COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Working together for jobs and growth: The role of National Promotional Banks (NPBs) in supporting the Investment Plan for Europe
Date: 2015-07-22
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU investment, EU programme, State aid, economic growth, fund (EU), job creation, private investment, public investment, stability pact

EUROPEAN 
COMMISSION 

Brussels, 22.7.2015  
COM(2015) 361 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND THE COUNCIL 

Working together for jobs and growth: The role of National Promotional Banks (NPBs) 
in supporting the Investment Plan for Europe 

EN 

   EN 

 
 
 
 
  
 
Working together for jobs and growth: The role of National 
Promotional Banks (NPBs) in supporting the Investment Plan for 
Europe 

1. Introduction: Key role of NPBs in the implementation of the 
Investment Plan for Europe 

On  26  November  2014,  the  Commission  launched  its  Investment  Plan  for  Europe1,  a 
coordinated  and  comprehensive  effort  to  mobilise  at  least  EUR  315  billion  in  additional 
public and private investment into the real economy in three years. While implementation of 
the plan relies mainly on the Commission and EIB working together as strategic partners, an 
effective  involvement  of  National  Promotional  Banks  (NPBs)  is  necessary  to  enhance  its 
impact  on  investment,  growth  and  employment  due  to  their  particular  expertise  and  their 
knowledge  of  the  local  context,  business  and  investor  communities  as  well  as  national 
policies and strategies. Member States that do not yet have an NPB may consider setting one 
up. In addition, investment platforms can play a key role in pooling the resources of the EIB, 
NPBs and private investors. This communication gives guidance and provides clarity on how 
best to set up such banks and platforms. 

To date, eight NPBs (from Bulgaria, France, Germany, Italy, Luxembourg, Poland, Slovakia 
and Spain) have committed to provide co-financing to projects and investment platforms, for 
a total financing volume of up to EUR 34 billion.  

NPBs  play  an  important  role  in  catalysing  long-term  finance.  In  recent  years,  they  have 
stepped  up  their  activities,  aiming  to  counterbalance  the  necessary  deleveraging  process  in 
the  commercial  banking  sector.  They  also  play  an  important  role  in  implementing  EU 
financial instruments beyond the scope of the Investment Plan. A number of Member States 
that did not have an NPB before have decided to establish one, while others are considering 
setting up a new NPB. 

During  the  consultation  on  the  Green  Paper  on  long-term  financing  of  the  European 
economy2,  calls  were  made  for  better  exploiting  the  synergies  between  the  EU  budget,  the 
European  Investment  Bank  (EIB)  Group  and  NPBs  in  policy  areas  such  as  climate  change, 
environment, innovation and social and human capital development. Given the urgent need to 
boost investment and the limited fiscal space available on average in Europe, an optimal use 
of public resources is needed more than ever. A smarter use of public resources, in order to 
crowd-in  private  actors,  is  at  the  heart  of  the  Investment  Plan  for  Europe.  Enhanced 
cooperation between NPB’s on the one hand and the Commission and the EIB Group on the 
other is therefore a key condition for the success of the Plan. This is also clearly reflected in 

1 Communication from the Commission to the European Parliament, the Council, the European Central Bank, 
the European Economic And Social Committee, the Committee Of The Regions and the European Investment 
Bank – An Investment Plan for Europe, COM(2014)903 final, published on 26 November 2014 
2 See Communication from the Commission to the European Parliament and the Council on Long-Term 
Financing of the European Economy, COM(2014)168 final,  published on 27 March 2014  

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the regulation on the European Fund for Strategic Investments (EFSI)3, which establishes the 
legal basis for the first strand of the Investment Plan.  

Against  this  backdrop,  the  present  Communication  provides  guidance  to  Member  States 
intending to set up a new NPB, building on best practices. In addition, it sets out a number of 
key principles for the collaboration of NPBs with the EIB Group and the Commission as well 
as amongst each other in the context of the Investment Plan, in particular through investment 
platforms. It also clarifies the way contributions from NPBs to investment platforms should 
be accounted for, and the procedure regarding the State aid component of the co-financing. 

2. Setting up NPBs 

2.1 Rationale for setting up NPBs 

For purposes of this Communication, NPBs are defined as legal entities carrying out financial 
activities on a professional basis which are given a mandate by a Member State or a Member 
State’s  entity  at  central,  regional  or  local  level,  to  carry  out  development  or  promotional 
activities, as set out in Article 2(3) of the EFSI Regulation. This definition comprises NPBs 
in very different forms, distinctive promotional products being offered according to country-
specific needs. It remains up to individual Member States to decide whether an NPB should 
be established, as well as on its shape and form. 

The principal economic rationale for a promotional bank is that market failures may lead to 
less  investment  and,  thus,  slower  future  growth  than  would  be  economically  efficient,  and 
that an institution with a public mandate is better placed than private operators to overcome 
these market failures.  

Market  failures  can  be  the  result  of  (i)  asymmetric  information,  (ii)  externalities  and  (iii) 
market  power  (weak  competition).  They  affect  both  the  demand  and  supply  of  investment. 
Typical examples include (i) credit rationing and high return requirements due to banks' high 
transaction  costs  for  identifying  viable  investment  projects  (e.g.  in  the  SME  sector),  (ii) 
underinvestment  in  areas  such  as  research  &  development,  infrastructure,  education  and 
environmental projects, where the benefits of investments can accrue also to competitors and 
(iii)  under-supply  of  financial  services  resulting from  market  concentration  due  to  mergers, 
exits of competitors or other impediments to effective competition. A specific externality in 
the EU context lies in the enhanced market integration fostered by cross-border projects.  

Some of these market failures can be addressed by promotional banks or other intervention 
mechanisms. For example, a promotional bank can improve the supply of investment finance 
in  areas  affected  by  market  failures.  By  contrast,  structural  policies  are  better  placed  to 
enhance  the  universe  of  profitable  projects  (e.g.  by  improving  legal  certainty,  streamlining 
administrative  procedures,  lowering  factor  costs,  etc.).  This  is  why  the  regulatory  and 
structural reform agenda forms an integral part of the Investment Plan. Establishing an NPB 
is not a substitute for necessary reforms.  

3 Regulation (EU) 2015/1017 of the European Parliament and of the Council of 25 June 2015 on the European 
Fund for Strategic Investments, the European Investment Advisory Hub and the European Investment Project 
Portal and amending Regulations (EU) No 1291/2013 and (EU) No 1316/2013 – the European Fund for 
Strategic Investments (OJ L 169, 01.07.2015, p. 1). 

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A variety of public institutions are active at national level. Among the largest, Kreditanstalt 
für Wiederaufbau (KfW, Germany), Bpifrance (France), Caisse des Dépôts et Consignations 
(CDC,  France),  Cassa  Depositi  e  Prestiti  (CDP,  Italy),  Instituto  de  Crédito  Oficial  (ICO, 
Spain)  and  the  recently-created  Green  Investment  Bank  and  British  Business  Bank  (United 
Kingdom) provide financing to key sectors and invest in projects in innovative, environment-
friendly  and  social  areas  where  market  failures  have  been  identified.  Portugal,  Ireland, 
Greece and Latvia have also recently established NPBs.  

2.2 Guiding principles for setting up NPBs 

NPBs, by correcting market failures, can play a welfare enhancing role, but proper policies 
need  to  be  put  in  place  to  ensure  that  possible  negative  side  effects  of  NPB  action  do  not 
materialize, for instance: 

•  Losses to the guarantor governments stemming from substandard underwriting; 

•  Misallocation of investments due to political interference; 

•  Maintaining  inefficient  market  structures,  sectors  with  overcapacity  or  supporting 

undertakings in difficulty; 

•  Crowding out of private sector financiers, thus holding back financial sector development. 

The  legal  and  regulatory  framework  for  NPBs,  as  well  as  their  governance  structures,  is 
crucial  to  guard  against  these  risks  and  to  ensure  maximum  benefits  coming  from  NPBs.4 
National,  regional  and  local  legislation,  as  well  as  NPBs'  statutes  should  thus  take  into 
consideration the existing best practices: 

•  The NPB statutes usually stipulate clearly that the bank will focus its operations on sectors 
where market failures are pervasive and which are thus underserved by commercial banks 
or  other  private  finance  providers.  Moreover,  with  respect  to  the  level  of  the  investee 
companies,  a  level-playing  field  should  be  ensured,  in particular in markets  where  state-
owned  enterprises  and  private  sector  companies  compete  in  order  to  avoid  market 
distortions.  

•  To avoid market distortions the need for the intervention for any newly-created NPB, or 
new  area  of  intervention  or  new  financial  instrument  should  be  justified,  helped  by  e  an 
independent  ex-ante  assessment  of  the  market  failure  to  be  addressed  by  the  NPB,  its 
relative  effectiveness  and  efficiency,  the  market  interaction  between  existing  financing 
channels (both private and public) and the financial instruments to be adopted by the NPB. 
Indeed,  particular  consideration  can  also  be  given  to  the  need  of  streamlining  activities, 
avoiding  overlaps  with  financing  alternatives  and  managing  interfaces  with  existing 
support schemes. Independent ex-post evaluation helps verifying the ex-ante assessment of 
the  initiative's  value-added.  When  operating  in  markets  already  served  by  commercial 
banks, it proves to help maintaining a level playing field in the financial markets when the 
NPB distributes its products indirectly through the commercial banking sector. Such close 
interaction with the private sector can enable the NPB not only to align its product range 
with  the  existing  market  gaps,  but  also  to  give  a  positive  signalling  effect  about  the 

4 See OECD “Guidelines on Corporate Governance of State-owned Enterprises”, 2005. 

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bankability  of  types  of  projects  that  are  outside  the  traditional  investment  policies  of 
banks,  and  thereby  catalyse  private  finance  in  its  areas  of  activity  without  crowding  out 
private-sector  activity.  In  this  way,  it  can  be  ensured  that  on-lending  commercial  banks 
pass on all the benefits to the final beneficiary in the real economy. 

•  NPBs  prove  to  work  best  where  they  focus  on  economically  viable  projects  and  operate 
with  sufficient  profitability  (albeit  below  private  operators'  cost  of  equity)  to  maintain 
financial soundness without continued capital injections by the government (profits mostly 
being  retained  to  bolster  future  lending  capacity).  High  standards  of  transparency  and 
accountability  are  important  for  NPBs'  reputation  in  the  market,  as  well  as  professional 
management and the necessary degree of independence. Prudential supervision exercised 
independently by a separate entity further strengthens this reputation. 

•  Strategic  guidance  and  monitoring  of  management  by  NPB  boards  requires  authority, 
competencies,  integrity,  accountability  and  objectivity.  Separation  between  board 
membership  and  executive  management  strengthens  the  oversight  function  of  the  board. 
While  the  promotional  activities  of  an  NPB  are  usually  subject  to  approval  by  the 
supervisory board and as such allow for a link to the government through its presence on 
the board, the operational or banking part of an NPB is left to professional management 
and remains free from political interference. 

•  Sound risk management and internal control procedures prevent NPB boards from taking 

hazardous financial and organisational decisions.  

New NPBs can benefit from the experience of established peers in a variety of ways to help 
them  meet  the  above  objectives.  Several  recently-created  NPBs,  such  as  the  Portuguese 
Development Financial Institution and Ireland's SBCI relied on ad hoc bilateral cooperation 
with fellow NPBs.  

In addition, the EIB and NPBs should be prepared to make available the expertise of the new 
European Investment Advisory Hub (EIAH) to share knowledge and best practices in areas 
within  the  scope  of  the  EIAH's  activities.  NPBs  can  also  make  use  of  the  EIAH  as  a  local 
entry  point  for  potential  clients  and  stakeholders  to  accelerate  project  development.  Finally 
the EIB and NPBs should be prepared to exchange staff on a temporary basis, which can be 
another valuable tool to build know-how within a newly-created NPB.5 

2.3 State aid compatibility 

NPBs  are  in  most  cases  financed  and  supported  by  the  State,  which  is  a  competitive 
advantage  over  private  market  participants.  Their  resources  therefore  constitute  State 
resources in the meaning of Article 107(1) TFEU6 and their interventions qualify as State aid 
if all the other criteria of Art. 107(1) are met. As set out above, NPBs' fundamental economic 
rationale should lie in their ability to provide financing in areas where market failures lead to 
an  undersupply  of  finance  by  private  operators,  or  where  the  private  market  would  not 
intervene  at  all.  EU  State  aid  rules  are  based  on  the  same  principle.  They  are  designed  to 

5 These measures were agreed by a joint working group of EIB and NPBs with the participation of the 
Commission in preparation if the Investment Plan for Europe. 
6 The classification of NPBs under national accounts (sections 2.4 and 3.3 below) is not relevant for Article 
107(1) TFEU. 

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ensure that the interventions of NPBs are well-targeted to remedy market failures and thereby 
contribute  to  economic  and  financial  development,  while  at  the  same  time  not  distorting 
markets,  crowding  out  private  operators  or  keeping  companies  alive  that  would  otherwise 
have exited the market.  

Concerning the establishment, the remit and capitalisation of new NPBs, the recent decisional 
practice by the Commission sets out how the Commission assesses compatibility with State 
aid rules. Recent cases include the UK's Green Investment Bank7, the British Business Bank8, 
the  Portuguese  Development  Financial  Institution9,  and  the  Latvian  Single  Development 
Institution.10  In  those  decisions,  great  emphasis  was  placed  on  the  need  to  ensure  that  the 
NPBs in question will focus their operations on sectors where market failures are pervasive 
and  which  are  thus  underserved  by  commercial  finance  providers,  typically  banks,  thereby 
avoiding that those NPBs' lending policy would crowd out private investment. 

The  participation  in  centrally-managed  EU  Financial  Instruments  was  considered  by  the 
Commission to fall into the scope of activities of NPBs. For instance the remit of the British 
Business  Bank  involves  participation  in  centrally-managed  EU  Financial  Instruments  or 
programmes  implemented  by  the  EIB  Group.  The  Latvian  Single  Development  Institution 
will also act as a financial intermediary by channelling co-funded programmes and projects 
of  international  financial  institutions,  such  as  the  EIB  Group,  the  European  Bank  for 
Reconstruction and Development (EBRD), or other national development banks, such as the 
Kreditanstalt für Wiederaufbau (KfW), in line with State aid rules.  

The reforms introduced by the recent State Aid Modernisation facilitates the treatment of aid 
which  is  well-designed,  targeted  at  identified  market  failures  and  objectives  of  common 
interest,  and  least  distortive  ("good  aid").11  Thus,  in  the  Commission's  recent  decisions  on 
State  aid  to  NPBs,  a  detailed  ex  ante  economic  analysis  of  market  failures  was  no  longer 
deemed necessary for those activities which are in line with the de minimis regulations12, fall 
within a block exemption regulation13 or are State aid measures approved under specific State 
aid guidelines. For other activities an ex ante study on market failures showed the need for 
intervention. Certainly, NPBs should also comply with the applicable State aid rules applying 
to final beneficiaries. For example, undertakings in difficulty should not be subsidised unless 
where explicitly allowed, e.g. in line with the Rescue and Restructuring Guidelines.14  In its 

7 SA.33984 (2012/N), OJ C 370, 30.11.2012, p. 2. 
8 SA.36061 (2014/N), OJ C 460, 19.12.2014, p. 1. 
9 SA.37824 (2014/N), OJ C 5, 9.1.2015, p. 1. 
10 SA.36904 (2014/N), not yet published.  
11 Communication from the Commission: "EU State Aid Modernisation (SAM)", COM/2012/0209 final, 
8.12.2012. With further information available at: 
http://ec.europa.eu/competition/state_aid/modernisation/index_en.html 
12 Commission Regulation (EU) No 1407/2013 on the application of Articles 107 and 108 of the Treaty on the 
Functioning  of  the  European  Union  to  de  minimis  aid,  OJ  L  352,  24.12.2013,  p.  1;  Commission  Regulation 
(EU) No 1408/2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European 
Union to de minimis aid in the agricultural sector, OJ L 352, 24.12.2013, p. 9; Commission Regulation (EC) No 
717/2014 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union on 
de minimis aid in the fishery and acquaculture sector, OJ L 190, 28.6.2014, p. 45. 
13  Commission  Regulation  (EU)  No  651/2014  of  17  June  2014  declaring  certain  categories  of  aid  compatible 
with  the  internal  market  in  application  of  Articles  107  and  108  of  the  Treaty,  OJ  L  187,  26.06.2014,  p.  1, 
Commission regulation (EU) No 702/2014 of 25 June 2014 declaring certain categories of aid in the agricultural 
and forestry sectors and in rural areas compatible with the internal market in application of Articles 107 and 108 
of the Treaty on the Functioning of the European Union, OJ L 193, 1.7.2014, p. 1. 
14 OJ C 249, 31.7.2014, p. 1. 

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decisions,  the  Commission  noted  positively  when  NPBs  intervene  indirectly  via  financial 
intermediaries  to  reduce  risks  of  crowding  out  and  discrimination  of  private  finance 
providers, while the benefits of the aid should fully reach the final beneficiary. 

In the Commission's recent decisional practice, market-based pricing policies were permitted 
typically  in  line  with  the  Guarantee  Notice15,  the  Reference  Rate  Communication16  or 
following the principles of pari passu investments, to avoid market distortions. In the case of 
the British Business Bank, for example, the investee company should show to that NPB that 
it  has  not  been  able  to  find  financing  on  the  market.  Commercial  activities  by  NPBs  are 
however separated from their promotional activities in order to avoid cross-subsidisation.  

The Commission's recent approval decisions foresee a review clause after four to seven years. 
Such  a  reassessment  of  the  market  failures  and  the  remit  of  the  newly  created  NPB  is 
necessary to take account of economic development and the evolutions of the market and, by 
the same token, the evolution of market failures. On request by the Member State concerned, 
a review is also possible earlier; for instance, the initial scope of activities of the UK Green 
Investment Bank was extended in order to allow for investments in sectors additional to its 
initially  approved  remit  as  well  as  additional  funding.17  Similarly,  the  decision  on  the 
Portuguese  Development  Finance  Institution  indicates  that  the  Portuguese  Government 
intends  to  extend  the  remit  of  the  Institution  to  on-lending  activities  funded  by  multilateral 
financial institutions and other NPBs. 

The Commission has also clarified, in its decision on the British Business Bank, that the mere 
regrouping of existing entities and/or ongoing activities, without additional capital or public 
funding to the resulting entity, is considered an internal administrative reorganisation of the 
Member State and is therefore not subject to notification.  

Member States intending to set up a new NPB are invited to contact the Commission early on 
in their plans so as to facilitate the compliance with State aid rules in view of the standstill 
obligation laid down in Article 108 TFEU. 

2.4 Statistical treatment of NPB lending and borrowing inside or outside the 
general government under the Stability and Growth Pact (SGP) 

Lending and borrowing by NPBs meeting the guiding principles set out in sections 2.1 to 2.3 
above  is  generally  accounted  for  outside  the  general  government  statistics  because  lending 
decisions  are  taken  at  arm's  length  from  the  government  and  the  members  of  the  NPB's 
governing  bodies  are  independent  from  the  government.  NPB  operations  meeting  these 
requirements  thus  fall  outside  the  scope  of  the  EU  Stability  and  Growth  Pact,  under  these 
conditions. 

If,  to  the  contrary,  financing  decisions  require  government  endorsement  or  the  members  of 
the relevant governing bodies (e.g. the Board) are government officials or otherwise act under 
the guidance of the government, the NPB becomes a captive financial institution and must be 
included in the government sector in national accounts. Detailed guidance on the accounting 
treatment  of  NPBs  is  provided  by  Eurostat's  European  System  of  National  and  Regional 

15 OJ C 155, 20.6.2008, p. 10. 
16 OJ C 14, 19.1.2008, p. 6. 
17 SA.37554, OJ C 210, 4.7.2014, p. 1. 

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Accounts (ESA 2010)18, the Manual on Government Deficit and Debt on the implementation 
of ESA 201019 and specific advice to Member States20. 

3. NPB cooperation and the role of investment platforms in the 
context of the Investment Plan for Europe 

BOX 1: 

To date, eight countries have announced that they will participate in the EFSI project via their NPBs (or similar 
institutions): Bulgaria, Slovakia, Poland, Luxembourg, France, Italy, Spain and Germany. At present, among the 
eight  NPBs  mentioned  below,  the  only  one  classified  inside  government  is  the  one  of  Luxembourg,  while 
classification is being discussed at present in the case of the two Slovak units, the Bulgarian unit, the Spanish 
unit and Bpifrance. 

In addition, the United Kingdom announced in July that it will  make guarantees available to co-finance EFSI 
infrastructure projects in the UK (€8,5(£6bn)). The UK contribution is not via an NPB. 

In detail, the amounts of the announced national contributions via National Promotional Banks are at present as 
follows: 

•  Bulgaria, June 2015, €100 million, Bulgarian Development Bank, 

•  Slovakia,  June  2015,  €400  million,  Slovenský  Investičný  Holding  and  Slovenská  Záručná  a  Rozvojová 

Banka, 

•  Poland, April 2015, €8 billion EUR, Bank Gospodarstwa Krajowego (BGK) and another public institution 

Polish Investments for Development (PIR), 

•  Luxembourg, April 2015, €80 million via Société Nationale de Crédit et d’Investissement (SNCI), 

•  France, March 2015, €8 billion via Caisse des Dépôts (CDC) and Bpifrance (BPI),  

• 

Italy, March 2015, €8 billion via Cassa Depositi e Prestiti (CDP),  

•  Spain, February 2015, €1.5 billion via Instituto de Crédito Oficial (ICO),  

•  Germany, February 2015, €8 billion via KfW. 

3.1 Cooperation between EIB and NPBs 

Due  to  their  complementary  product  ranges  and  geographic  reach,  NPBs  play  an  important 
role  in  the  implementation  of  the  Investment  Plan  for  Europe.  While  direct  participation  of 
NPBs  in  EFSI  is  allowed  under  the  EFSI  regulation,  so  far  NPB's  have  expressed  a  clear 
preference for cooperating at the level of investment platforms and on the level of individual 
projects. Furthermore, the EFSI regulation provides that NPB's are eligible for coverage by 
the EIB guarantee provided by EFSI under a counter guarantee of the EU Guarantee.  

18 http://ec.europa.eu/eurostat/documents/3859598/5925693/KS-02-13-269-EN.PDF 
19 http://ec.europa.eu/eurostat/documents/3859598/5937189/KS-GQ-14-010-EN.PDF/c1466fde-141c-418d-
b7f1-eb8d5765aa1d 
20 http://ec.europa.eu/eurostat/web/government-finance-statistics/methodology/advice-to-member-states 

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The  proposals  of  the  working  group  on  enhanced  cooperation  between  the  EIB  Group  and 
NPBs, which was set up at the request of the September 2014 EU Economic and Financial 
Affairs  Council  (Ecofin),  reflect  these  preferences.  While  calling  for  flexible  cooperation 
models,  the  group recognises the complementarities  between  the  EIB  and  NPBs,  where  the 
latter can bring particular value-added based on their knowledge of the local context, business 
and  investor  communities  as  well  as  national  policies  and  strategies.  Cooperation  can  take 
place  both  on  a  bilateral  and  multilateral  (e.g.  via  investment  platforms)  basis.  Leveraging 
private sector resources constitutes a key objective in both cases.  

Possible  financial  products  for  collaboration,  in  addition  to  co-financing  at  project  level, 
include, among others, risk-sharing products to provide cover for unsecured lending and other 
riskier  types  of  financing,  joint  securitisation  platforms,  venture  capital  funds,  and  other 
investment funds and platforms.  

Cooperation  on  advisory  services  and  staff  exchanges  should  complement  the  financial 
cooperation  to  disseminate  best  practices  across  all  institutions,  including  new  and  smaller 
NPBs. 

More synergies between the EIB and the NPBs could be achieved when co-financing in terms 
of  reducing  administrative  burden  and  achieving  more  standardisation.  That  could  lead  for 
example to a mutual recognition of due diligence procedures.  

3.2 Cooperation through investment platforms  

One  possible  way  to  foster  cooperation  between  NPBs  and  the  EIB  is  through  investment 
platforms. Investment platforms are in essence co-investment arrangements structured with a 
view  to  catalysing  investments  in  a  set  of  projects  (as  opposed  to  individual  projects). 
Investment  platforms  are  a  means  to  aggregate  investment  projects,  reduce  transaction  and 
information costs and provide for more efficient risk allocation between various investors. 

Investment platforms can be special purpose vehicles, managed accounts, contract-based co-
financing  or  risk  sharing  arrangements  or  arrangements  established  by  any  other  means  by 
which  entities  channel  a  financial  contribution  in  order  to  finance  a  number  of  investment 
projects. The scope of investment platforms may include national or sub-national platforms 
that  regroup  several  investment  projects  on  the  territory  of  a  given  Member  State,  multi-
country  or  regional  platforms,  that  regroup  partners  from  several  Member  States  or  third 
countries interested in projects in a given geographic area, or thematic platforms that gather 
investment projects in a given sector.  

Well-designed  platforms  have  the  potential  to  attract  investment  from  private  institutional 
investors, such as pension funds, and thus boost the impact of the public funds. 

A  number  of  multilateral  platforms,  such  as  the  Marguerite  infrastructure  fund21,  the 
European  Energy  Efficiency  Fund  (EEEF)22  and  the  European  Fund  for  Southeast  Europe 
(EFSE)23,  are  already  in  use  and  could  be  developed  further.  Each  of  these  funds  has  a 
number of core investors, including the EIB and NPBs such as CDC, KfW, CDP, ICO and 

21 http://www.marguerite.com/ 
22 http://www.eeef.lu/ 
23 http://www.efse.lu/ 

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PKO  Bank  Polski  SA.  These  are  complemented  to  varying  degrees  by  private  co-investors 
both at the fund level and at the level of individual projects supported by the platform. The 
platforms thus pool investments from a variety of sponsors to invest in a diversified portfolio 
of  projects  in  the  fund's  target  areas.  While  the  examples  mentioned  above  have  legal 
personality, investment platforms can also be implemented contractually via co-financing and 
risk-sharing agreements between the participants.  

With public institutions acting as anchor investors and independent management, investment 
platforms  have  the  potential  to  attract  investment  from  institutional  investors  and,  possibly, 
sovereign  wealth  funds  at  a  significant  scale.  Where  necessary,  credit  enhancement  can  be 
provided  from  EFSI  to  facilitate  the  entry  of  private  co-investors  by  mitigating  specific 
project or portfolio risks. 

Technical assistance for the creation of investment platforms could be made available via the 
EIAH. As per existing practice, NPBs and EIB are encouraged  to maximise synergies with 
EU policy objectives by collaborating with Commission services early in the process. 

3.3 Statistical treatment of platforms under the Stability and Growth Pact 
(SGP)  

The treatment of investment platforms under the Stability and Growth Pact (SGP) depends in 
the  first  place  on  the  statistical  classification  of  such  platforms  by  Eurostat.  The  statistical 
treatment, on or off the government's balance sheet, is governed by the same Eurostat rules as 
those pertaining to NPBs themselves (ESA 2010 and the ancillary documents cited in section 
2.4 above). Investment platforms with legal personality could be treated as Special Purpose 
Entities (SPEs) for this purpose.  

In  general  terms,  SPEs  are  classified  inside  government  if  they  are  established  by  the 
government and serve a government unit. In the case of an investment platform with multiple 
shareholders or sponsors, the platform's status depends on the entity or entities controlling it 
according to national accounts rules.  

Should  the  NPB  be  classified  inside  government  or  their  operations  rerouted  through 
government, the main issue becomes which is the entity setting up and controlling the SPE. 

Therefore,  in  situations  where  the  investors in  the  investment  platform  will  be  mainly  non-
captive  financial  institutions  and  private  investors,  and  where  no  government  exercises 
control  over  the  SPE  by  other  means,  the  SPE  will  most  likely  be  classified  outside  the 
government's accounts. Likewise, in cases where government (directly or through a captive 
financial institution controlled by government) is a minority investor and does not control the 
SPE  via  other  means,  the  SPE  typically  remains  off  that  (and  other)  government's  balance 
sheet.  

Finally,  where  the  SPE  is  jointly  controlled  by  a  group  of  NPBs  classified  outside 
government and not acting on instruction of government (and not by a single government), or 
by  private  entities  and/or  the  EIB  and  where  the  SPE  will  invest  in  different  countries 
thematically, it will most likely not be classified inside government. 

 10

 
At  the  time  of  the  adoption  of  the  EFSI  regulation,  the  Commission  issued  the  following 
statement on its assessment of one-off contributions within the context of the EFSI initiative 
for the purpose of implementing the Stability and Growth Pact:24 

"[W]ithout prejudice to the prerogatives of the Council in the implementation of the Stability 
and Growth Pact (SGP), one-off contributions by Member States, either by a Member State 
or by national promotional banks classified in the general government sector or acting on 
behalf of a Member State, into the EFSI or thematic or multi-country investment platforms 
established for the implementation of the Investment Plan, should in principle qualify as one-
off measures, within the meaning of Article 5 of Council Regulation (EC) No 1466/97[1] and 
Article 3 of Council Regulation (EC) No 1467/97[2]”  

Thus, Member State contributions to multilateral investment platforms should in general be 
considered  as  one-off  measures  in  the  sense  of  the  Stability  and  Growth  Pact,  in  line  with 
one-off classification principles. This interpretation is without prejudice to the provisions of 
the  budgetary  surveillance  under  the  Stability  and  Growth  Pact.  This  comes  in  addition  to 
their operational advantages, such as better portfolio diversification and economies of scale. 

3.4 State aid rules  

Beyond  the  general  principles  for  setting  up  NPBs  derived  from  the  decisional  practice  set 
out  in  section  2.3  above,  to  ensure  it  can  complete  its  task  of  State  aid  control,  the 
Commission has committed to put in place a fast-track process that will aim to complete the 
State  aid  compatibility  assessment  of  national  co-financing  of  projects  financed  by  the 
European  Fund  for  Strategic  Investments  within  six  weeks  of  receiving  the  complete 
notification from the relevant Member State. 

3.5 Creating synergies between EIB, NPBs and EU instruments 

The Commission is implementing an increasing share of EU budget funds through financial 
instruments, complementing the more traditional support via grants in order to maximise the 
impact of the public funds in the real economy. 

Examples of financial instruments, which combine EU budget funds with promotional bank 
lending,  include  SME  support  programmes  such  as  COSME  and  Horizon  2020  InnovFin, 
financial  instruments  under  the  Connecting  Europe  Facility,  Erasmus  +,  and  others.  These 
instruments have a track record of meeting their leverage targets for the public funds invested 
in them. NPBs could in the future play a greater role in their deployment. 

Under the EU's 2014-2020 multiannual financial framework (MFF), promotional institutions 
may complement national and regional administrations in allocating European Structural and 

24 See recital 10 of the EFSI regulation. 

[1] Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary 
positions and the surveillance and coordination of economic policies (OJ L 209, 2.8.1997, p. 1). 
[2] Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the 
excessive deficit procedure (OJ L 209, 2.8.1997, p. 6). 

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Investment  Funds  (ESIF),  including  financial  instruments  such  as  risk-sharing  instruments, 
(partial) loan guarantees, equity and mezzanine finance. The use of ESIF funds for providing 
credit or risk capital, rather than grants, has two principal advantages: First, it can generate 
leverage,  i.e.  each  euro  of  ESIF  funds  can  generate  multiple  euros  of  loans  or  equity 
financing and, secondly, the financial viability requirement ensures that scarce resources are 
allocated to efficient uses. The Commission has prepared a set of pre-defined, "off the shelf", 
financial  instruments  to  enable  a  wider  use  of  ESI  Funds  in  a  more  standardised  way. 
Managing  authorities  are  encouraged  to  tap  such  instruments  in  operational  programmes, 
relying on an expanding role of NPBs.  

In  addition,  the  Commission  is  working  on  concrete  technical  solutions  to  combine  EFSI 
financing with ESIF. Firstly, EFSI could provide support to financial instruments established 
at national or regional level, potentially in addition to support by ESIF. Secondly, ESIF could 
directly support project development and implementation (in line with the contributing ESIF 
programme rules and applicable eligibility criteria)25. Alternatively, ESIF programmes could 
contribute  to  an  Investment  Platform  –  with  resources  managed  together  but  expected  to 
cover  distinct  compartments  in  order  to  comply  with  ESIF  legal  provisions/in  order  to 
comply  with  Regulation  1303/2013.  In  such  case,  EIB/EIF,  with  EFSI  support,  would  be 
expected  to  contribute  to  the  Investment  Platform  whilst  the  ESIF  programme  contribution 
would come through a financial instrument. 

Finally, the EU's Financial Regulation26 has established the legal basis for NPBs to assume 
the  role  of  entrusted  entity  (like  the  EIB  or  EIF)  for  EU  centrally-managed  financial 
instruments. Such activity, however, can be carried out only insofar as the NPB is provided 
with  a  national  regulatory  framework  enabling  internationalisation  and  cross-border 
operations.  In  order  to  maintain  their  focus  on  addressing  market  failures,  NPBs  are 
encouraged to operate in consortia and engage in international co-financing operations. There 
is thus further scope for NPBs to expand their role in the implementation of both centrally-
managed EU programmes and ESIF. 

4. Conclusion 

A concerted effort drawing on the complementarities of the EIB, NPBs and private investors 
could achieve the Investment Plan's goal of mobilising at least EUR 315 billion in additional 
public  and  private  investment  into  the  real  economy  over  the  next  three  years.  The  above 
sections have made the case for a strong involvement, across all Member States, of NPBs in 
the Investment Plan. Member States that do not yet have an NPB may consider setting one 
up, based on the principles outlined above. In addition, investment platforms can play a key 
role  in  pooling  the  resources  of  the  EIB,  NPBs  and  private  investors.  NPBs  could  further 
strengthen their capabilities based on these best practices, which will enhance their ability to 
cooperate.  A  joint  working  group,  led  by  the  EIB  and  with  the  participation  of  the 
Commission, has already made valuable proposals, on joint investment platforms, knowledge 

25 Similar examples could be envisaged for the SME Window of EFSI which supports portfolios of SME 
finance. 
26 Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012  
on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, 
Euratom) No 1605/2002, OJ L 298, 26.10.2012, p. 1. 

 12

 
 
                                                            
exchange  and  advisory  work.  Over  time,  this  deepened  cooperation  could  evolve  into  an 
integrated system of public investment banks, which would be able to apply proven products 
and  best  practices  across  Member  States.  The  EFSI  evaluation  in  2017/18  will  provide  an 
opportunity to look into the development of cooperation between NPBs and the EIB as well 
as among NPBs. 

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Tentative Timeline 

4 July 2015: EFSI regulation enters into force 

By 1 October 2015: first EFSI guarantees have been extended to NPBs 

1 October 2015: First investment platforms established 

30 June 2018: Completion of EFSI investment programme 

After June 2018: EFSI evaluation, including role of and cooperation among NPBs 

 14