and the European Commission.
The Hub helps promoters, public authorities and private companies including SMEs to get projects off the ground by providing technical support, advice and assistance programmes.
There’s plenty of support for Irish SMEs, local authorities or research institutions that want to benefit from the Investment Plan’s financial instruments.
Major infrastructure projects that require funding over €25 million can contact the EIB directly while those costing less may need to be grouped in co-investment platforms (from framework loans to dedicated funds) in order to be presented.
SMEs looking to finance smaller projects covered by the Investment Plan’s remit do so through the European Investment Fund - a special EIB subsidiary that offers targeted financial products.
SMEs that need more than €7 million can contact the EIF directly, while less expensive projects can be helped by specially appointed financial intermediaries here in Ireland.
Irish companies seeking private investors for their projects need to do so through the European Investment Project Portal. To qualify, projects must be worth at least €10 million, be expected to start within three years and be promoted by a public or private legal entity established in an EU Member State.
Public and private promoters can get technical assistance for their projects from the European Investment Advisory Hub where support for all levels of project cycle is available.
Benefits for Ireland
Ireland is already benefitting from the Investment Plan for Europe as a major project to build 14 primary health care centres around the country was one of the first to receive pre-financing.
The EIB and the EIF agreed to fund up to €70 million of construction costs for the centres, which will create thousands of construction jobs as well as numerous training and apprenticeship opportunities.
When completed the care centres will bring improved health services to an estimated 100,000 Irish citizens.
Another major project in line for significant financial backing is the relocation of port operations in Cork from Tivoli and the city docks to Ringaskiddy by 2018.
An agreement between the EIF and Bank of Ireland to fund Irish projects that meet Investment Plan criteria has also been signed while EIF financing under the EFSI amounts to €10 million and is expected to trigger €140 million in investments and benefit 50 SMEs and start-ups.
Micro-loans and loans are available for entrepreneurs in Ireland looking for finance. EIF intermediaries here are Microfinance Ireland, Allied Irish Banks (AIB) and Bank of Ireland.
The European Commission has published a brochure designed to help local authorities and project promoters make full use of the opportunities of combining the EFSI and ESI Funds.
There’s also lots of information available for anybody looking to find out more about Investment Plan for Europe.