Origins and Nature of the Fund

The European Fund For Strategic Investments (EFSI) was initiated in November 2014 as part of the Investment Plan for Europe by the European Commission and the European Investment Bank (EIB). Its original aim was to dispel the lingering economic weakness from the 2008 financial crisis and bring back fluency to the lending market.

This was to be achieved by prioritising SMEs whose access to funds would be limited given the nature of their projects. Projects that add value to a city or region rather than solely focusing on the profit aspect were given priority. However, these projects typically carry a higher risk profile than other EIB projects and are termed “Special Activities.”

The EFSI provides finance through private banks and funds, so in its essence it operates in the venture capital end of the lending market. Its main shareholder is the EIB, the European Commission and 30 privately owned EU financial institutions.

Its facility to accept higher risk is underwritten by a guarantee from the EU budget and the EIB’s own resources. The €16bn guarantee from the EU and €5bn of EIB resources has sparked €315bn from investors for strategic projects across Europe in its first phase.

Fund Focus

The EFSI focuses on areas such as strategic infrastructure, including digital, transport and energy, education, research, development and innovation and the expansion of renewable energy and resource efficiency.

Focus on Sustainability

The EFSI is intended to focus more on sustainable investments that enable economies to transition to a resource efficient, circular and zero-carbon environment.

Extended Until 2020

In early 2017, the EIB approved €7.8bn of new funding to support investment in strategic infrastructure, innovation and more efficient energy usage. It also approved €3.1bn of new investment intended for SMEs. Given the 15 fold multiplier effect on the initial €21bn, this represents a significant opportunity for investors.

With its expansion, availability of funds to non-EU countries has also become one of the main objectives of the EFSI. “Close cooperation with civil society helps increase the EIB Group’s impact. It helps us work better. It reflects our responsibilities as a publicly owned bank,” said Werner Hoyer, President of the EIB.

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