COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing the InvestEU Programme
Date: 2018-06-06
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU programme, capital market, competitiveness, database, digitisation, fund (EU), innovation, investment, single market, sustainable development

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 6.6.2018  SWD(2018) 314 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  establishing the InvestEU Programme  {COM(2018) 439 final} - {SEC(2018) 293 final} - {SWD(2018) 316 final}  
 
 
Table of Contents 

1 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT ............................................................... 1 

1.1 
1.2 
1.3 
1.4 

Scope and context ...................................................................................................................... 1 
Investment in a post-crisis economic environment ................................................................... 3 
Lessons learned from previous programmes ........................................................................... 12 
The way forward: a single investment support instrument ...................................................... 16 

2 

THE OBJECTIVES ............................................................................................................................ 16 

2.1 
2.2 
2.3 
2.4 

General objectives of InvestEU Programme ........................................................................... 16 
Specific objectives ................................................................................................................... 17 
Simplification .......................................................................................................................... 21 
Enhanced flexibility ................................................................................................................ 22 

3 

PROGRAMME STRUCTURE AND PRIORITIES ........................................................................... 23 

3.1 
InvestEU Fund structure .......................................................................................................... 27 
3.2  Member State compartments ................................................................................................... 28 
EU added value ....................................................................................................................... 30 
3.3 
Governance ............................................................................................................................. 30 
3.4 
Avoiding overlaps among policy windows ............................................................................. 34 
3.5 
Geographical distribution ........................................................................................................ 35 
3.6 

4 

TARGET ACTIONS, FINANCING PRODUCTS AND BENEFICIARIES ..................................... 36 

4.2 
4.3 

Related programmes under preparation ................................................................................... 41 
Blending and combinations ..................................................................................................... 42 

5 

DELIVERY MECHANISMS OF THE INTENDED FUNDING ...................................................... 43 

5.1 
5.2 
5.3 
5.4 

Single fund .............................................................................................................................. 43 
Single budgetary guarantee ..................................................................................................... 43 
Implementing partners ............................................................................................................. 44 
Technical assistance (InvestEU Advisory) .............................................................................. 46 

6 

HOW WILL PERFORMANCE BE MONITORED AND EVALUATED?....................................... 48 

ANNEX 1: PROCEDURAL INFORMATION ............................................................................................ 50 

ANNEX 2: STAKEHOLDER CONSULTATION ....................................................................................... 57 

ANNEX 3: EVALUATION RESULTS ....................................................................................................... 64 

ANNEX 4: SCOPING PAPERS ................................................................................................................... 80 

ANNEX 5: LIST OF FINANCIAL INSTRUMENTS AND EFSI UNDER THE CURRENT MFF ......... 121 

ANNEX 6: TECHNICAL ASSISTANCE .................................................................................................. 123 

ANNEX 7: LIST OF POTENTIAL INDICATORS FOR THE INVESTEU FUND ................................. 128 

ANNEX 8: EXAMPLES OF INDICATORS FOR THE SME WINDOW ................................................ 129 

ANNEX  9:  EXAMPLES  OF  INDICATORS  FOR  SOCIAL  INVESTMENT  AND  SKILLS 

WINDOW ......................................................................................................................................... 133 

ANNEX 10: DEFINING AND ASSESSING ADDITIONALITY ............................................................ 138 

ANNEX 11: ACCESS OF NON-EU MEMBER STATES TO EU FINANCIAL INSTRUMENTS ........ 144 

ANNEX 12: ASSESSMENT OF DUPLICATION, SYNERGIES AND OVERLAPS ............................. 146 

I 

 
 
 
ANNEX 13: INVESTEU FUND – GOVERNANCE ................................................................................. 150 

List of Figures 

Figure 1 - GDP per capita at current prices, 2006 and 2016 (EU-28 = 100) ................................... 3 
Figure 2 - Investment (% GDP) in EU28 ........................................................................................ 4 
Figure 3 - Infrastructure investment by sector and by source, 2005-2016 (in % of GDP) .............. 5 
Figure 4 - Annual Investment needs (current levels and gaps) for sustainable infrastructure ........ 5 
Figure 5 - Total annual venture capital funding by continent (USD billion) .................................. 9 
Figure 6 - 448 emerging, current & exited tech companies valued at more than $500m .............. 10 
Figure 7 - Correspondence between existing instruments & proposed InvestEU Windows ......... 24 
Figure 8 - Current governance for EFSI and FIs vs the proposed governance under InvestEU ... 32 
Figure 9 - TA component (InvestEU Advisory) under InvestEU ................................................. 47 

List of Tables 

Table 1 - Minimum estimate of the gap in social infrastructure investments ............................... 11 
Table  2  -  Overview  of  budget  allocations  and  estimated  investments  to  be  mobilised  in  the 
current MFF and under the InvestEU Fund ................................................................................... 23 
Table 3 - From the EFSI and financial instruments (2014-2020) to the InvestEU Fund .............. 26 

II 

 
 
 
 
 
 
Glossary  

Term 

Definition 

Blending facilities 

A  cooperation  framework  established  between  the  Commission  and 
development  or  other  public  finance  institutions  with  a  view  to 
combining non-repayable forms of support and/or financial instruments 
from  the  EU  budget  and  financial  instruments  from  development  or 
other  public  finance  institutions  as  well  as  from  commercial  finance 
institutions and investors.  

Contingent liability 

 A potential financial obligation that may be incurred depending on the 
outcome of a future event. 

Equity investment 

Provision of capital to a firm, invested directly or indirectly in return for 
total or partial ownership of that firm and where the equity investor may 
assume some management control of the firm and may share the firm's 
profits. 

Budgetary 
guarantee 

Financial 
instruments 

Financial product 

the  Union  budget,  pursuant 

Guarantee  provided  by 
legal 
commitment to support a programme of actions, representing a financial 
obligation that can be called upon if a specified event materialises during 
the programme implementation, and that remains valid for the duration 
of the programme. 

to  a 

Union  measures  of  financial  support  provided  from  the  EU  budget  to 
address  one  or  more  specific  policy  objectives  of  the  Union.  Such 
instruments  may  take  the  form  of  equity  or  quasi-equity  investments, 
loans  or  guarantees,  or  other  risk-sharing  instruments,  and  may,  where 
appropriate, be combined with other forms of financial support or with 
funds under shared management or funds of the European Development 
Fund. 

the 

Financial  mechanism  or  arrangement  agreed  between  the  Commission 
and 
the 
implementing partner provides direct or intermediated financing to final 
recipients mainly in the forms of debt or equity. 

implementing  partner  under 

terms  of  which 

the 

Financing and/or 
investment 
operations 

Operations  to  provide  finance  directly  or  indirectly  to  final  recipients, 
carried out by an implementing partner in its own name, provided by it 
in  accordance  with  its  internal  rules  and  accounted  for  in  its  own 
financial statements. 

Guarantee 
agreement 

Implementing 
partner 

Quasi-equity 
investment 

Legal instrument whereby the Commission and an implementing partner 
specify the conditions for proposing financing or investment operations 
to  be  granted  the  benefit  of  the  EU  guarantee,  for  providing  the 
budgetary guarantee for those operations and for implementing them. 

Eligible counterpart such as a financial institution or other intermediary 
with whom the Commission signs an agreement to implement the Union 
funds. 

Type  of  financing  that  ranks  between  equity  and  debt,  having  a  higher 
risk than senior debt and a lower risk than common equity and that can 
be structured as debt, typically unsecured and subordinated and in some 

III 

 
 
cases convertible into equity, or into preferred equity. 

Mid cap companies 

Entities  having  up  to 3 000  employees  that  are  not  SMEs  or  small 
mid-cap companies. 

Multiplier effect 

Investment  by  eligible  final  recipients  divided  by  the  amount  of  the 
Union contribution. 

National 
promotional  banks 
or institutions 

Legal  entities  carrying  out  financial  activities  on  a  professional  basis 
which are given mandate by a Member State or a Member State's entity 
at  central,  regional  or  local  level,  to  carry  out  development  or 
promotional activities. 

Risk-sharing 
instrument 

Financial  instrument  which  allows  for  the  sharing  of  a  defined  risk 
between  two  or  more  entities,  where  appropriate  in  exchange  for  an 
agreed remuneration. 

Small and 
medium-sized 
enterprises (SMEs) 

Small mid-cap 
companies 

Micro, small and medium-sized enterprises as defined in Article 2 of the 
Annex to Commission Recommendation 2003/361/EC1. 

Entities having up to 499 employees that are not SMEs. 

Technical Assistance  Advisory  support  for  the  identification,  preparation,  development, 
structuring,  procuring  and  implementation  of  investment  projects,  or 
enhance  the  capacity  of  promoters  and  financial  intermediaries  to 
implement  financing  and  investment  operations.  Its  support  may  cover 
any stage of the life-cycle of a project or financing of a supported entity, 
as appropriate.   

Third country 

Country that is not member of the European Union. 

1 Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-
sized enterprises (OJ L 124, 20.5.2003, p. 36) 

IV 

 
 
 
 
                                                 
Acronyms 

Acronym 

Meaning 

BG 

CCS 

CEF 

CEO 

CMU 

COSME 

COSME + 

CRD IV 

CRR 

EaSI 

EC 

ECB 

EDP 

EFSI 

EIAH 

EIB 

EIF 

EIPP 

ERC 

Budgetary Guarantee 

Cultural and Creative Sectors 

Connecting Europe Facility 

Chief executive officer 

Capital Markets Union 

Competitiveness of Enterprises and Small and Medium-sized 
Enterprises 

Europe’s programme for small and medium-sized enterprises 

Capital Requirements Directive IV 

Capital Requirements Regulation 

Employment and Social Innovation 

European Commission 

European Central Bank 

InnovFin Thematic Products - Energy Demo Projects 

European Fund for Strategic Investments 

European Investment Advisory Hub 

European Investment Bank 

European Investment Fund 

European Investment Project Portal 

European Research Council 

ESI Funds/ ESIF 

European Structural and Investment Funds 

FI 

FR 

IFI 

INEA 

IPE 

IPO 

MDB 

MFF 

MS 

NCFF 

Financial Instrument 

Financial Regulation 

International Financial Institution 

The Innovation and Networks Executive Agency 

Investment Plan for Europe 

Initial Public Offering 

Multilateral Development Bank 

Multiannual Financial Framework 

Member State 

Natural Capital Financing Facility 

V 

 
 
NPB 

OPC 

PBI 

PbR 

PF4EE 

PPP 

R&D 

R&I 

RSB 

SPV  

TA 

TEN 

TEN-E 

TEN-T 

TFEU 

VC 

National Promotional Bank 

Open Public Consultation 

Project Bond Initiative 

Payment-by-Results 

Private Finance for Energy Efficiency 

Public–private partnership 

Research and Development 

Research and Innovation 

Regulatory Scrutiny Board 

Special Purpose Vehicle 

Technical Assistance 

Trans-European Networks 

Trans-European Energy Networks 

Trans-European Transport Network 

Treaty on the Functioning of the European Union 

Venture Capital 

VI 

 
1 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT  

1.1  Scope and context  

In  line with the political  orientation and guidance note of the College on the next Multiannual 
Financial  Framework  (MFF),  there  is  a  need  to  explore  ways  to  incorporate  the  cross-cutting 
objectives of the new MFF in the future EU investment programme, particularly with regards to 
simplification,  flexibility,  synergies  and  ensuring  coherence  with  other  EU  programmes.  The 
considerations put forward in the Commission's Reflection Paper2 on the future of EU finances 
highlight  the  need  "to  do  more  with  less"  and  leverage  the  EU  budget  at  a  time  of  budgetary 
constraints.  To  address  the  overlaps  inherent  in  the  current  multitude  of  EU-level  financial 
instruments (FIs) and applicable rules, the Reflection Paper suggests as a possible solution their 
integration  in  a  single  fund.  This  single  fund  would  provide  support  via  a  wide  variety  of 
financial  products  while  having  a  strengthened  focus  on  policy  areas  and  objectives.  It  also 
requests  EU-level  financial  instruments  and  those  managed  by  Member  States  under  cohesion 
policy to be complementary. 

EU  financial  instruments  and  budgetary  guarantees  (BGs)  are  financial  tools  aimed  to  support 
investment and to achieve EU policy objectives. Financial instruments can take the form of debt, 
guarantees, equity, etc. Budgetary guarantees back financial products provided by implementing 
partners. 

Their main objective is to address market failures and suboptimal investment situations related to 
the  supply  of  financing  to  economic  actors  with  a  risk  profile  that  private  financiers  are  not 
always able or willing to address. The reasons can range from asymmetry of information to risk 
averseness of private investors, underdeveloped financial markets and liquidity problems.  

This  lack  of  financing  provided  by  the  market  may  have  negative  externalities  that  hinder 
economic growth, job creation, innovation, the pursuit of long term objectives, the emergence of 
more  sustainable  economic  models  and  the  resilience  of  the  financial  system.  In  these  cases, 
financial public support may be justified.  

The  public  support  may  be  provided  in  the  form  of  grants  or  repayable  instruments.  For 
economically  viable  projects  with  a  revenue  generating  capacity,  a  more  systemic  use  of 
financial instruments and budgetary guarantees can help increase the impact of public funds. 

The  EU  has  been  successfully  addressing  investment  gaps  related  to  market  failures  with  EU 
financial  instruments  since  the  mid-1990s.  The  EU's  first  budgetary  guarantee,  the  External 
Lending  Mandate,  was  created  in  the  1970s  and  is  still  used  today  to  support  EIB’s  lending 
activities  outside the  EU.  The  New  Community  Instrument,  mobilising  investments  by  the  EU 
budget in the form of loans "to stimulate an economic upturn and support common policies", was 
created in 1978. 

Under the current and previous MFFs, financial instruments have been expanding under a variety 
of programmes. During the 2014-2020 MFF, the Commission established 16 centrally managed 
FIs3. The budget  allocation for these  instruments for internal action  currently  amounts to  EUR 

2 COM(2017) 358 of 28 June 2017. 
3 These  financial  instruments  were  created  under  Regulations  establishing  different  Union  Programmes,  under  the  relevant 
provisions  of  the  Financial  Regulation.  This  impact  assessment  does  not  consider  financial  instruments  created  under  the 
previous MFF and those targeting external action.  

1 

 
                                                 
5.4  billion4.  These  instruments  aim  at  supporting  investments  in  different  policy  areas,  like 
Research  and  Innovation  (R&I),  small  and  medium  size  enterprises  (SME)  financing, 
infrastructure, cultural sectors as well as promoting environmental and social sustainability (see 
Annex 5 for a complete list of 2014-2020 centrally managed financial instruments and budgetary 
guarantee for internal action).  

Financial instruments are also a delivery mechanism for the European Structural and Investment 
Funds' (ESI Funds) programmes delivered under shared management. These instruments address 
specific Member States and regions and they are managed by the relevant Managing Authorities. 
The total budget planned to be delivered through financial instruments under shared management 
for the 2024-2020 period amounts to approximately EUR 21 billion.  

Moreover, in the aftermath of the financial and sovereign debt crisis, boosting jobs, growth, and 
investment has become one of the top 10 priorities of the Juncker Commission5. As a response to 
the subdued investment levels, the Commission launched in November 2014 the Investment Plan 
for Europe6. It focuses  on removing  obstacles  to investment and seeks to deliver jobs, growth, 
and innovation in Europe. One of its key actions is the European Fund for Strategic Investments 
(EFSI)7, which aims at mobilising EUR 500 billion of additional investment through support via 
an Infrastructure and Innovation Window, and an SME Window by end-2020. EFSI provides a 
budgetary guarantee of EUR 26 billion underpinned by provisioning of budgetary resources of 
EUR  9.1  billion.  Moreover,  the  EIB  provided  additional  risk-bearing  capacity  of  EUR  7.5 
billion.  

Other  actions  include  the  European  Investment  Advisory  Hub  (EIAH)  that  provides  technical 
assistance  to  private  and  public  project  promoters,  as  well  as  the  European  Investment  Project 
Portal (EIPP) that is an online platform connecting project promoters and investors.  

The  conditions  for  an  uptake  of  investment  have  improved  since  2014,  thanks  to  the 
improvement  of  the  economic  conditions  and  also  due  to  the  public  intervention  such  as  the 
EFSI.  However,  important  investment  gaps  have  been  observed  in  different  policy  areas  often 
held back by persistent market failures. 

Based  on  the  public  consultation  for  the  next  MFF  and  the  mid-term  evaluations  of  the  EU 
centrally-managed  financial  instruments  and  the  EFSI,  the  Commission  intends  to  propose  the 
creation  of  the  InvestEU  Programme,  a  single  EU  investment  support  mechanism  for  internal 
action  for  the  2021-2027  MFF.  The  Programme  would  include  an  InvestEU  Fund,  InvestEU 
Advisory as well as the InvestEU Portal. The InvestEU Fund would be the successor programme 
to  the EFSI  and  the current centrally  managed financial  instruments (excluding external action 
financial instruments). The InvestEU Advisory would be the successor mechanism to the EIAH 
and  current  centrally  managed  technical  assistance  initiatives.  The  InvestEU  Portal  is  the 
successor of the European Investment Project Portal.  

The InvestEU Fund will consist of providing an EU budget guarantee that will back the financial 
products  provided  by  the  implementing  partners.  It  would  target  EU  added-value  priority 
projects  and  promote  a  coherent  approach  to  financing  EU  policy  objectives.  It  would  use  an 

4 Source: Commission services. See Annex 5. 
5 https://ec.europa.eu/commission/sites/beta-political/files/juncker-political-guidelines-speech_en.pdf  
6 https://ec.europa.eu/commission/priorities/jobs-growth-and-investment/investment-plan-europe-juncker-plan_en  
7 The Regulation (EU) 2015/1017 was amended by Regulation (EU) 2017/2396 of the European Parliament and of the Council of 
13 December 2017 amending Regulations (EU) No 1316/2013 and (EU) 2015/1017 as regards the extension of the duration of 
the  European  Fund  for  Strategic  Investments  as  well  as  the  introduction  of  technical  enhancements  for  that  Fund  and  the 
European Investment Advisory Hub (OJ L 345, 27.12.2017, p. 34). 

2 

 
                                                 
effective and efficient mix of EU financing tools for specific policy areas and would target cross-
sector needs and emerging priorities. It will also improve complementarity between different EU 
investment financing instruments by avoiding duplications and overlaps. 

The  InvestEU  Fund  would  also  be  accompanied  by  technical  assistance  (TA),  the  InvestEU 
Advisory,  aimed  at  preparing,  developing  and  implementing  a  robust  investment  pipeline.  The 
InvestEU  Advisory  will  build  on  existing  initiatives  (e.g.  EIAH,  ELENA,  InnovFin  Advisory) 
and provide support where possible and appropriate within InvestEU Fund objectives. Such TA 
support will also promote environmental and social sustainability that are important cross-cutting 
objectives. 

The envisaged scope of this impact assessment relates to identifying the main challenges to be 
addressed  by  this  support  mechanism  with  a  focus  on  the  main  improvements  and  possible 
disadvantages  in  terms  of  budgetary  efficiency,  synergies, simplification,  flexibility  and  policy 
impacts that it can bring compared to the current interventions from the EU budget in the form of 
financial instruments and budgetary guarantee.  

The baseline for the InvestEU Fund is built on the budgetary allocations under the current MFF 
for centrally managed financial instruments and the EFSI (more details in section 3 and Annex 5) 

This impact assessment constitutes an ex-ante evaluation in the sense of the requirements of the 
Financial Regulation for the creation of the InvestEU Fund and its budgetary guarantee. 

1.2 

Investment in a post-crisis economic environment 

Since 2008, the crisis has motivated specific initiatives aiming at promoting economic activity in 
order to support jobs and growth and/or mitigate the effects of the crisis: the European Economic 
Recovery  Plan  (2009-2010),  the  Marguerite  Fund  (launched  in  2010),  Progress-Microfinance 
(launched in 2011), the SME Initiative (launched in 2014) and the EFSI (launched in 2015).  

Figure 1 - GDP per capita at current prices, 2006 and 2016 (EU-28 = 100) 

Source: Eurostat  
According  to  the  last  Commission  economic  forecasts8,  the  expansion  is  making  its  headway. 
Lending to non-financial corporations grew by 2.9% in 2017 and investment should continue to 

8 European Economy Forecast, Winter 2018 (interim), Institutional Paper 073, February 2018 

3 

 
 
                                                 
grow at a robust pace in 2018 and 2019. Over the forecast horizon, the expansion is expected to 
remain solid. By 2021, Member States are expected to have recovered their pre-crisis GDP level, 
with very few exceptions. 

However,  persistent  market  gaps  holding  back  investment  are  still  observed  in  different  policy 
areas. The recent acceleration of investment in the EU has not managed to bring investment rates 
up  to  historical  averages.  Efforts  will  therefore  need  to  continue  beyond  2020  to  bring 
investment back to its long-term sustainable trend with particular focus on current and emerging 
EU policy priorities.  

Figure 2 - Investment (% GDP) in EU28 

 Source: AMECO and ECFIN calculations 

Against this background, the InvestEU Fund will be designed by refocusing the EU investment 
support intervention in a more policy-oriented way, addressing the challenges identified below.  

1.2.1  Sustainable infrastructure9 

Infrastructure  investment  activities  in  the  EU  in  2016  were  about  20%  below  investment  rates 
before the global financial crisis. Investment rates in 2016 represented 1.8% of EU GDP, down 
from  2.2%  in  200910.  Compared  to  2009,  current  infrastructure  investment  in  Europe  declined 
most in the transport sector.  

The Commission has estimated investment needs in several key policy areas. For example:  

  To  reach  the  EU’s  2030  climate  and  energy target,  about  EUR  379  billion  investments  are 
needed annually over the 2020-2030 period, mostly in energy efficiency, renewable energy 
sources, and infrastructure11 – excluding transport infrastructure.  

  Circa EUR 500 billion will be needed to  complete the TEN-T core network12 during 2021-
2030 and  up to  EUR 1.5 trillion, if the TEN-T comprehensive network and  other  transport 
investments are included. In case of the TEN-E (i.e. energy transmission projects with cross-
border relevance), it is projected that EUR 179 billion will need to be invested during 2021-

9 Infrastructure in this context is broader than large, cross border, network infrastructure (i.e. a concept used in trans-European 
network regulations) and refers broadly to the infrastructure necessary for economic development.  
10 EIB, Investment Report 2017/2018 – From Recovery to Sustainable Growth 
11 Clean Energy For All - European Communication COM(2016) 860 final  
12 TEN-T Work Plans: https://ec.europa.eu/transport/themes/infrastructure_en 

4 

 
 
                                                 
203013. These include investments that can enable important CO2 reductions as well as other 
priority  air  pollutants,  and/or  provide  alternatives  for  infrastructure  with  large  impacts  on 
natural capital.  

  The  estimated  investment  required  to  achieve  the  objectives  stated  in  the  EU  Urban  Waste 
Water  Directive  ranged  between  EUR  22  and  25  billion,  according  to  the  information 
gathered  under  the  last  article  17  Report  from  EU  Member  States  forecasts14.  Investments 
forecasted  increasingly  relate  to  the  renewal,  improvement  and  extension  of  the  existing 
infrastructure.  

Figure 3 - Infrastructure investment by sector and by source, 2005-2016 (in % of GDP) 

Source: Eurostat, Projectware, EPEC 

The  weak  infrastructure  investment  in  Europe  has  been  largely  attributed  to  a  decline  in 
investment activities by governments (primarily regional or local authorities). Fiscal constraints, 
regulatory or political instability and investment decisions driven by political choices have been 
identified  as  the  main  challenges  to  infrastructure  investment.  According  to  EIB  estimates,  the 
overall investment gap in transport, energy and resource management infrastructure has reached 
a yearly figure of EUR 270 billion15.  

Figure 4 - Annual Investment needs (current levels and gaps) for sustainable infrastructure 

Source: Action Plan: Financing Sustainable Growth, COM (2018)97 final 

13 Based on the study "Investment needs in trans-European energy infrastructure up to 2030 and beyond", Ecofys, July 2017. 
14 Figures  based  on  the  information  gathered  from  EU  Member  States  forecasts  under  Art  17  of  the  Urban  Waste  Water 
Treatment  Directive  (UWWTD) . These include investment  forecasted  for  achieving  compliance with the  UWWTD, also  (and 
increasingly) for the renewal, improvement and extension of the existing infrastructure.  
15 See  EIB,  'Restoring  EU  competitiveness',  2016.  The  estimate,  until  2020,  include  investments  in  modernising  transportation 
and  logistics,  upgrading  energy  networks,  increasing  energy  savings,  renewables,  improving  resource  management,  including 
water and waste.  

5 

 
 
 
                                                 
In the field of telecommunications, the investment gap is approximately EUR 65 billion to reach 
the global benchmark for broadband services and to match US investments in cyber security and 
data centre capacity16.  

Therefore, it is essential to further stimulate private sector investment.    

The  lack  of  a  strong  pipeline  of  sustainable  infrastructure  projects  is  a  recurring  concern  for 
investors.  The  capacity  to  develop  and  implement  projects  varies  widely  across  the  EU  and 
between  sectors.  Therefore,  technical  assistance  is  key  to  further  support  the  development  of 
sustainable infrastructure projects in the EU and to scale up small and scattered projects. 

In  addition,  from  environmental,  and  climate  policy  perspectives,  the  failure  to  reflect 
environmental  costs  in  market  prices  renders  sustainable  investment  in  infrastructure  less 
attractive.  

Further  challenges  arise  for  cross-border  projects.  Costs  and  benefits  of  projects  involving 
several  Member  States  are  asymmetrically  distributed  among  them,  leading  to  coordination 
failures.  At the  same  time,  costs  are  charged  at  the  national  and  local  level,  while  benefits  are 
realised  transboundary  or  at  EU  scale  and  are  dependent  on  other  investments  in  the  supply 
chain, value chain or network.  

1.2.2  Research and Innovation  

Research and Innovation (R&I) investment is a key driver of productivity and economic growth. 
However, private companies do not sufficiently invest in R&I from a welfare perspective. The 
reason is that companies do not take into account the positive externality from knowledge spill-
overs,  which  benefit  the  whole  economy.  Indeed,  the  social  returns  from  R&D  investment  are 
estimated  to  be  two  to  three  times  higher than  the  private  returns.  The IMF  (2016)  shows  that 
fully internalising the externalities of R&D would lead to 40% higher investments compared to 
the status quo. Such an increase could lift GDP in individual economies by 5% in the long term – 
and globally by as much as 8% due to international spillovers.17  

R&I  projects  are  more  difficult  to  finance  because  they  are  risky  and  their  returns  are  highly 
skewed.  R&I  may  face  significant  adverse  selection  and  moral  hazard  problems.  This  leads  to 
lower  investment  both  in  terms  of  equity  –  as  investors  discount  this  uncertainty  on  financial 
markets – and in terms of debt financing – because of the intangible nature of investment or high 
risks  related  to  innovative  technologies,  which  makes  collateralisation  difficult,  if  not 
impossible. Financing  constraints thus hamper profitable R&I  investment opportunities, reduce 
firms’  innovative  performance  and  growth  prospects  of  economies,  as  opposed  to  the  case  of 
frictionless  capital  markets18.  R&D  investment  has  typically  also  high  adjustment  costs  (i.e.  it 
relies  on  highly  skilled  human  capital  with  firm  specific  knowledge).  Firms  therefore  tend  to 
smooth  their  R&D  investment  over  time.  Corporate liquidity  can  have  an  important  impact  on 
innovative firms' behaviour: young and smaller firms rely extensively on cash reserves to buffer 
R&D from the volatility in key sources of finance.19 The InvestEU Fund would allow financially 

16 IDEM.  
17 IMF (2016), Fiscal Monitor: Acting Now, Acting Together, Washington, April. 
18 Carpenter,  R,  and  B.  Petersen  (2002)  "Capital  market  imperfections,  high-tech  investment,  and  new  equity  financing",  The 
Economic  Journal,  112.  Hall,  B,  Moncada-Paterno,  P,  Montresor,  S  and  A.  Vezzani  (2016)  "Financing  constraints,  R&D 
investments and innovative performances: new empirical evidence at the firm level for Europe".  Economics of Innovation and 
New Technology.25:3, 183-196.   
19 Brown,  G.  Martinsson,  and  B.  Petersen  (2012)"  Do  Financing  Constraints  Matter  for  R&D?",  European  Economic  Review, 
56(8).  

6 

 
                                                 
constrained firms to maintain a relatively smooth flow of R&D expenditure in the face of shocks 
to finance, thereby reducing adjustment costs.  

The intensity of financial constraints for R&I vary with the structural and sectoral characteristics 
of  companies.  While  financing  constraints  are  in  particular  acute  for  younger  and  smaller 
innovative companies, such barriers can also be nonlinear. D’Este et al (2012) demonstrate that 
cost  and  market  barriers  for  innovation  are  very  present  for  non-innovative  firms  that  want  to 
embark on innovative projects as well as for highly innovative firms.20 This is in particular the 
case  in  the  EU.  R&D  investments  made  by  EU  leading  innovators,  which  are  typically  large 
firms, are more sensitive to financing constraints than their US counterparts, particularly in high-
tech sectors21. 

Better  access  to  finance  could  also  improve  sluggish  productivity  growth.  A  slowdown  in 
productivity  growth  is  particular  acute  in  the  EU  and  threatens  future  increase  in  living 
standards. Recent research shows that the productivity puzzle is not due to a lack of innovation, 
but to a lack of innovation diffusion between firms across all sectors. 22 Cutting-edge firms are 
not  slowing  down  in  their  productivity  growth,  but  other  firms  are  not  keeping  up.  The  gap 
between a handful of innovation leaders and the rest is widening. Furthermore, greater inequality 
among firms is one of the main culprits behind the rise in income inequalities. Coad, Pellegrino 
and Savona (2015) show that the cost and the availability of finance appear as crucial innovation 
barriers  and  negatively  affect  productivity  across  the  whole  distribution  (conditioned  on  size, 
age,  exports  and  education  levels  of  firms).23 Brown,  Martinsson  and  Petersen  (2012)  results 
suggest  that  better  access  to  equity  finance  would  significantly  increase  firm-level  R&D 
intensity24. 

Although  ample  evidence  exists  that  economies  achieve  large  and  significant  returns  on  R&I 
investments,  and  that  the  latter  create  new  and  better  jobs  in  an  economy  that  is  ever  more 
knowledge-based  and  intangible  asset-intensive,  the  EU  underinvests  in  R&D  compared  to  its 
major  competitors25.  Businesses  in  the  EU  spend  far  less  on  R&D  than,  those  in  the  US  and 
Japan, and less than a half of the South Korea, and the latest figures show a further increase of 
the gap. The underinvestment in business R&D is one of the reasons behind the widening of the 
EU’s productivity gap compared to the US. 

The R&D investment gap to reach the 3% EU GDP amounted to EUR 144 billion for the year 
201626. 

1.2.3  SMEs  

There are 23.8 million enterprises in the EU that employed 93 million people in 2016, and which 
accounted for 67% of total private-sector employment and generated 57% of value added in the 

20 D'Este, P. et al (2012), "What Hampers Innovation? Revealed Barriers versus Deterring Barriers", Research Policy 41(2) 
21 Cincera, M., J. Ravet, and R. Veugelers (2016) "The sensitivity of R&D investments to cash flows: comparing young and old 
EU and US leading innovators," Economics of Innovation and New Technology.  
22 "The future of productivity", OECD, 2015. 
23 Coad, A. , G. Pellegrino and M. Savona (2016) "Barriers to innovation and firm productivity",  Economic of Innovation and 
New Technology, Volume 25. 
24 Brown,  G.  Martinsson,  and  B.  Petersen.  (2012)  “Do  financing  constraints  matter  for  R&D?”,  European  Economic  Review, 
Volume 56, Issue 8, Paes 1512-1529.  
25 Gross domestic expenditure on R&D in the EU is stagnating around 2% over recent years, while the United States, Japan and 
South  Korea  invest  2.8  %,  3.3  %  and  4.2  %  respectively.  China,  at  2.1  %,  has  also recently  overtaken  the  EU.  Business  R&I 
intensity in the EU stands at 1.3 % compared to almost 2 % for the United States and nearly triple that for South Korea, at almost 
3.5 %: http://ec.europa.eu/eurostat/statistics-explained/index.php/R_%26_D_expenditure. 
26 Commission services calculations based on Eurostat data.  

7 

 
                                                 
EU-28 non-financial business sector. About 85% of newly created jobs in the EU are accounted 
for by SMEs. However, obtaining financing in the form of debt or equity can still be a hurdle for 
company  creation  and  its  growth  and  scale-up,  in  particular  in  Member  States  with  less 
developed financial markets. European SMEs rely heavily on debt finance in the form of bank 
overdrafts,  bank  loans  or  leasing.  Market-based  instruments  (e.g.  equity)  are  only  considered 
relevant  by  12%  of  SMEs27 although  in  many  cases  equity  (risk-capital)  is  more  suitable,  as 
small  companies  often  lack  collateral  or  have  irregular  cash-flows  (equity  does  not  impose 
specific repayment schedule, and hence can be less of a burden during times of economic stress).  

Providing more diversified sources of funding is necessary for increasing the ability of SMEs to 
withstand  economic  downturns  and  for  making  the  financial  system  more  resilient  during 
economic shocks. This is a key objective pursuit under the Capital Markets Union. 

Problem with access to debt finance 

Following  the  financial  crisis,  higher  capital  requirements  (e.g.  CRD)  and  the  need  for  banks’ 
deleveraging, negatively affected banks’ willingness and ability to lend and to accept risk. This 
had  a  major  negative  effect  on  available  SME  bank  finance  across  the  EU.  Credit  standards 
tightened considerably and SMEs as a consequence experienced a credit crunch.  

The  ECB’s  monetary  policy  has  significantly  improved  the  liquidity  situation  and  positive 
economic  developments  have  helped  as  well.  In  addition,  an  SME  Supporting  Factor  was 
introduced, thus reducing the capital requirements for exposures to SMEs in comparison with the 
pre-CRR/CRD IV framework.  

All  of  these  activities  have  led  to  an  improvement  in  the  conditions  for  access  to  finance,  and 
SMEs  have  on  average  recovered.  Moreover,  financial  markets  in  the  Member  States  show 
different degrees of development, in terms of diversity of financial institutions, product offerings 
and risk appetite. SMEs have no means to overcome these national differences because they rely 
on  local  or  national  providers  of  finance.  SME  financing  is  predominantly  provided  within 
national boundaries due to regulatory constraints. Cross-border lending is only at a nascent stage, 
predominantly fuelled by the emergence of fintech companies. 
For  SMEs,  the  debt  finance  gap  is  estimated  at  EUR  30  billion  annually 28.  The  financing 
problem is acute for firms that are undertaking activities with significant financial, technological, 
organisational or business-model risk and those wanting to finance growth projects which do not 
result in the acquisition of fixed assets which could be collateralised (e.g. in the area of culture 
and creativity, digitisation, internationalisation, etc.). For example, the financing gap for creative 
SMEs across Europe has been estimated at between EUR 8 and EUR 13 billion over 2014-2020. 
This  sizeable  gap  is  the  consequence  of  a  very  dynamic  sector  that  contributes  4.4% 
(approximately  EUR  558  billion)  of  the  EU  GDP  and  3.8%  (8.3  million  jobs)  of  the  total  EU 
workforce. 29  Moreover,  SMEs  face  a  knowledge  gap  regarding  investments  in  their  digital 
transformation including Artificial Intelligence adoption. This is shown by the difference of take 
up of digital technologies by large companies (42% are highly digitised) vs SMEs (only 16% are 
highly digitised).  

the  Access 

to  Finance  of  Enterprises 

27  Survey  on 
to  September  2017,  section  3.1: 
in 
https://www.ecb.europa.eu/pub/pdf/other/ecb.accesstofinancesmallmediumsizedenterprises201711.en.pdf?beb1832df4af9efa945a
5a1f7b99eeb7  
28 COSME+ impact assessment  
29 The economic contribution of the creative industries to EU GDP and employment, TERA, 2014, 

the  euro  area  April 

8 

 
                                                 
Furthermore, undertaking innovative and other high-risk activities that are poorly understood by 
finance providers, result in low credit scores and lead to high interest charges to compensate for 
the perceived risk.  

Moreover,  especially  younger  and  smaller  companies  or  those  requiring  rather  small  financing 
amounts  are  faced  with  a  structural  financing  gap  due  to  information  asymmetries,  lack  of 
financial track records and disproportionate dossier costs, which is independent of the economic 
cycle or the country they are located in. If financing is offered at all, it is offered at unreasonable 
conditions in terms of interest rates applied, maturities, repayment terms and collateral required.  

These market failures – prevalent cross the EU – hinder the start-up and growth of companies. 
Companies rarely have the internal funds they need, and consequently seek external financing. 

This  market  environment  results  in  an  access  to  finance  gap  for  SMEs  that  have  a  higher  risk 
profile or insufficient collateral, and such access to finance gap differs from country to country. 

Insufficiently developed equity financing market 

Despite  the  fact  that  only  12%  of  SMEs  currently  consider  equity  financing  relevant  for  their 
business,  it  is  an  important  financing  component,  specifically  for  high-risk  start-ups  and  high 
growth  companies  that  require  significant  long-term  investments  and  which  do  not  produce 
immediate free cash-flows which would allow servicing debt payments nor do require the need 
for a collateral.  

Alternative  sources  of  finance,  complementary  to  bank-financing  -  including  public  equity 
markets – private equity and venture capital - are more widely used in other parts of the world, 
and should play a bigger role in providing financing to companies that struggle to get funding, 
especially SMEs  

But  Europe's  capital  markets  are  still  very  fragmented  and  underdeveloped  (EU  SMEs  receive 
five times less venture capital funding compared to US as shown in figure 5). 

Figure 5 - Total annual venture capital funding by continent (USD billion) 

Source: PwC, MoneyTree Report, Q4 2017 

For  high-risk  start-ups  and  high  growth  of  companies,  obtaining  equity  finance  on  reasonable 
terms is difficult for different reasons: one is the asymmetry between the information held by the 
firm and that known to the investor; and conflicts of interest between a firm's managers and its 
shareholders (the principal-agent conflict). 

9 

 
 
Figure 6 - 448 emerging, current & exited tech companies valued at more than $500m 

Sources: TechCrunch, Rocket Internet Research 

While private capital for initial public offerings (IPOs) and pre-IPOs is in principle available, it 
is  not  sufficiently  made  available  for  this  particular  asset  class  of  risk  capital  investments. 
Investors  consider  the  risk/return  profile  for  venture  and  growth  capital  investments 
inappropriate  and  the  cost  of  undertaking  research  too  high.  Moreover,  investors  find  it 
inefficient  to  invest  because  the  funds  are  very  often  too  small.  These  framework  conditions 
create  a  market  gap  for  equity  risk  capital  finance  that  narrows  the  opportunities  for  exit 
strategies for leading technology companies (see figure 6). Matching US levels of venture capital 
financing as share of GDP would require around EUR 35 billion a year in additional EU venture 
capital activity30.  

1.2.4 

 Social investment and skills  

Investments in  social infrastructure, social economy enterprises or  social  enterprises producing 
goods ('tangibles') as well as social services, ideas and people ('intangibles') are crucially lacking 
in the EU, yet are critical for the EU and its Member States to develop into a fair, inclusive and 
knowledge-based society. At the moment the social sector as a whole continues to experience a 
significant  investment shortfall, and has  to  date been  considered in  a fragmented and scattered 
manner. Efforts to bridge the investment gap should also contribute to make social infrastructure 
and service provision more people-centred, accessible, and affordable. 

The  social  infrastructure  investment  gap  is  not  easily  quantifiable.  Due  to  the  heterogeneity  of 
the sector, no comprehensive market gap analysis on the entire social sector in Europe has been 
performed to date. According to the report of the “High-Level Task-Force on Investing in Social 
Infrastructure  in  Europe”  (HLTF) 31,  public  investment  in  social  infrastructure,  including  for 
education, health and housing, has been and remains low over the past decade, despite EIB/EFSI 
support. The HLTF has estimated that the investment gap for the priority sectors of affordable 
housing, education and healthcare can be calculated as an uplift of 25% of the current percentage 

30 EIB report: Restoring EU competitiveness. 2016 updated version available at 
http://www.eib.org/attachments/efs/restoring_eu_competitiveness_en.pdf  

31 The report of the "High-Level Task-Force on Investing in Social Infrastructure in Europe" estimated the minimal investment 
gap 
annually. 
See: http://ec.europa.eu/info/publications/economy-finance/boosting-investment-social-infrastructure-europe_en 

for  Education,  health  & 

at  EUR100-150  billion 

affordable  housing 

long-term 

care, 

and 

10 

 
 
                                                 
of  GDP  identified  for  each  sector.  This  estimate  determines  an  investment  gap  of  EUR  142 
billion p.a. as illustrated by the table below. 

Table 1 - Minimum estimate of the gap in social infrastructure investments  

Current 
annual 
investment 
in EUR 
billion p.a. 

Minimum gap per 
sector in EUR bn 
p.a. (uplift of 25 per 
cent of the current 
percentage of GDP) 

Additional items in EUR 
bn p.a. 

Annual 
Investment 
GAP in EUR 
bn 

Sector 

Education & 
Lifelong 
Learning 

(0.4% of GDP) 

Health & Long-
Term Care 

(0.5% of GDP) 

Affordable 
housing 

(0.4% of GDP) 

Totals 

65 

15 

- 

75 

28 

168 

20 

7 

42 

EUR 50 billion pa for 
long-term care 

Unknown amount for 
disability and migrants 

EUR 50 billion pa to 
address energy poverty 

100 

p.a. 

15 

70  

57 

142 

Source: HLTF Report on Investing in Social Infrastructure in Europe, January 2018  

Microfinance  and  social  enterprises  in  Europe  are  still  recent  developments  and  part  of  an 
emerging  market  that  is  not  yet  fully  developed.  Both  micro-enterprises,  in  particular  those 
employing  vulnerable  persons,  and  social  enterprises  are  often  confronted  with  difficulties  in 
getting  access  to  finance,  which  is a  significant  barrier  to  their  growth  and  development  while 
public finance in this area is still lacking, especially at the European level.  

The investment gap for micro-enterprises has been estimated through the same Survey on Access 
to Finance of Enterprises32, and constitutes between EUR 33 billion and EUR 81 billion of the 
loan  gap.  Social  enterprises  constitute  around  10%  of  EU  business.  This  indicates  that  the 
financing  gap  for  social enterprises  is  at  least  10%  of  the  total  estimated  gap,  between  EUR  3 
billion and EUR 8 billion. 

As  regards  skills  development,  there  are  very  large  gaps  in  terms  of  providing  apprenticeship-
type training across the EU33. Overall, the average annual company spending on apprenticeships 
in the EU is around 0.5% of their annual labour costs, or around EUR 30 billion, with potential 
gap of EUR 30 billion of investment to reach the level of financing in countries with advanced 
apprenticeships systems – i.e. 1% of the annual labour costs34. 

32

the  Access 

 Survey  on 

to  Finance  of  Enterprises 

to  September  2017: 
https://www.ecb.europa.eu/pub/pdf/other/ecb.accesstofinancesmallmediumsizedenterprises201711.en.pdf?beb1832df4af9efa945a
5a1f7b99eeb7 
33 Most of this type of training is performed in a small number of countries (notably Germany, contributing around 50% of all EU 
company spending on apprenticeships). Annual company spending on apprenticeships is estimated to stand at around 1% of their 
annual labour costs, or around EUR 30bn, see: Eurostat, Labour Cost Survey, 2012 
34 Source: Eurostat, Labour Cost Survey, 2012 

area  April 

euro 

the 

in 

11 

 
                                                 
A  Commission  analysis35 shared  and  discussed  in  the  Eurogroup  confirms  the  importance  of 
investments  in  human  capital  to  raise  productivity  and  boost  potential  growth.  The  EIB 36 
considers that to  reach US standards mostly in higher education annual investment of EUR 10 
billion for state-of-the-art education facilities would be required, in addition to annual EUR 90 
billion increased operational spending.  

EU support is therefore needed for improved educational attainment and skills providing easier 
access  to  labour  market,  lifelong  skills  development  facilitating  career  progression,  and 
minimising  the  risk  of  poverty/social  exclusion 37 .  This  includes  investing  in  quality  and 
affordable education, childcare, healthcare, long-term care, social housing and access to essential 
social  services.  Support  for  companies  (particularly  SMEs)  to  get  involved  more  in  combined 
school-and work-based education and training programmes as well as to improve the utilisation 
of skills through redesigned business processes is also needed. 

1.3  Lessons learned from previous programmes 

It  has  been  recognised  that  financial  instruments  such  as  guarantees,  loans,  and  equity  play  an 
important role for the achievement of EU policy objectives and one of the advantages is that the 
FIs  support  has  to  be  repaid,  which  leads  to  resources  being  used  for  several  funding  cycles. 
Their repayable nature also ensures better alignment of interests between different stakeholders, 
greater  economic  scrutiny  of  projects,  as  well  as  more  financial  discipline.  An  additional 
important feature is the leverage effect. This relates to the total investment mobilised by private 
investors in relation to the deployment of EU budget resources. These financial instruments and 
the  EFSI  "have  [also] become  EU  trademarks,  making  the  EU  visible and  recognisable  in  the 
daily lives of its citizens"38. 

However, there have been numerous requests underlining the need to simplify and streamline the 
available offer of EU investment support instruments. The fragmentation of the EU offer led to 
the emergence  of overlaps, different sets of rules by instruments and a lack of visibility of the 
EU  activity  in  this  field.  This  results  in  unnecessary  complexity  and  higher  budgetary  and 
administrative costs. There is also some criticism that the proliferation of financial instruments 
led  to  insufficient  accountability  and  control. 39  More  importantly,  final  beneficiaries  and 
financial intermediaries have become confused about the different solutions offered in terms of 
instruments and products. The post-2020 investment support scheme must therefore be focused, 
simpler  and  more  transparent,  while  allowing  for  quick  response  to  a  changing  market 
environment through an increased flexibility  of budgetary allocations  to emerging  priorities. A 
similar need for simplification has also been identified for the TA offers as they often underpin 
individual initiatives.  
The Reflection Paper on the Future of EU Finances"40 underlined that there seems to be evidence 
that "[t]he number of EU-level financial instruments and rules applying to them is an obstacle to 

35Commission note: Investment in human capital discussed at Eurogroup on 06/11/2017  
http://www.consilium.europa.eu/media/31409/investment-in-human-capital_eurogroup_31102017_ares.pdf  
36 See EIB, 'Restoring EU competitiveness', 2016.  
37 https://ec.europa.eu/info/business-economy-euro/growth-and-investment/structural-reforms/ageing-and-welfare-state-
policies_en  
38 "Reflection  paper  on  the  future  of  EU  finances",  June  2017,  https://ec.europa.eu/commission/publications/reflection-paper-
future-eu-finances_en  
39 Annual report of the Court of Auditors on the implementation of the budget concerning the financial year 2016, OJ 2017/C 
322/01, p. 55. 
40 https://ec.europa.eu/commission/sites/beta-political/files/reflection-paper-eu-finances_en.pdf    

12 

 
                                                 
their  efficient  use”.  The  Commission  Communication  on  the  next  MFF41 also  underlined  that 
"[…]  the  current  landscape  of  EU  market-based  instruments  is  fragmented,  with  almost  40 
financial instruments and three  budgetary  guarantees  and guarantee  funds  managed centrally, 
which amount to a share of around 4% of the current Multiannual Financial Framework. There 
is clear scope for rationalisation and greater efficiency."  
The  High  Level  Group  on  Simplification  for  post  202042 recommended:  "For  those  EU  funds 
which  support  investments  (ESIF,  EFSI,  CEF,  Horizon  2020,  etc.)  overlaps  which  lead  to 
competition  based  on  a  more  beneficial  legal  regime  should  be  identified  and  removed,  with 
effectiveness and results being the relevant factors to determine which instrument should be the 
most appropriate in a given context". 

The European Parliament also calls for simplification and greater efficiency. In its Resolution on 
the Reflection Paper on the Future of EU Finances43 the European Parliament:  

  "[A]dvocates a real and tangible simplification of implementation rules for beneficiaries and 

a reduction of the administrative burden”.  

  “Encourages  the  Commission,  in  this  context,  to  identify  and  eliminate  overlaps  between 
instruments offered by the EU budget which pursue similar objectives and serve similar types 
of actions. "  

 

In  particular,  the  Parliament  "calls  on  the  Commission  to  simplify  and  harmonise  the  rules 
governing the use of financial instruments in the next MFF with the aim of creating synergies 
between the different instruments and maximizing their efficient allocation."44 

Finally, there is a need to step up mainstreaming efforts notably related to the EU (and global) 
sustainable  development  objectives.  It  is  important  to  ensure  that  EU  investment  support 
mechanisms  such  as  the  InvestEU  Fund  are  guided  by  robust  and  advanced  sustainability 
criteria, including those set by the EU climate and environment policy45.  
Therefore, the InvestEU Fund will draw lessons from the past and current EU investment support 
instruments. This concerns in particular the experience with the 2014-2020 financial instruments 
as well as the EFSI. Detailed lessons learned and past evaluation results are included in Annex 3. 

Past  evaluations  have  demonstrated  that  the  EFSI  has  been  effective  in  delivering  concrete 
results and encouraging a sustainable increase in the low investment levels in Europe. 

In  particular,  the  budgetary  guarantee  underpinning  EFSI  has  proven  to  be  an  efficient  tool  to 
increase considerably the volume of riskier operations financed by the EIB. The EFSI budgetary 
guarantee  freezes  less  budgetary  resources  compared  to  financial  instruments,  as  it  requires 
limited  provisioning  needs  compared  to  the  level  of  financial  engagement.  In  other  words,  it 
assumes a contingent liability and is consequently expected to achieve efficiency gains that result 
in higher investment mobilised per euro spent. A budgetary guarantee has also proven more cost-

41 "A new, modern Multiannual Financial Framework for a European Union that delivers efficiently on its priorities post-2020", 
February 2018, COM(2018) 98 final –  
http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX%3A52018DC0098&from=EN  
42  "Final  conclusions  and  recommendations  of  the  High  Level  Group  on  Simplification  for  post  2020",  July  2017  - 
http://ec.europa.eu/regional_policy/sources/newsroom/pdf/simplification_proposals.pdf  
43 European Parliament resolution on the Reflection Paper on the Future of EU Finances (2017/2742(RSP)) 
44 European Parliament resolution of 14 March 2018 on the next MFF: Preparing the Parliament’s position on the MFF post-2020 
(2017/2052(INI)) 
45 https://ec.europa.EU/info/files/180308-action-plan-sustainable-growth_en 

13 

 
                                                 
efficient for the EU budget, as it is remunerated for the risk taken and it limits the payment of 
management fees to the implementing partner(s).  

Past EFSI evaluations have also stressed the need to improve EFSI’s geographical balance, avoid 
overlaps with other EU Financial Instruments, as well as reinforce and clarify additionality. It is 
also generally recognised that there is a need for greater advisory and technical assistance which 
would contribute to a sizeable pipeline of projects that contribute to the EU policy objectives. 

Evaluations  of  investment  support  programmes  noted  a  certain  level  of  fragmentation  and 
overlaps  among  different  EU  investment  support  instruments  as  well  as  with  financial 
instruments  under  shared  management.  For  instance,  CEF  evaluation  showed  that  its  financial 
instruments have seen limited uptake, partly due to the new financing opportunities opened by 
the EFSI. The Interim Evaluation of Horizon 2020 also points out that "since the set-up of EFSI 
in  2015,  it  has  proved  challenging  to  reach  InnovFin's  objectives,  as  a  significant  part  of  the 
products deployed overlap with EFSI in terms of both risk spectrum and eligibility". 

There is currently a certain overlap also between different financial instruments targeting SMEs, 
including with programmes under shared management. More detailed assessment of duplications 
and  overlaps  is  presented  in  Annex  12.  Moreover,  as  highlighted  in  the  European  Court  of 
Auditors’  report 46 on  the  COSME  Loan  Guarantee  Facility,  the  latter  has  achieved  positive 
results, but needs better targeting of beneficiaries and more coordination with national schemes. 
In particular, the report recommended that the Commission carries out an assessment of market 
needs  and  how  EU  guarantee  instruments  can  best  respond  to  these  needs  alongside 
national/regional  instruments.  In  this  regard,  the  Commission  has  prepared  an  in-depth  market 
assessment at the level of each Member State demonstrating the market gap and the rationale for 
an  intervention  at  EU  level  (more  details  are  available  in  the  IA  related  to  the  Single  Market 
Programme).  

The  EU  support  has  also  played  an  important  role  in  the  development  of  the  nascent  social 
investment  market  through  the  Programme  for  Employment  and  Social  Innovation  (EaSI),  in 
particular  for  microfinance  and  social  entrepreneurship,  empowering  European  citizens  and 
fostering  social  inclusion 47 .  Based  on  the  public  consultation,  the  social  inclusion  and 
employment  areas  are  seen  as  the  biggest  challenges  where  the  EU  response  in  terms  of 
investment is least sufficient. However, the resources have been rapidly absorbed and there is an 
important unmet demand. 

The experience of blending CEF grants with financing products or EIB or National Promotional 
Banks conventional lending or private finance has also been positive. More effort is needed to 
facilitate combining, when appropriate, different forms of support to maximise the leverage and 
impact of private or public funds. 

For future instruments, it will be important to strengthen the mobilisation of private capital and 
avoid potential crowding out effects (linked to additionality).  

1.3.1  Complementarity between the EU level and ESIF 

According to the ESIF Operational Programmes 2014-2020, financial instruments will account 
for  9.5%  of  the  European  Regional  Development  Fund  (ERDF),  2.7%  of  the  Cohesion  Fund 

46 "Special Report EU-funded loan guarantee instruments: positive results but better targeting of beneficiaries and coordination 
with  national  schemes  needed,  2017,  n.  20,  European  Court  of  Auditors,  Special  Report  (pursuant  to  Article  287(4),  second 
subparagraph, TFEU)", https://www.eca.europa.eu/Lists/ECADocuments/SR17_20/SR_SMEG_EN.pdf 
47 http://ec.europa.eu/social/main.jsp?langId=en&catId=1081&newsId=9071&furtherNews=yes  

14 

 
                                                 
(CF)  and  1.3%  of  the  European  Social  Fund  (ESF)  allocations  included  in  multi-fund 
programmes. The average allocation to FIs is 7.2%. This compares to 5% of ERDF allocation to 
FIs in the previous programming period48. 

Experience under the current and previous programming periods show that the complementarity 
of financial instruments under shared management and those centrally managed could be further 
improved.  In  particular,  the  Court  of  Auditors  noted  that  how  the  various  EU  guarantee 
instruments can best respond to SMEs needs alongside nationally/regionally funded instruments, 
thereby ensuring EU added value, was not adequately assessed49.  

The  attempts  to  combine  FIs  centrally  managed  and  those  under  shared  management  have 
proven  to  be  complex  and  this  might  have  been  one  of  the  reasons  that  slowed  down  their 
uptake. 
The  Commission's  Reflection  Paper  on  the  EU's  finances50 pointed  out  that  the  "new  EU-level 
financial  instruments  and  the  loan,  guarantee,  and  equity  instruments  managed  by  Member 
States  under  cohesion  policy  should  be  complementary".  It  further  indicates  that  this 
"complementarity  between  the  different  instruments  should  be  ensured,  through  upstream 
coordination, same rules and clearer demarcation of interventions" (p. 27).  

1.3.2  Results from the Open Public Consultation 

Open Public Consultations (OPC) for the post-2020 impact assessment were organised per group 
of policy areas. This impact assessment will mainly consider the results from the OPC on the EU 
Support for Investment51. For this policy area, 642 replies were received from all Member States. 
Relevant results from OPCs regarding different policy areas like Cohesion; Security, Migration 
and Asylum; Strategic Infrastructure; Values and Mobility are also taken into consideration. 

The  following  issues  raised  are  particularly  relevant  and  have  been  taken  into  account  in 
assessing the different possible actions presented in this report: 

  Most  respondents  believe  that  the  current  EU  support  for  investment  does  not  sufficiently 
address policy challenges like reducing unemployment, support social investment, facilitate 
digital  transition,  facilitate  access  to  finance  in  particular  to  SMEs,  ensure  a  clean  and 
healthy environment and support industrial development.  

  The  respondents  stressed  the  importance  of  EU  wide  policy  challenges,  among  others,  in 
areas  like research,  support  for education,  clean and  healthy environment,  and  transition  to 
low carbon and circular economy, and reducing unemployment.  

  Most  participants  believe  that  current  EU  investment  support  programmes  to  a  fairly  large 
extent  add  value  compared  to  what  Member  States  could  achieve  at  national  or  regional 
level.  

  Around  60%  of  respondents  to  the  OPC  on  Strategic  infrastructure  expressed  a  view  that 
difficulty to access financial instruments is an obstacle that prevents the current programmes 
from  successfully  achieving  policy  objectives.  For  OPC  on  Security  and  Cohesion,  the 
insufficient use of financial instruments is identified by around 40% of participants. 

48 "The use of new provisions during the programming phase of the European Structural and Investment funds" – Final Report , 
Altus Framework Consortium, May 2016. 
49 ECA Special report No 20/2017: https://www.eca.europa.eu/Lists/ECADocuments/SR17_20/SR_SMEG_EN.pdf  
50 Reflection  paper  on  the  future  of  EU  finances",  June  2017,  https://ec.europa.eu/commission/publications/reflection-paper-
future-eu-finances_en  
51 This was a subpart of the OPC on Investment, research and innovation, SMEs and single market. 

15 

 
                                                 
  A  vast  majority  of  participants  support  the  identified  steps  that  could  help  simplify  and 
reduce  administrative  burdens.  In  particular,  this  includes  fewer,  clearer  and  shorter  rules, 
alignment  of  rules  between  EU  funds,  as  well  as  a  stable  but  flexible  framework  between 
programming periods.  

1.4  The way forward: a single investment support instrument 
The  Reflection  Paper  on  EU  Finances52 proposes  the  following:  “[o]ne  option  to  address  this 
could  be  […]  integration  [of  financial  instruments]  within  a  single  fund  which  would  provide 
loans, guarantees and risk sharing instruments — blending with EU grants where appropriate — 
depending on the project  and windows for  the different policies (such as  research, innovation, 
climate  action,  environment,  SME  support,  infrastructure,  including  for  energy  efficiency)  to 
cater for different objectives".  

The  Commission  Communication  further  clarifies  that  "[o]ne  option  to  improve  the  efficiency 
and  impact  of  instruments  aiming  at  investment  support  in  the  EU  could  be  their  integration 
within a single investment support instrument. This would further reinforce the European Fund 
for Strategic Investments and have a positive impact on investment levels, economic growth and 
employment across the EU"53. 
The European Parliament54 "considers the option of a single fund that would integrate financial 
instruments at EU level that are centrally managed under such programmes as the Connecting 
Europe  Facility  (CEF),  Horizon  2020,  COSME,  Creative  Europe  and  the  Employment  and 
Social  Innovation  programme  (EaSI)  on  the  one  hand  and  the  European  Fund  for  Strategic 
Investments (EFSI) on the other, a proposal to be discussed further". 

The European Parliament "is of the opinion, however, that such simplification should not result 
in the replacement of grants by financial instruments and must not lead to a sectorialisation of 
EU  programmes  and  policies,  but  should  guarantee  a  cross-cutting  approach  with 
complementarity  at  its heart.  [It  also] calls  for  a  far-reaching  harmonisation  of  rules  with  the 
aim of creating a single rulebook for all EU instruments." 

Based on the above consideration it is proposed to set up a single investment support instrument 
-  the  InvestEU  Fund.  It  will  be  a  centrally  managed  instrument/framework  for  financing  EU 
investment priorities. It will integrate under a single framework all centrally managed financial 
instruments and the EFSI budgetary guarantee.  

2  THE OBJECTIVES  

2.1  General objectives of InvestEU Programme 

As  single  investment  support  scheme  for  internal  Union  policies,  the  InvestEU  Programme  is 
both a policy instrument and a delivery tool. As a policy instrument, the InvestEU Programme 
general  objective  is  to  support  EU  policy  priorities  by  financing  investment  operations  that 
contribute to: 

 

the competitiveness of the Union, including innovation and digitisation; 

52 Reflection  paper  on  the  future  of  EU  finances",  June  2017,  https://ec.europa.eu/commission/publications/reflection-paper-
future-eu-finances_en  
53https://ec.europa.eu/commission/sites/beta-political/files/communication-new-modern-multiannual-financial-
framework_en.pdf, COM(2018) 98 final 
54http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+MOTION+B8-2017-0565+0+DOC+XML+V0//EN  

16 

 
                                                 
 

 

 

the sustainability of the Union economy and its growth;  

the social resilience and inclusiveness of the Union; and 

the  integration  of  the  Union  capital  markets  and  the  strengthening  of  the  Single  Market, 
including  solutions addressing the fragmentation  of the Union capital markets,  diversifying 
sources of financing for Union enterprises and promoting sustainable finance.  

The objective is to mobilise public and private investment operations within the EU addressing 
market  failures  and  investment  gaps  that  hamper  the  achievement  of  EU  goals  regarding 
sustainability,  competitiveness  and  inclusive  growth.  Underpinned  by  an  EU  guarantee,  the 
InvestEU  Fund  will  contribute  to  the  modernisation  of  the  EU  budget  and  will  increase  the 
impact of the EU budget by "doing more with less".  

The  InvestEU  Programme  should  have  the  capacity  to  shape  the  EU  strategy  to  tackle  the 
subdued investment activity in Europe. With this, it should increase the competitiveness of the 
Union  and  contribute  to  the  economic  growth  and  job  creation.  By  diversifying  the  sources  of 
funding  and  promoting  long  term  and  sustainable  finance,  the  InvestEU  Programme  will 
contribute  to  the  integration  of  European  capital  markets  and  the  strengthening  of  the  Single 
Market.  As  an  EU  wide  resource  pooling  financial,  market,  technical  and  policy  expertise,  the 
InvestEU Fud shall also be a catalyser for financial innovation at the service of policy objectives.  

2.2  Specific objectives  

In particular the InvestEU Programme would aim at the following specific objectives: 

 
 

 

 

to promote financing and investment operations supporting sustainable infrastructure; 
to  promote  financing  and  investment  operations  supporting  research,  innovation  and 
digitisation; 
to  increase the  access to  and the availability  of  finance  for  SMEs  and, in  duly  justified 
cases, for small mid-cap companies; and 
to  increase  the  access  to  and  the  availability  of  finance  to  social  enterprises,  promote 
financing and investment operations supporting social investment and skills and develop 
and consolidate social investment markets. 

As  a  delivery  tool,  the  InvestEU  Programme  aims  at  implementing  financial  instruments  and 
budgetary guarantees more efficiently, achieving economies of scale, increasing the visibility of 
EU  action  and  enhancing  the  reporting  and  accountability  framework  applicable  to  those 
instruments. The proposed structure aims at simplification, increased flexibility, and removal of 
potential overlaps between seemingly similar EU support instruments. 

The  InvestEU  Programme  interventions  will  be  channelled  through  four  thematic  policy 
windows,  each  one  entailing  two  compartments,  one  at  EU  level  and  one  under  ESIF,  the 
Member State compartment (see section 3.1,): 

  Sustainable infrastructure;  

  Research, innovation and digitalisation;  

  Small and medium-sized enterprises; and  

  Social investment and skills.  

In  addition,  the  InvestEU  Programme  will  include  the  InvestEU  Advisory  for  project 
development and advisory support throughout the investment cycle to foster the origination and 
development of projects. The TA support will be provided in the InvestEU policy areas and will 

17 

 
also  ensure  a  single  point  of  access  for  final  beneficiaries  including  project  promoters  and 
intermediaries. 

These  general  and  specific  objectives  will  be  taken  into  account  in  section  5  (Delivery 
mechanism)  and  section  6  (Performance  measurement).  The  above  general  and  specific 
objectives are translated into operational objectives for each policy area, as detailed below. 

2.2.1  Sustainable Infrastructure Window 

The objective  of the investment support  from the InvestEU Fund under this window would be 
the  provision  of  finance  to  sustainable  infrastructure 55  in  areas  such  as  transport,  energy 
(including  energy  efficiency),  network  infrastructure  (smart  grids,  energy  storage,  e-mobility), 
broadband,  environmental  related  sectors  (e.g.  waste,  water,  air,  circular  economy),  innovative 
sectors  (such  as  green  infrastructure  and  other  natural-capital  related  projects),  and  emerging 
priorities in areas such as urban mobility and digital service (see scoping paper on Sustainable 
Infrastructure available in Annex 4).  

Support from the InvestEU Fund under this policy window will:  

  Orient  capital  flows  towards  sustainable  infrastructure  investment,  in  order  to  achieve 

sustainable and inclusive growth56; 

  Stimulate investment needed to respond to the challenge of climate change mitigation and of 
meeting the greenhouse gas emission reduction commitments by 2030 taken by the EU under 
the Paris agreement;  

  Contribute  to  coordinated  investments  in  infrastructure  projects  involving  several  Member 

States (cross-border projects), in particular the financing of trans-European networks; 

  Address emerging market needs, new technological developments and priorities; 

  Promote interoperability; 

  Foster cross-sectoral synergies between energy, transport and digitalisation; and 

  Provide assistance to continue to build more capacity for developing projects, platforms and 

programmes. 

Sustainability proofing of infrastructure investments 

Long-lifetime infrastructure should be resilient to potential effects of climate change and other 
environmental challenges.  

Climate  change  adaptation  and  mitigation  considerations  need  to  be  integrated  throughout  the 
project cycle. Projects shall be subject to climate proofing, which entails two components: first, 
ensuring  the  resilience  to  the  current  and  future  adverse  impact  of  climate  change  through  a 
climate vulnerability and risk assessment and integration of relevant adaptation options; second, 
accounting for the cost of greenhouse gas emissions in the cost-benefit analysis facilitating due 
consideration  of  low-carbon  options.  Major  projects  –  funded  by  the  European  Regional 

55  Sustainable  and  resilient  infrastructure  integrates  environmental,  social  and  governance  (ESG)  aspects  into  a  project’s 
planning,  building  and  operating  phases  while  ensuring  resilience  in  the  face  of  climate  change  or  other  shocks  such  as  rapid 
migration,  natural  disasters  or  economic  downturns.  Service  needs  will  be  met  in  a  manner  that  minimizes  or  reverses 
environmental damage, improves social equality and does not waste resources.  
(UNEP & Global Infrastructure Basel Foundation; http://unepinquiry.org/wp-
content/uploads/2016/06/Sustainable_Infrastructure_and_Finance.pdf)  
56 See also Commission Action Plan: Financing sustainable growth, COM(2018)97, 08.03.2018 

18 

 
                                                 
Development  Fund  and  Cohesion  Fund  in  the  2014-2020  programming  period  –  are  already 
subject to climate proofing57. 

Factors  such  as  the  increase  in  weather  related  risks  caused  by  climate  change  should  also  be 
taken  into  account  when  making  investment  decisions.  In  addition,  other  environmental 
challenges  other  than  deriving  from  climate  change  per  se  should  be  addressed  (such  as 
biodiversity loss, air, water and soil pollution, due to fragmentation and degradation of land and 
unsustainable land-use,).  

For  investments  in  new  sustainable  infrastructure,  negative  externalities  related  to  climate  and 
other  environmental risks need  to  be taken into account  in  the overall project risk assessments 
and mitigation strategies during planning and development phases.  

The  sustainability  proofing  of  investments  will  need  to  reflect  the  latest  developments  in  the 
field, notably the progress made to develop an EU taxonomy under the Commission Action Plan 
on Financing Sustainable Growth58. 

2.2.2  Research, Innovation and Digitalisation Window 

The  Research,  Innovation  and  Digitalisation  Window  will  aim  to  mobilise  significant  R&I 
investments to deliver higher productivity, economic growth and better living standards. It will 
stimulate all innovation: from radical to incremental.  

The specific objectives of the Research, Innovation and Digitalisation window will aim to:  

 

Improve access to and availability of finance for R&I projects adapted to the different needs 
and risk appetite of potential final beneficiaries at various stages of the innovation cycle; 

  Create  critical  mass  of  financing  to  stimulate  industrial  scale  demonstration  of  innovative 
technologies,  disruptive  innovation  and  support  high-risk  investments  in  R&I  and  new 
technologies to boost the EU’s global competitiveness; 

  De-risk investment in R&I and help upscale and deploy innovative solutions at commercial 

scale; 

  Support  innovation  diffusion  and  transfer  established  solutions  to  new  markets  to  improve 

innovation performance across the EU;  

  Address  investment  gaps  through  supporting  new  Financial  Products  and  innovative 
financing solutions such as crowd-lending or hybrid instruments and cross-border financing 
options; 

  Foster  the  transfer  of  best  practices  between  financial  intermediaries  with  a  view  to 
encourage  the  emergence  of  a  broad  product  offering  supporting  R&I  activities  and  R&I-
intensive entities; and 

  Provide  technical  assistance  to  improve  investment  readiness  and  bankability  of  R&I 
projects,  including  deep  tech 59 companies,  middle  market  firms,  universities,  technology 
transfer offices, public research organisations and large research infrastructures. 

57See guidance on the climate change related requirements for major projects in the 2014-2020 programming period: European 
Commission, "Climate change and major projects" 2016: https://ec.europa.eu/clima/sites/clima/files/docs/major_projects_en.pdf  
58 Communication from the Commission, Action Plan: Financing Sustainable Growth, COM(2018)97, 08.03.2018  
59  "Deep  tech"  refers  to  companies  of  any  sector  that  are  "founded  on  a  scientific  discovery  or  meaningful  engineering 
innovation". 

19 

 
                                                 
2.2.3  SME Window  

The main objective of the SME Window is to increase the access to and availability of finance 
for European SMEs, in support of employment creation and economic growth.  

This  could  be  achieved  by  providing  support  for  categories  of  SMEs  for  which  the  access  to 
finance  problem  is  the  most  pronounced  –  start-ups,  younger  and  smaller  companies,  SMEs 
lacking  sufficient  collateral  to  realise  their  investment  projects  linked  to  the  growth  of  the 
company,  and  innovative  companies.  At  the  same  time,  the  SME  window  would  also  aim  to 
promote the implementation of specific policy priorities of the EU that do not receive sufficient 
level  of  support  from  the  private  sector.  For  example,  the  areas  of  internationalisation, 
digitisation or the uptake of innovation, and in sectors such as innovative SMEs and the cultural 
and creative industries. Furthermore, the capacity of financial intermediaries to work with SMEs, 
e.g.  in  the  cultural  and  creative  sectors,  needs  to  be  improved  so  that  they  can  fully  play  their 
market  role  of  channelling  private  investment  resources  to  these  areas  and  thus  increase  their 
growth  potential.  The  SME  window  could  also  contribute  to  supporting  farm  investments  for 
restructuration and modernisation, as well as rural entrepreneurship. 

The  SME  Window  will  also  support  the  Capital  Markets  Union  strategy  by  promoting  more 
diversified  sources  of  funding  and  overcoming  fragmentation  of  capital  markets  as  a  means  to 
increase the ability of SMEs to withstand economic downturns and making the financial system 
more resilient during economic shocks.  

The  EU-level  debt  products  should  focus  on  SMEs  that  would  not  receive  support  from  the 
market due to the perceived higher risk or the lack of collateral. Where justified, more dedicated 
support may be provided for SMEs or organisations or, were justified to small  mid-caps, for a 
specific sector or a specific policy orientation. 

Concerning equity in particular, the aim would be to increase private equity investments in R&I-
intensive  or  high-risk  SMEs  and  small  midcaps  and  tackle  market  gaps  that  are  not  properly 
addressed by national and regional programmes. The strengthening of the EU equity industry's 
ability  to  attract  institutional  and  other  investors  to  operate  on  a  pan-European  basis  and  to 
provide European exit strategies for leading growing companies will also be targeted.  

To ease high growth  SMEs to  scale up beyond the private equity  markets notably when going 
public, the window could also support and facilitate SMEs seeking a listing on a SME Growth 
Market60 – Multilateral Trading Facility created by MiFID II, aiming to improve the functioning 
of the entire funding escalator of the SMEs and providing fast and profitable exit opportunities 
for venture capital and private equity investors. 

It is essential to ensure the complementarity and EU-added value of the support by focusing it on 
market  gaps  which  are  not  adequately  addressed  through  national  or  regional  programmes.  A 
possibility to avoid such overlaps would be that support targets especially those countries where 
the access to finance problem is most pronounced and not addressed nationally. 

60 In order to qualify as an SME Growth Market, at least 50% of the issuers whose financial instruments are traded on an SME 
growth market shall be SMEs, defined by MiFID II as companies with an average market capitalisation of less than EUR 200 
million. 

20 

 
                                                 
2.2.4  Social, skills and human capital Window 

The European Pillar of Social Rights recognises among its core principles the right to education, 
training  and  lifelong  learning  as  well  as  to  social  protection  including  childcare,  housing, 
healthcare and long-term care. 

The general objective of the Social Investment and Skills Window would be to support private 
and  public  investment  in  social  infrastructure  in  areas  such  as  education,  social  housing,  and 
health,  as  well  as  to  develop  and  consolidate  the  nascent  market  structures  underlying  the 
European social economy and social enterprises61 and the training and education sectors, both in 
terms of financing support and technical assistance/capacity building.  

Taking  account  of  and  providing  leverage  to  policy  instruments  in  support  of  the  social 
dimension of the EU in the next MFF and against the backdrop of the European Pillar of Social 
Rights, support from this Window will aim to: 

  Consolidate  the  nascent  market  structures  underlying  the  European  social  economy 

organisations and social enterprises ecosystem; 

 

Increase  access  to,  and  the  availability  of,  microfinance  for  vulnerable  persons  (e.g. 
unemployed, youth, elderly, migrants) and micro-enterprises, social enterprises;  

  Build up a stronger capital market for social infrastructure promoters investing in areas such 
as education (including childcare), social housing, and health (including long-term care); 

  Support human capital investments (both demand and supply side), for students and workers 
and other persons in need of initial training, reskilling and upskilling, as well as for education 
and training providers, start-ups and companies at large; 

  Support the Commission’s future action in the field of social enterprises at EU level62; and 
  Support the emergence and consolidation of social investment markets by boosting both the 
supply  and  demand  sides;  supporting  investment  readiness  and  capacity  building  of  public 
authorities  and  of  intermediaries  active  in  the  micro-finance,  social  economy  organisations 
and social enterprise finance sector. 

2.3  Simplification 

Suboptimal  investment  situations  are  currently  addressed  through  a  heterogeneous  and 
fragmented  portfolio  of  EU  financial  instruments  and  the  EFSI.  These  all  come  with  different 
legal, administrative, and operational arrangements that result in unnecessary complexity.  

The aim of the InvestEU Fund would be to simplify the EU investment support by constructing a 
single  framework  that  would  help  to  reduce  the  complexity.  Due  to  a  lower  number  of 
agreements  under  a  single  set  of  rules,  the  InvestEU  Fund  will  simplify  the  management  of 
investment  support  instruments,  the  governance  and  the  final  beneficiaries'  access  to  the  EU 
support. 

61 "Social enterprise" refers to businesses which have an explicit primary objective to generate positive social or societal impact, 
independently  of  their  legal  form.  They  are  part  of  the  "Social  economy"  which,  as  a  broader  concept,  also  includes  all  co-
operatives, mutual societies, foundations and associations and which are based on principles such as the primacy of people over 
capital, the democratic control by the membership, the  reinvestment of the surplus to carry out its societal objectives or to the 
interest of its members, and an autonomous management. Altogether the social economy is estimated to represent 10% of jobs 
and 8-10% of EU GDP. 
62 In  its  2016  Start-up  and  Scale-up  initiative  the  Commission  identified  five  priorities  for  further  actions,  drawing  form  the 
experience  of  the  2011  SBI  initiative,  the  Council  conclusions  of  7  December  2015  and  the  recommendations  of  the  Expert 
Group on Social Entrepreneurship (GECES) as well as the conclusions of the evaluations conducted so far. 

21 

 
                                                 
Moreover,  as  the  InvestEU  Fund  covers  all  investment  support  policy  needs,  this  would  allow 
streamlining and harmonising the reporting requirements and performance indicators.  

2.4  Enhanced flexibility 

EU  investment  support  instruments  address  market  gaps  and  suboptimal  investment  situations. 
However, investment support needs are constantly evolving due to changes in technology, laws 
and  rules,  policy  priorities,  economic  cycles,  and  risk  appetite  of  financiers  and  investors.  It 
should  thus  be  possible  to  modify  easily  the  products.  Imposing  strict  and  rigid  rules  and 
mechanisms  would  negatively  affect  beneficiaries.  This  could  have  negative  repercussions  on 
investment  levels,  growth  prospects,  employment,  as  well  as  on  achievement  of  policy 
objectives.  

The EU investment support needs to respond quickly to these changes and requires flexibility in 
the following areas: 

  Ability to align existing financial products to new market conditions. This implies an ability 
to change particular investment guidelines, criteria as well as the amount of support during 
implementation; 

  Possibility to discontinue underperforming financial products or create new ones. This would 
also include a possibility for the Member States to withdraw contributions from a financial 
product set up under the InvestEU Fund Member State compartment (see section 3.2) under 
certain principles; 

  Ability to reallocate resources between products within a specific policy window; 

  Possibility  to  reallocate  a  portion  of  resources  among  policy  windows.  Any  reallocation  of 
resources between windows could be limited to [15% ] of the guarantee amount of any of the 
windows; 

  Possibility to easily combine or blend, when appropriate, support under the InvestEU Fund 

with grants from other EU programmes; 

 

It should be possible to design products with specific risk coverage rates (e.g. level of first 
loss piece or guarantee rates) for particular market failures; and 

  The  Commission  should  also  have  the  flexibility  to  grant  the  EU  guarantee  to  several 

implementing partners that fulfil the required eligibility criteria (see section 5.3).  

22 

 
 
 
 
3  PROGRAMME STRUCTURE AND PRIORITIES 

The  current  experience  with  the  EU  financial  instruments  and  the  EFSI  budgetary  guarantee 
demonstrated a need for simplification, streamlining and better coordination of EU’s investment 
support  instruments  during  the  next  MFF.  Experience  with  the  EFSI  also  revealed  significant 
benefits and efficiency gains inherent in using, where possible, a budgetary guarantee instead of 
traditional financial instruments.  

It  is  therefore  proposed  to  set  up  a  single  investment  support  instrument,  the  InvestEU  Fund, 
underpinned by a budgetary guarantee. It will be a centrally managed framework for financing 
EU  investment  priorities.  It  will  integrate  under  a  single  framework  all  centrally  managed 
investment  support  instruments  and  the  EFSI  and  will  allow  to  also  cover  new  and  emerging 
priorities. 

The budgetary guarantee underlying the InvestEU Fund will be allocated to four thematic policy 
windows  as  indicatively  shown  in  the  table  below.  The  split  is  based  on  policy  prioritisation, 
absorption  capacity,  and  the  size  of  the  investment  gasps.  The  InvestEU  Fund  will  however 
foresee a possibility to reallocate a limited portion of resources among policy windows (see 2.4).  

The InvestEU Fund assumes a slight increase in the EU budget from EUR 14.5 billion during the 
current MFF (see Annex 5) to 15.2 billion allocated or an increase of almost 5%. The InvestEU 
Fund is however expected to increase the overall available budgetary guarantee much more. The 
available  EU  support  would  increase  by  21%  to  EUR  38  billion  and  the  total  expected 
investment  mobilised  by  16.3%  to  EUR  650  billion  (as  illustrated  in  the  table  below).  The 
increase of the available EU support is due to a shift from the current mix of FIs and the EFSI 
(EU) guarantee to the use of a single budgetary guarantee that is a much more efficient delivery 
mechanism. 

Table 2 - Overview of budget allocations and estimated investments to be mobilised in the 
current MFF and under the InvestEU Fund  

2014-2020 

2021-2027  

(EUR m) 

(Baseline: EFSI + FIs) 

(InvestEU Fund) 

Weight of windows                                                                                                                                    

(based on the 
budgetary 
guarantee/FIs) 

Budgetary 
guarantee 
/ FIs 

Investment 
mobilised 

Budgetary 
guarantee 

Investment 
mobilised 

2014-
2020 

2021-
2027 

12.215 

216.370 

11.500 

185.000 

39% 

30% 

Thematic Policy 
Windows 

Sustainable 
Infrastructure 
Research, Innovation 
and Digitisation 

Social, Investment and 
Skills 

Total 

EU Budget 

7.560 

148.250 

11.250 

200.000 

SMEs 

9.413 

171.848 

11.250 

215.000 

24% 

30% 

7% 

30% 

30% 

10% 

2.233 

26.520 

4.000 

50.000 

31.421 

562.988 

38.000 

650.000 

100%  

100%  

14.521     

15.200     

Source: Commission services, 2018 (indicative split in current prices) 

23 

 
 
  
  
  
The fact that the budgetary guarantee is set to increase more (21%) than the expected investment 
mobilised (16.3%) is explained by the following InvestEU Fund characteristics: 

  Compared to the EFSI, it would include more targeted products oriented on delivering more 

additionality and having more policy value added; 

  The InvestEU Fund assumes a much higher share for the thematic products that are more 

budget consuming and also display a lower multiplier; and 

  The InvestEU Fund would also have more implementing partners and there is therefore a 

need for a more cautious estimate of the provisioning rate and the multiplier. 

The funding priorities for each policy window will be developed in investment guidelines. These 
investment guidelines will determine some basic principles of intervention, such as additionality 
criteria,  alignment  of  interest,  proportionality,  good  market  practice,  sustainability,  support  to 
new investment (no refinancing), sectoral and geographic balance, leverage and multiplier effect.  

Figure 7 - Correspondence between existing instruments & proposed InvestEU Windows 

Source: Commission services  

For each policy window, the guidelines would furthermore specify: 

  Policy  areas  for  intervention  –  this  would  define  in  more  detail  the  areas/sectors  of 
intervention  responding  to  the  specific  policy  objectives  and  sectors  identified  under  the 
InvestEU Programme regulation;  

  Type  of  financial  products  envisaged  to  serve  the  different  objectives  identified  in  the 

regulation and the policy areas, including risk and revenue sharing arrangements;  

  Blending needs with other EU programmes; 

  Monitoring  and  performance  framework  to  be  put  in  place  to  measure  the  impact  of  the 

financial products envisaged. 

24 

 
 
For  each  window,  a  Policy  Board,  composed  of  representatives  of  the  lead  policy  Directorate-
Generals  and  a  number  of  other  relevant  Directorate-Generals,  will  define  the  strategy  of  the 
policy  window,  in  line  with  the  investment  guidelines  and  design  concrete  financing  products 
(see section 3.4 for more details on the governance of the InvestEU Fund). 

The InvestEU Fund will also allow for a voluntary contribution of shared management resources 
where this delivers on ESIF policies i.e. Member States would use InvestEU Fund as the delivery 
mechanism  for  part  of  their  ESIF  allocation.  This  would  be  used  under  the  InvestEU  Fund 
framework but would be earmarked for investment support in specific Member States.  

The InvestEU Fund would also be accompanied by the InvestEU Advisory providing technical 
assistance  support  building  on  existing  TA  initiatives  (EIAH,  ELENA,  InnovFin  Advisory) 
which aims at preparing, developing and implementing a robust investment project pipeline. 

Furthermore,  the  InvestEU  Fund  will  enable  additional  contributions  from  other  EU 
programmes, including those outside the EU budget, where relevant and appropriate (e.g. the EU 
ETS Innovation Fund63). 

The InvestEU Fund main characteristics include: 

  A single structure, directly communicated to financial intermediaries, project promoters and 

final beneficiaries in search of financing; 

  Flexibility measures that will enable the InvestEU Fund to quickly react to market changes 

and policy priorities that evolve over time;  

  The  ability  to  deliver  sector-specific  instruments  to  support  particular  market  failures  e.g. 

Green Shipping, energy demonstration projects, natural capital;  

 

Increased  leverage  and  more  efficient  use  of  budgetary  resources  through  the  use  of  a 
budgetary  guarantee.  Compared  to  financial  instruments,  budgetary  guarantees  freeze  less 
budgetary  resources  due  to  limited  provisioning  compared  to  the  level  of  financial 
engagement and the overall investment mobilised;  

  Simplified and focused offer of investment support instruments targeting the main EU policy 
objectives.  Such  offer  would  also  enable  combining  grants  and  finance  from  different  EU 
programmes, or EIB conventional lending or private finance;  

  An integrated governance and implementation  structure that enhances  internal coordination 
and strengthens the position of the Commission towards implementing partners. This would 
lead  to  management  cost  efficiencies,  avoidance  of  duplications  and  overlap  and  increased 
visibility towards private investors; 

  Simplified reporting, monitoring, and control requirements; due to the single framework, the 

InvestEU Fund will foresee integrated and simplified monitoring and reporting rules;  

  Better  complementarity  and  ease  of  combination  between  programmes  managed  centrally 

and those under shared management;  

  A  possibility  for  Member  States  to  channel  shared  management  allocations  through  the 

InvestEU Fund (in the Member State compartment);  

63 The Innovation Fund is established by the Article 10 (a) 8 of the ETS Directive (EU) 2018/410. 

25 

 
                                                 
  Possibility  to  contribute  additional  resources,  if  relevant  and  appropriate,  from  other  EU 
programmes  for  specific  policy  objectives  such  as  low-carbon  innovation  in  energy,  CCS 
(Cultural and Creative Sectors), and energy intensive industry supported under the EU ETS 
Innovation Fund; and 

  Association  of  the  InvestEU  Advisory  to  the  InvestEU  Fund  in  order  to  support  the 

development and implementation of a pipeline of bankable projects.  

Furthermore,  the  single  integrated  structure  of  the  InvestEU  Fund  offers  the  opportunity  to 
address the shortcomings identified in the lessons learnt section in the following way: 

  Better  coordination,  single  approach  to  implementing  partners.  Instead  of  a  multitude  of 
delegation  agreements  and  different  provisions  in  different  delegation  agreements  (even 
when  addressing  the  same  issue),  the  InvestEU  Fund  will  feature  a  single  agreement  per 
implementing  partner.  The  governance  structure,  comprising  all  relevant  DGs,  will  ensure 
effective coordination among instruments. 

  Competition among implementing partners. Under the current MFF, most intervention under 
budgetary guarantees and financial instruments for internal policies is operated via the EIB 
Group. The InvestEU Fund opens up the possibility for other partners or consortia to enter in 
agreements directly with the EU, ultimately increasing the choice of policy implementation 
options for the EU.  

  Additionality  and  EU  added  value.  In  response  to  recommendations  from  evaluations  and 
audits  of  the  EFSI  and  financial  instruments,  the  InvestEU  Fund  will  aim  to  strengthen 
requirements on additionality and EU added value of the intervention. 

  Stronger  verification  of  compliance  with  policy  objectives,  to  balance  the  demand-driven 
approach at the level of individual operations. The scrutiny of the EU policy consistency of 
the  financed  projects  will  be  intensified  due  to  the  work  of  the  Commission  staff  in  the 
Policy Boards and the Project Team. 

Table 3 - From the EFSI and financial instruments (2014-2020) to the InvestEU Fund 

InvestEU (Next MFF) 

Improvement compared to the current MFF 

Shift towards budgetary 
guarantees by default 

Less budgetary resources to achieve the same objectives. 

A single budgetary guarantee 

A single fund: common rules, 
consistent products, single voice 

Flexibility 

Efficiency gains  

More efficient due to economies of scale and diversification 
compared to several ring fenced budgetary guarantees: less 
provisioning needed for the same level of protection from the 
EU budget. 

Overcomes fragmentation, overlaps and inconsistencies. 

Higher capacity to redeploy resources and to develop new 
products according to the demand. 

For financial intermediaries and final beneficiaries: single set 
of rules and reporting requirements, cross-reliance on audits.  

For implementing partners: single contractual framework.  

For the EU Budget, risk remuneration and limited fees.  

26 

 
 
InvestEU (Next MFF) 

Improvement compared to the current MFF 

Budgetary guarantees under 
ESIF 

Higher impact with fewer resources. 

Upfront coordination between 
the EU centrally managed 
instruments and ESIF levels 

Better respect of the subsidiarity principle.  

More efficient allocation of budgetary resources. 

Qualitative upgrade of interventions. 

Synergies. 

Lower need for combinations, but when needed: single set of 
rules. 

Non-exclusive access to the EU 
guarantee 

Diversification of pipelines and wider coverage of policy 
objectives. Enhanced coordination and negotiation capacity.  

A structured and streamlined 
framework for blending 

Increased visibility, enhanced 
accountability 

Simplification. 

Single brand. More effective democratic control. 

Coherent framework for 
technical assistance 

Technical assistance will be streamlined under a single 
framework  

3.1 

InvestEU Fund structure 

The  InvestEU  Fund  aims  at  achieving  a  balance  between  a  lean  and  flexible  structure  with 
simple rules and the need to cater for specific investment support needs in different policy areas 
and for different types of beneficiaries. While there are some trade-offs to  be  made,  these  two 
objectives are not mutually exclusive.  
Lessons learned from the EFSI’s structure and in particular the use of windows64suggest that an 
organisation into policy windows achieves a good balance between simplicity, streamlining and 
ability to target specific policy needs. 

The  windows  will  be  used  to  deploy  financing  products  (e.g.  debt,  equity)  as  well  as  thematic 
sub-instruments and pilot initiatives targeting high risk and first-of-a-kind projects, as currently 
done under certain financial instruments (e.g. InnovFin Energy Demo Projects, Natural Capital 
Financing Facility, SME guarantees) and provide for a more comprehensive guarantee coverage.  

The number and scope of InvestEU Fund’s policy windows would need to achieve the following 
objectives: 

  Simplicity  – there should be  only  a  handful of policy windows to  avoid fragmentation and 

confusion among implementing partners and beneficiaries;  

  Target specific EU policy priorities and respond to market needs that can be addressed with 

similar financial products; and  

  The  structure  should  minimise  potential  scope  overlaps  between  windows  through  simple 

and pragmatic demarcation rules. 

64 Under  the  EFSI,  investment  support  is  provided  under  two  windows:  Infrastructure  and  Innovation  Window  and  SME 
Window.  

27 

 
                                                 
Based  on  the  main  policy  challenges  and  their  nature  (see  section  1.2),  it  is  proposed  that  the 
InvestEU Fund includes the following four windows: (i) sustainable infrastructure, (ii) research, 
innovation and digitalisation, (iii) SMEs, and (iv) social investment and skills and human capital. 

The  InvestEU  Fund  budgetary  resources  will  be  distributed  among  the  four  windows.  This 
allocation will be based on the size of the respective market gaps and experience with the current 
financial instruments and the EFSI. An additional argument to be taken into consideration is the 
absorption capacity by implementing partners, financial intermediaries and final beneficiaries.  

The  InvestEU  Advisory/TA  support  will  be  allocated  among  policy  windows  according  to 
identified needs and market gaps. Moreover, limited resources would be kept outside the policy 
windows  at  the  InvestEU  Fund  level  to  support  initiatives  like  a  single  entry  point  and  cross-
policy advisory products and would ensure flexibility for emerging needs.  

3.2  Member State compartments 

The  EU  budget  implemented  through  shared  management  with  Member  States  also  deploys 
financial instruments to address local market failures or sub-optimal investment situations. The 
policy objectives of the EU-level and investments support instruments under ESI Funds are not 
identical;  the  former  focus  on  EU-wide  and  the  latter  on  regional  or  national  suboptimal 
investment  situations.  However,  the  experience  has  demonstrated  the  need  to  increase 
complementarity and ease of combination between the two types of support mechanisms.  

In the current programming period, not many Member States have channelled part of their ESIF 
allocations through EU level financial instruments. The InvestEU Fund will offer a compelling 
opportunity to increase effectiveness and impact of ESI Funds for investment support in a given 
Member  State  through  the  use  of  a  budgetary  guarantee.  The  same  objective  of  budgetary 
efficiency that recommends the shift from financial instruments to budgetary guarantees at EU 
level (see section 5.2) applies to ESIF.  

Member  States  will  have  the  possibility,  on  a  voluntary  basis,  to  channel  part  of  their  ESIF 
resources  through  the  InvestEU  Fund.  For  this  purpose,  the  InvestEU  Fund  structure  would 
include  a  Member  State  compartment  under  each  window.  However,  the  possibility  for  the 
Managing  Authorities  to  implement  their  programmes  partly  through  tailor-made  financial 
instruments including in combination with InvestEU Fund would be kept in the post-2020 legal 
framework. 

The  EU  would  be  the  guarantor  (otherwise,  in  most  convergence  Member  States  the  guarantee 
would be weaker and, thus, financially less effective) and the EU budget (ESIF) would provide 
the provisioning against expected losses, managed in the common provisioning fund established 
by Article 212 of the revised Financial Regulation (FR), and Member States would assume the 
contingent liability. No national co-financing would be required. The Commission would select 
the  implementing  partner,  among  those  eligible  for  indirect  management  according  to  Article 
154(4)  FR  and  which  have  expressed  an  interest  to  become  an  implementing  partner  for  the 
Member State compartment. The Commission would then sign a guarantee agreement providing 
the EU guarantee to the selected implementing partner. 

This proposal would bring the following benefits for Member States and for the EU budget: 

  Wider impact of the EU budget on investment and economic and social welfare with fewer 

budgetary resources. 

28 

 
  No  national  co-financing  required  by  the  Member  State  and  very  low  probability  of  any 
disbursement  related  to  the  contingent  liability.  Any  provisioning  left  at  the  end  of  the 
budgetary guarantee comes back to the Member State. 

  Predefined scheme and products provided by the InvestEU Fund, which simplify for Member 
States the design of effective market instruments  (or provides them with  a product they do 
not  have  the  expertise  to  develop)  and  facilitate  the  switch  from  grants  towards  market 
instruments; it also reduces the scope of the ex-ante assessment to be carried out by Member 
States. Products designed for the entire window may need to be adjusted to address specific 
policy issues.    

  As  the  management  model  for  the  ESIF  compartment  is  indirect  management,  not  shared 
management, the choice by the Member States of the implementing partner does not need to 
follow public procurement rules. 

  The  management  role  of  the  Commission  will  alleviate  the  administrative  burden  for 

Member States and will ensure spread of good practices across the EU. 

  A simplified State Aid compliance mechanism would be put in place. 

  Member States will have the possibility to withdraw from InvestEU Fund their contributions 

under certain principles. 

  The  InvestEU  Fund  would  provide  central  performed  monitoring  and  evaluation  activities, 
including centralised reporting. Reporting systems will ensure sufficient information flows to 
the Member States.  

Respective scopes of the EU level and the Member State compartments 

The  proposed  structure  with  two  compartments  in  each  window  should  allow  a  better 
complementarity and division of labour between the two levels and a more effective application 
of the principle of subsidiarity. In addition, the two compartments within each window will share 
the  same  InvestEU  Fund  rules,  which  would  allow  a  clearer  and  simpler  framework  for 
combining different sources of EU funds.  

The scope of the EU level compartment would comprise: 

 

Investments supporting EU policy priorities addressed at EU level; 

  EU wide market failures and investment gaps; and 

  The design, development and EU wide market testing of innovative financial products, and 
the  corresponding  ecosystems  to  spread  them,  for  new  or  complex  market  failures  and 
investment gaps. 

The Member State compartment would address country specific market failures and investment 
gaps ensuring a critical mass and a more efficient geographical concentration of resources. 

Country specific market failures and investment gaps widespread among Member States would 
be addressed in a complementary manner, whereby the EU level compartment would ensure the 
possibility  to  address  the  market  failure  in  all  Member  States,  while  the  Member  State 
compartment  would  allow  a  more  effective  geographical  concentration  of  resources  in 
accordance with the needs of each Member State.  

During  the  InvestEU  Fund  mid-term  review  the  Commission  will  assess  whether  certain 
instruments  developed  and  tested  at  EU  level,  but  that  address  market  failures  and  investment 

29 

 
 
gaps that have a local dimension, could better be deployed at Member State level in line with the 
principle of subsidiarity.  

3.3  EU added value 

The EU long-term goals regarding sustainability, competitiveness and inclusive growth require 
significant investments in different policy areas. This includes, inter alia, new models related to 
mobility, renewable energies, energy efficiency, natural capital, innovation, digitalisation, skills, 
social infrastructure, circular economy, climate action, and small businesses growth and creation.  
Renewed  efforts  are  needed  to  tackle  persisting  market  fragmentation 65 and  market  failures 
caused  by  private  investors'  risk-averseness,  the  public  sector's  limited  funding  capacity  and 
structural inefficiencies of the investment environment. Member States cannot sufficiently bridge 
those investment gaps alone. 

An intervention at EU level ensures that a critical mass of resources can be leveraged so as to 
maximise the impact of investment on the ground. Intervention at EU level can better attain the 
objectives pursued mainly because of the disparities in Member States' fiscal capacity to act. In 
addition, the EU level provides for economies of scale in the use of innovative financial products 
by  catalysing  private  investment  in  the  whole  EU  and  making  best  use  of  the  European 
institutions  and  their  expertise  for  that  purpose.  The  EU  intervention  also  provides  access  to  a 
diversified portfolio of European projects, thereby catalysing private investment, and allows for 
the  development  of  innovative  financing  solutions  which  can  be  scaled  up  or  replicated  in  all 
Member States. 

Added value could also be expected from channelling ESIF contributions to the InvestEU Fund 
where the budgetary guarantee could enhance the support to specific final recipients or products 
in the programme areas.  

In addition, an EU intervention is the only tool capable to effectively address investment needs 
linked to the EU-wide policy objectives. Tackling the problem only with structural reforms and 
improved  regulatory  environment  would  not  be  sufficient  to  address  the  remaining  investment 
gaps in the post 2020 period.  

A more detailed analysis of the EU Added Value per policy window is available in the Annex 4 
(Scoping Papers per policy Window). 

Moreover, the InvestEU Fund will develop a set of principles and criteria to address additionality 
at project level. An initial reflection on the subject is included in Annex 10. 

3.4  Governance 

There  are  several  options  on  how  the  InvestEU  Fund’s  governance  could  be  organised.  These 
options  relate  to  several  possible  layers:  centralisation  versus  decentralisation,  in-house 
governance at the Commission level versus independent governance structure outsourced to an 
implementing partner similar to the system for the EFSI.  

The  governance  structure  currently  used  for  the  EFSI  exhibits  important  drawbacks  in  the 
context  of  the  InvestEU  Fund  ambitions.  Compared  to  the  EFSI,  and  also  due  to  the  need  for 
flexibility  to  respond  to  changing  market  needs,  the  InvestEU  Fund  will  be  more  focused  on 

65 Market  fragmentation  -  preventing  the  smooth  and  effective  functioning  of  the  internal  market  -  can  only  be  truly  tackled 
through an intervention at Union level because of the disparities in Member States' fiscal capacity to act. 

30 

 
                                                 
addressing specific policy objectives. This will require a stronger policy steer. Second, the need 
for  simplification,  flexibility,  and  the  fact  that  InvestEU  Fund  foresees  several  implementing 
partners  exclude  the  possibility  for  external  governance  organised  at  a  specific  implementing 
partner level. Under the InvestEU Fund, the Commission will be able to grant the EU Guarantee 
to any implementing partner that fulfils the relevant criteria.   

Therefore,  maintaining  the  governance  at  the  Commission  level  will  better  fulfil  the  InvestEU 
Fund’s  objectives  and  accountability,  and  in  terms  of  structure  will  ensure  an  adequate  and 
coherent  policy steer.  It will also facilitate a  more in-depth  overview of the supported projects 
and  consequently  facilitate  risk  management.  Outsourcing 
to  several 
implementing  partners  would  weaken  the  policy  steer  compared  to  an  in-house  Commission 
solution and potentially weaken the alignment of interests and coherence in decision-making.   

the  governance 

Neither  a  completely  decentralised  nor  a  centralised  system  is  desirable.  The  decentralised 
governance would just imitate the current fragmented governance for the existing instruments. A 
single  governance  for  the  whole  InvestEU  Fund  would  on  the  other  hand  be  too  general  and 
would  not  cater  for  specific  policy  needs.  Thus,  the  governance  should  be  aligned  with  the 
proposed window-based structure of the InvestEU Fund. This would include an overall InvestEU 
Fund governance complemented by separate but interlinked governance arrangements at policy 
windows level. 

Figure 8 below presents a visual comparison of the governance arrangements for the EFSI and 
current  centrally  managed  financial  instruments  compared  to  the  proposal  under  the  InvestEU 
Programme (full-sized graphs can be found in Annex 13). 

A  key  challenge  of  a  governance  structure  organised  at  a  Commission  level  is  to  ensure  an 
appropriate  level  of  banking  and  investment  expertise.  This  can  however  be  mitigated  with 
active  involvement  of  experts  and  implementing  partners  in  the  InvestEU  Fund’s  structure. 
Overall,  the  governance  structure  aims  at  looking  at  the  InvestEU  Fund  as  a  whole  while 
pursuing the different policy objectives and maintaining an acceptable level of risk. To this end, 
effective risk management with regard to the use of the EU budget guarantee is foreseen to be 
set-up  and  implemented  with  the  aim  to  ensure  that  risks  are  identified,  managed  and 
communicated.  In  particular,  a  risk  assessment  function  will  be  established  for  the  purpose  of 
monitoring the EU guarantee under the InvestEU Fund. Moreover, effective rules for managing 
conflicts of interest will be put in place to ensure segregation of duties, and proper verification at 
all governance levels will be consistently maintained. 

31 

 
 
 
Figure 8 - Current governance for EFSI and FIs vs the proposed governance under 
InvestEU  

Proposed InvestEU Programme governance 

Source: Commission services 

Moreover,  the  governance  structure  of  the  InvestEU  Programme  reflects  its  reinforced  policy 
orientation  and  strengthened  steer  by  the  Commission.  The  InvestEU  Programme  planned 
governance  is  composed  of  both  external  elements  to  be  foreseen  in  the  draft  legislation 
(Advisory Board, Investment Committee and, partially, Project Team) and Commission internal 
coordination (Steering Board, Policy Boards, Inter-Service Coordination Committee, Secretariat 
and, partially, Project Team):  

32 

 
 
 
  Advisory Board: An Advisory Board meeting in two compositions: (i) representatives of the 
implementing partners, and (ii) representatives of the Member States will be set up in order 
to allow the Steering Board and the Policy Boards (see below) to consult the implementing 
partners  and  the  Member  States  when  preparing  and  designing  new  financial  products, 
following market developments and sharing information. 

  Steering Board (Commission internal): A Steering Board to ensure horizontal coordination 
and steering of the InvestEU Fund will be set up. The Steering Board will prepare the various 
horizontal  documents  necessary  for  the  functioning  of  the  InvestEU  Fund  (investment 
guidelines, scoreboard, harmonised format for project submission by implementing partners 
etc.). Moreover, the Steering Board will monitor the overall risk profile of the InvestEU Fund 
and  verify  that  the  risk  characteristics  of  the  financial  products  proposed  under  the  policy 
windows  correspond  to  the  general  risk  profile  and  general  orientations  of  the  InvestEU 
Fund.66 

  Policy  Boards  (Commission  internal):  Investment  support  will  be  allocated  under  four 
policy  windows  clustering  financial  products  by  policy  areas.  Each  window  will  have  a 
Policy Board, composed and led by policy DGs. The Policy Board will be in charge of the 
design of financial products within a window (including the resources attached to them and 
the  necessary  risk  provisioning  within  the  parameters  set  by  the  Steering  Board)  and 
monitoring of the performance of the implementing partners within that window. 

  Investment  Committee:  The  Investment  Committee,  which  meets  in  four  different 
configurations  corresponding  to  the  windows,  approves  the  use  of  the  EU  guarantee 
according  to  the  eligibility  criteria  set  by  the  InvestEU  Fund  regulation  to  operations 
proposed  by  implementing  partners.  The  Investment  Committee  will  be  composed  of  four 
independent experts who will be the same for all the four compositions to ensure horizontal 
consistency and of two independent experts per window specialised in the policy area of their 
respective window. It will make its assessment on the basis of the scoreboard. 

  Project  Team:  The  Project  Team  will  comprise  experts  put  at  the  disposal  of  the 
Commission  by  implementing  partners.  Subject  to  a  positive  confirmation  by  the 
Commission  of  consistency  of  the  proposed  operations  with  Union  law  and  policies,  the 
Project Team  will perform a quality control of the due diligence  of the proposed financing 
investment  operations  carried  out  by  the  implementing  partners.  Financing  and  investment 
operations are then submitted to the Investment Committee for approval of the coverage by 
the  EU  guarantee.  All  implementing  partners  will  be  requested  to  second  a  number  of 
banking  and  risk  management  experts  to  the  Commission  who  will  review  the  risk 
features/issues  of  the  projects  submitted  for  this  purpose.  These  experts  will  not  work  on 
projects submitted by their institution of origin to prevent conflicts of interest.    

  Secretariat  (Commission  internal):  The  implementing  partners  will  send  projects  or 
facilities/programmes  to  the  InvestEU  Fund  Secretariat,  which  will  attribute  them  through 
the Project Team to the Investment Committee of the relevant Policy Window.     

66 The  existing  risk  management  staff  of  the  Commission  will  also  need  to  be  reinforced.  This  will  be  part  of  the  financial 
statement  for  the  legislative  proposal.  The  risk  managers  will  perform  risk  related  calculations  based  on  reporting  from  the 
implementing partners to allow for a thorough supervision by the Steering Board of the risk under the EU guarantee in total and 
under each window and to adjust, if needed, the financial products. 

33 

 
                                                 
3.5  Avoiding overlaps among policy windows 

The  2014-2020  investment  support  instruments  have  generally  proven  effective  in  addressing 
market  gaps.  However,  the  fragmentation  of  the  EU  offer  led  to  the  emergence  of  several 
overlaps.  Past  EFSI  evaluations  found  overlaps  between  EFSI  and  other  centrally  managed 
financial  Instruments.  While  these  have  been  addressed  during  implementation  by  re-focusing 
existing instruments towards new market segments, it is important to avoid such overlaps in the 
future. Moreover, several overlaps have been identified between the centrally managed financial 
instruments. Under the current MFF there have been at least 14 different instruments focusing on 
SMEs under internal, centrally managed EU FIs and the EFSI (see annex 12). In addition, there 
are overlaps between centrally managed instruments and investment support instruments under 
shared  management.  Avoiding  overlaps  and  simplification  is  one  of  the  main  reasons  for  the 
creation of the InvestEU Fund.  

The  InvestEU  Fund  structure  is  designed  to  group  instruments  into  clear  policy  priorities.  The 
InvestEU Fund with its centralised approach (i.e. a single fund, a single Steering Board, a single 
approval process of the operations by the Investment Committees, a single agreement with each 
implementing  partner  and  participative  involvement  of  all  relevant  policy  DGs  in  the  Policy 
Boards  and  the  Inter-Service  Coordination  Committee)  would  ensure  that  EU  financing  is 
channelled in a coordinated and harmonised manner, without overlaps. The governance structure 
ensures coordination and provides for information exchange channels between the Commission 
services  and  key  stakeholders.  Furthermore,  in  its  oversight  capacity,  the  Steering  Board  will 
ensure avoidance of overlaps of eligibility between windows and products.  

Avoidance  of  potential  overlaps  between  financial  products  offered  within  a  policy  window 
would  be  a  competence  of  relevant  Policy  Boards.  Nevertheless,  there  may  still  be  borderline 
cases that will have to be addressed based on demarcation principles for allocation of proposals 
submitted  by  implementing  partners  between  windows.  An  example  for  a  possible  set  of 
principles could be the following: 

1.  Does a product proposal support a social objective?  

Proposals for support having a social objective, regardless of their nature – whether it relates 
to  infrastructure,  microfinancing  or  SMEs  -  will  fall  under  the  social  investment  and  skills 
window.  

2.  Does a product proposal support an SME via financial intermediary?  

Proposals  that  support  SMEs  through  an  intermediated  lending  will  fall  under  the  SME 
window, except for those proposals for support that have a social objective.  

3.  Does a proposal support research and innovation activities?  

The research, innovation and digitalisation window will support projects/products, which fall 
within  the  definition  of  research  and  innovation  activities  other  than  innovative  SMEs  and 
small midcaps (financed under SME window).  

4.  Does a proposal support an infrastructure?  

Infrastructure  projects/products  that  are  not  social  infrastructure  and  not  [primarily/fully] 
R&D infrastructure will fall under the Sustainable Infrastructure Window. 

In  practice,  the  implementing  partner  will  indicate  the  relevant  policy  window  in  their 
submission  of  a  specific  operation  and  financial  product  to  which  the  operation  would  be 
assigned. This will then be reviewed by the Commission.  

A similar solution is proposed for technical assistance, the InvestEU Advisory. In order to avoid 
overlaps and to simplify the access to the services for end-beneficiaries, the InvestEU Advisory 

34 

 
would provide for a single entry point and will also include technical assistance components at 
Policy Window level. 

3.6  Geographical distribution 

The  InvestEU  Programme  support  is  available  to  all  EU  Member  States.  The  InvestEU 
Programme could be also open to third countries that are members of the European Free Trade 
Association, acceding countries, candidate countries and potential candidate countries, countries 
covered by the Neighbourhood policy and other countries, in accordance with the conditions laid 
down between the Union and those countries. The geographical scope of the current instruments 
is included in Annex 11. 

Based  on  the  current  experience  and  past  EFSI  evaluations  recommendation  to  improve  the 
geographical distribution in finance provisioning, the InvestEU Programme is designed in such a 
way to make sure it benefits all Member States, irrespective of their size and of the development 
of their financial market: 

  Implementing partners (see section 5.3) - As the only financial institution active across the 
EU, the EIB will continue to deploy EU-wide financial products and therefore ensure equal 
access  and  coverage  of  financial  products.  In  addition,  the  opening  of  the  EU  guarantee  to 
NPBs aims at better targeting local financing needs. To avoid the EU guarantee benefitting 
mostly  the  countries  with  big,  long-established  NPBs,  the  InvestEU  Fund  is  also  open  to 
consortia of NPBs that cover at least three countries. This will require NPBs to cooperate to 
develop  joint  products  and  will  foster  an  exchange  of  best  practices  and  expertise. Smaller 
and more recent NPBs will thus be able to benefit from this cooperation. Finally, multilateral 
development  banks  will  also  support  a  more  balanced  distribution  of  the  EU  financial 
support.  The  EBRD  is  active  in  11  Member  States 67  and  will  be  able  to  increase  its 
operations in these countries – especially in the crucial fields of energy transition and capital 
market development - thanks to the EU guarantee. The same applies to the Council of Europe 
Bank that has a specific focus on social investment. 

  Member  State  compartment  -  This  feature  of  the  InvestEU  Fund,  which  is  described  in 
Section  3.2,  is  designed  to  mainly  benefit  cohesion  countries,  which  will  benefit  from  an 
increased volume of EU supported finance. 

  Blending - Synergies between EU instruments will be further facilitated by easier rules for a 
smooth and efficient blending of grants in with the InvestEU Fund guarantee. The addition of 
a grant element sometimes enables a project to become bankable and thus eligible for support 
under the EU guarantee.  

  InvestEU  Advisory  –  The  InvestEU  Fund  will  be  accompanied  by  a  comprehensive 
technical  assistance  scheme,  the  InvestEU  Advisory.  It  will,  inter  alia,  provide  project 
development and capacity building support to develop organisational capacities and market 
making activities needed to originate quality projects.  The aim is to create the conditions for 
expanding  the  potential  number  of  eligible  recipients  in  nascent  market  segments,  in 
particular where the small size of individual projects raises considerably the transaction cost 
at  the  project  level.  Project  promoters  in  cohesion  countries  are  expected  to  be  natural 
candidates for this technical assistance support. 

67 Bulgaria, Cyprus, Greece, Romania, Croatia, Estonia, Hungary, Latvia, Lithuania, Poland, Slovak Republic, and Slovenia 

35 

 
                                                 
4  TARGET ACTIONS, FINANCING PRODUCTS AND BENEFICIARIES 

The InvestEU Fund support will be delivered in the form of a budgetary guarantee, which will be 
able to support all types of financial products, such as debt, equity and quasi equity.  

The InvestEU Fund will also foresee a limited envelope for thematic products under each policy 
window  for  pilot  initiatives  which  feature  high  volatility  of  revenues  and/or  are  deployed  in 
uncertain  markets  and  that  cannot  be  covered  by  horizontal/standard  products  available  in  the 
windows.  These  products  could  target  very  high  risk  and  first-of-a-kind  projects,  as  currently 
done  under  financial  instruments  such  as  InnovFin  Energy  Demo  Projects,  Natural  Capital 
Financing  Facility,  SME  guarantees,  and  hence  require  higher  guarantee  coverage.  New 
innovative instruments could be deployed in line with new developments to test market interest.  

In  certain  circumstances,  the  combination  of  the  EU  level  and  the  Member  State compartment 
would  be  possible  for  example  to  co-invest  in  certain  operations/products  or  to  support 
investment platforms bundling small and medium-size projects. 

The InvestEU Fund would be open to all Member States including for cross-border projects with 
certain third countries (e.g. similar to the EFSI). 

4.1.1  Sustainable Infrastructure Window 

The  type  of  actions  covered  under  the  sustainable  infrastructure  window  should  be  closely 
related  to  the  type  of  investments,  the  beneficiaries,  their  risks  and  financial  structuring 
fundamentals. 

For investments that can be consolidated on the balance sheets of promoters (core business type 
of  investments,  strong  promoters),  standard  type  of  instruments/  products  (such  as  loans, 
guarantees,  credit  enhancement)  could  be  provided.  Same  applies  also  for  well  capitalised 
special purpose vehicles (SPVs) backed-up by strong promoters. This type of products could be 
feasible  e.g.  for  certain  transport  or  energy  infrastructure  (inter-connectors  for  large-scale 
renewable power) projects. On the other hand, there may be investment situations and projects 
that  would  require  less  standardised  instruments,  with  higher  risk  coverage  and  potentially  a 
variety of financing products.  

Compared  to  actions  currently  offered  under  various  instruments,  such  as  the  CEF  Debt 
Instrument,  i.e.  senior  debt/project  bond  credit  enhancement,  funded  senior  loan,  hybrid 
securities,  guarantees,  or  development  of  new  products  specifically  focusing  on  low  carbon 
infrastructure  (e.g.  smart  grids  at  intersection  with  energy  storage/mobility),  the  future  actions 
should expand the perimeter of the infrastructure window towards business models of the future, 
essentially laying the ground for their "standardisation" after reaching the critical mass.  

For  highly  innovative  and  high-risk  projects,  blending  with  a  grant  component  coming  from 
other  instruments  should  be  possible.  A  technical  assistance  layer  addressing  the  preparatory 
phase of projects until their financial close would certainly help speed up the pipeline evolution 
and reducing the risks of projects related to financial, legal, technical and procedural elements.  

With  regard  to  the  envisaged  financing  mechanisms,  a  key  aspect  is  flexibly  determining  the 
most effective capital structure and mix of private and public funding through the life cycle of 
the project from greenfield into the brownfield phase. No refinancing would be possible under 
the InvestEU Fund. 

In this context, the EU budget provisioning of debt financing that facilitates access to finance in 
suboptimal investment situations where  projects will have difficulties to receive adequate bank 

36 

 
or  capital  market  financing  should  be  continued.  Given  the  different  needs  emerging  in 
infrastructure,  such  financing  will  support  senior  debt  operations  (loans  and  guarantees),  and 
subordinated ones (funded and unfunded, including project bonds, loans and guarantees). 

Given  the  continued  need  for  infrastructure  renewal  and  development  and  the  ambitious 
decarbonisation  targets  set  at  European  level,  the  need  for  equity  remains  high,  particularly 
during project construction. Complex undertakings such as land remediation projects and assets 
with yet untested technology and revenue models such as battery storage still find it difficult to 
raise  equity capital  for  their  construction  phase.  Projects that  have  a  greater  degree  of  revenue 
risks, operating risks, or construction risks that limit the capacity to borrow may face financing 
gap where equity can be used to provide the necessary additional financial backing. 

Technical  assistance  supporting  the  preparation  of  infrastructure  investment  shall  also  support 
the sustainability proofing of investment projects (notably related to climate), partly by ensuring 
due  consideration  of  low-carbon  and  environmentally  friendly  options  and  solutions,  partly  by 
ensuring infrastructure's resilience to the current and future climate throughout its lifespan. The 
objective  of  these  aspects  of  technical  assistance  lies  in  better  identification  and  reduction  of 
project  risks  during  construction,  maintenance,  operation  and  decommissioning  of  the 
infrastructure at stake.  

In the utility sectors, notably in the energy sector, project promoters would mostly come from a 
mix  of  public  (cities,  municipalities),  semi-public  and  private  sector,  such  as  transmission  and 
distribution system network operators, electricity suppliers and retailers, energy, water and waste 
service companies, generation companies, energy communities, large property owners etc. These 
entities  may  be  public  sector  by  tradition  operating  on  commercial  or  non-commercial  basis, 
privatised with or without public service objective, or recently created public entities in nascent 
markets  (e.g.  for  energy  services).  The  InvestEU  Fund  is  well  placed  to  realise  cross-sectoral 
synergies, e.g. between energy, transport and digital connectivity. Large and medium private or 
public  entities  or  SPVs  also  operate  under  concession  or  PPP  such  as  in  ports,  airports  and 
motorways projects, and as well to deliver water and wastewater services.  

In  the  sector  of  telecommunications,  project  promoters  can  be  private  and  public  and  vary 
significantly in size. It is of particular importance that smaller promoters have adequate access to 
such instruments. On the other hand, strict eligibility criteria should be imposed in relation to the 
projects deployed (e.g. contribution to EU's connectivity targets/increasing coverage, state of the 
art technology, innovative business model). 

In  the  blue  economy,  project  promotors  cover  the  whole  value  chain,  ranging  from  public,  to 
semi-public and private entities varying from multinational, medium size maritime businesses to 
SMEs. 

4.1.2  Research, Innovation and Digitalisation Window  

An  adequate  mix  of  debt,  equity  and  risk-sharing  products  will  be  developed  to  tailor  to  the 
needs of innovators depending on the nature, development stage and risk of R&I projects. This 
will  take  into  account  the  variety  of  potential  R&I  beneficiaries  such  as  European  Innovation 
Council  (EIC)  beneficiaries,  European  Research  Council  (ERC)  grantees,  Marie  Skłodowska-
Curie  actions,  middle  market  companies,  large  companies,  stand-alone  projects,  SPVs, 
Universities, Research Centres, Innovation Agencies, R&I infrastructures, and other R&I driven 
institutions  such  as  research  funding  foundations  and  European  Institute  of  Innovation  and 
Technology (EIT) Knowledge and Innovation Communities. 

37 

 
The focus of the actions of the research, innovation and digitalisation window would be on: 

  Creating  critical  mass  of  financing  to  support  high-risk  investments  in  R&I,  digital  market 
and new technologies. This will include large-scale first-of-a-kind demonstrations for which 
market  investor  interest  may  be  low  and  which  could  deliver  a  step  change  in  support  of 
specific  EU  policy  objectives,  such  as  the  low-carbon  innovation  in  energy  and  industrial 
sectors; Innovation, in particular disruptive, will increasingly rely on complex combinations 
of various technologies, digital transformation and intangible assets. This new wave of much 
deeper and transformative innovations will merge digital with physical and will go more and 
more  into  'deep  tech'.  This  will  foster  emergence  of  new  business  models  and  changes  in 
traditional business models that will require substantial financial resources.  

  De-risking investments in innovative technologies, and transfer established solutions to new 
markets. Financial products of the InvestEU Fund would reduce time to market at potentially 
lower costs. Finance providers remain rather averse towards providing financial support for 
R&I  activities,  which  results  in  low  credit  scores  and  high  interest  charges  or  sub-optimal 
repayment  terms  to  compensate  for  the  perceived  risks  embedded  in  the  innovative 
technologies  or  ventures.  In  many  instances,  private  sector  financiers  and  investors  do  not 
finance uncollateralised projects with unsecure return prospects due to the early stage of their 
development,  the  capital  intensiveness  and  the  long  time  to  market.  This  is  particularly 
relevant in the case of R&I activities with medium and long-term innovation cycles such us 
deep tech, health, new advanced materials or low-carbon technologies in the energy sector, 
CCS and industry. 

  Stimulating innovation diffusion  and  uptake  of technologies  from  radical  to  incremental. It 
will  help  deploy  innovative  solutions,  translate  research  results  to  market  and  support 
innovation  diffusion.  This  window  will  help  address  societal  challenges  linked  to  health, 
energy, security, climate change mitigation and adaptation, decarbonisation of the economy, 
low-carbon mobility and transport, water and food crisis, environmental disasters, migration, 
digitalisation, oceans, and biodiversity loss. 

  Foster  the  transfer  of  best  practices  between  financial  intermediaries  with  a  view  to 
encourage  the  emergence  of  a  broad  product  offering  supporting  R&I  activities  and  R&I-
intensive entities.  

  Technical  assistance  will  be  provided  to  promoters  to  structure  their  projects  in  order  to 
improve  their  investment  readiness  and  bankability.  In  addition,  horizontal  advice  can  be 
supported  to  improve  investment  conditions  in  sectors  and  markets  with  suboptimal 
investment.  This  includes  measures  such  as:  developing  a  business  case  for  new  financing 
mechanisms,  preparing  studies  on  increasing  the  effectiveness  of  financial  instruments  in 
addressing  specific  R&I  and  digital  needs  and  should  also  cover  the  project  development 
documents  and  advise  related  to  speeding-up  the  project  development,  Front  End 
Engineering  Design  studies,  documentation  and  processes  towards  the  financial  close  and 
legal contracting issues (e.g. Intellectual Property Rights) counterparty liabilities settlement).  

Debt  products  will  directly  lend  to  final  beneficiaries  for  investment  in  R&I  activities:  (i) 
indirectly  via  (counter-)  guarantees  to  financial  intermediaries  providing  debt  finance  to  final 
beneficiaries,  (ii)  may  set  up 
investment  platforms  with  public-private  co-investment 
arrangements structures with a view to catalysing investments in a portfolio of projects through a 
combination  of  direct  loans  and  indirect  finance  (counter-)  guarantees  with  a  thematic  or 
geographic  focus  and  (iii)  guarantees  and/or  counter-guarantees  for  national  or  regional  debt-
financing schemes.  

38 

 
The equity and quasi equity products would focus on innovative mid-caps either through direct 
quasi equity investments or through risk sharing arrangements or co-investments with financial 
intermediaries and national public and semi-public financial institutions.  

4.1.3 

 SME Window  

Under the SME window all priority actions will be geared towards facilitating access to finance 
to SMEs and small mid-caps. 

The EU-level debt instruments could focus on SMEs according to the applicable EU definition, 
more specifically those which would not receive support from the market due to the perceived 
higher risk or the lack of collateral. Where justified, more dedicated support may be provided for 
SMEs or organisations, or to small mid-caps, for a specific sector or a specific policy orientation.  

On the debt side, the SME window could also encompass SME guarantee schemes which shall 
provide  guarantees  on  a  broad  range  of  different  financing  transactions  (including  investment 
loans,  guarantees,  working  capital  facilities,  leasing  transactions,  subordinated  loans,  bank 
guarantees). This is essential to achieve the appropriate coverage and to respond to the financing 
needs/business needs of SMEs.  

The  equity  instruments  could  focus  on  investments  in  SMEs  according  to  applicable  EU 
definitions,  and  more  specifically  those  which  activities  would  help  achieve  the  EU  policy 
priorities.  Where  duly  justified,  investments  may  also  be  made  into  small  midcaps.  Targeting 
could  be  done  on  a  sectoral  basis  (linked  to  the  fields  in  which  the  policy  priorities  will  be 
implemented) and a company life-cycle basis (on the basis of funding gap analyses).  

As  regards  equity,  the  products  to  be  included  in  the  SME  Window  could  support  technology 
transfer,  equity  crowdfunding,  business  angel  investments,  venture  capital  (VC)  investments 
(including  investments  into  VC  funds-of-funds),  and  initial  public  offerings.  In  addition,  the 
SME  window  could  support  cornerstone  and  catalytic  investments  in  established  financial 
intermediaries, or entities to be incorporated, that make equity, quasi-equity, hybrid debt-equity 
and  other  forms  of  mezzanine  finance  investments  in  projects,  start-ups  and  established  SMEs 
and small midcaps. 

Equity investments may be combined (blended) with debt finance and grant funding under EU 
central  programmes  or  those  established  under  cohesion  policy  (shared  management)  or  under 
national programmes. 

Technical assistance or capacity-building support where such activities are crucial to achieve a 
smooth  implementation  of  the  financial  instruments,  such  as  best-practice  exchanges  between 
financial  intermediaries  of  a  particular  type,  matchmaking  between  investors  and  investees 
(database, events) and investment-readiness training, coaching in raising finance, and mentoring 
for founders and CEOs.  

4.1.4  Social Investment and Skills Window 

The  InvestEU  Fund  support  can  be  used  in  multiple  sectors  under  the  scope  of  this  window. 
While all the projects will have to be ultimately economically viable and generate revenues for 
the  investors,  the  financial  products  in  use,  their  investment  guidelines,  pricing  and  return 
conditions  will  change  according  to  the  specific  policy  sector,  the  market  gap  to  be  addressed 
and  the  specific  project  structure.  The  following  areas  have  been  identified  as  the  focus  of 
intervention for the InvestEU Fund support under this window: 

39 

 
  Supporting  social  economy  and  social  enterprises  and  microfinance  recipients:  support  to 
promote  inclusive  entrepreneurship,  improve  access  to  employment  (including  self-
employment), job creation, labour market integration, social inclusion. This will be achieved 
by increasing the availability of and access to micro-finance, and access to finance including 
patient capital to social economy organisations and social enterprises. It also includes support 
for  the  upscale  or  development  of  new  business  models  focusing  on  social  return  on 
investment. 

  Skills,  education,  and  integration:  for  building  a  knowledge-based  society,  investment  is 
necessary  in  all  levels  of  education  and  training  (early  childhood  education  and  care, 
secondary schools, higher education), as well as support to increase vocational training and 
lifelong  learning,  including  non-formal  learning  investment  in  human  capital  (inter  alia 
focused  on  improving  the  integration  of  young  people  in  society,  of  refugees  and  asylum 
seekers who are undertaking upskilling actions or qualifying training). Supporting investment 
projects in this field will result in more vibrant education and training systems and markets, 
enabling easier professional transitions for people and being responsive to the lifelong need 
for  upskilling  and  reskilling.  For  knowledge-intensive  institutions  (such  as  universities, 
research  &  innovation  centres)  the  combined  support  under  several  of  the  InvestEU  Fund 
windows may provide a welcome boost towards a knowledge-intensive society.  

  The InvestEU Fund will facilitate the mobilisation of investments in the health sector, for the 
transition to new care models in order to adapt to an increasing demand for healthcare due to 
population ageing and the rising burden of chronic conditions. Investments in reformed care 
models are complex and of high risk as they concern a range of elements in infrastructure, 
technologies and services, and the return is expected in the medium to long term. Up-front 
investments are required to  set-up the  new care models, followed by sustained investments 
over a period of time to facilitate the complete implementation of the reforms68. Return on 
investment  may  only  come  in  the  medium-long  term  and,  consequently,  investments  in 
reformed care models are of high risk. 
infrastructure  and  services: 

the  construction,  expansion  or 

investments 

  Social 

in 

refurbishment of buildings and in the provision of related services for:  

  Education  and  training  (educational  facilities  courses  development,  and  digital 

equipment) 

  Childcare (e.g. nurseries and kindergartens) 
  Social housing (including energy efficient social housing) 
  Healthcare  (e.g.  clinics,  hospitals,  primary  care  centres,  health  promotion 

programmes, integrated care services) and 

  Long-term care (e.g. home-care and community-based services). 

  Support  to  physical  infrastructure  developments  could  be  complemented  with  funding  for 
social economy and social service provision, including through outcomes-based projects, in 
an integrated way.  

For  several  of  the  areas  mentioned  above  the  financial  support  by  the  window  will  be 
complemented by the offer of the InvestEU Advisory including capacity building to “grow” the 
respective  market  players,  including  social  innovators,  social  entrepreneurs,  social  impact 
investors,  and  philanthropists  and  create  a  pan-European  network  of  social  impact  and  social 

68 See  also:  "The  case  for  investing  in  Public  Health",  World  Health  Organization,  Regional  Office  for  Europe  (  2015) 
http://www.euro.who.int/__data/assets/pdf_file/0009/278073/Case-Investing-Public-Health.pdf 

40 

 
                                                 
innovation relay and coaching centres. The capacity-building programme will need to take into 
account  the  different  needs  of  financial  intermediaries  and  procuring  authorities  in  accordance 
with  their  investment  portfolio  and  the  long-term  needs  of  market  development  as  well  as  the 
geographical coverage of financial intermediaries throughout the EU. 

As  regards  social  innovation,  creation  of  markets  for  social  outcomes,  expertise  and  capacity 
building, tools may be developed: (i) to help national, regional or local authorities develop skills 
for  configuring  investment  strategies,  blending  financing,  and  bundling  projects  such  as  the 
development of social clusters; (ii) to grow social innovators, social entrepreneurs, social impact 
investors  and  philanthropists;  and  (iii)  to  facilitate  agreement  on  operational  definitions. 
Capacity  building  also  include  promoting  innovation  by  and  for  the  European  society,  in 
particular,  targeting  new  products,  services  and  organisational  models  that  meet  social  needs, 
foster new social relationships or collaborations, and empower citizens. 

Debt  products  offered  under  this  window  may  include  direct  lending  to  project  promoters  and 
portfolio  guarantees.  Funded  instruments  are  complementary  to  guarantees  as  they  provide 
senior and subordinated loans to intermediaries that are in turn on-lent to vulnerable groups and 
social enterprises. It will target predominantly non-bank intermediaries given that these entities 
have  difficulties  obtaining  debt  finance  in  view  of  the  early  stage  of  their  development. 
Subordinated loans are more relevant for bank intermediaries, as they often provide capital relief.  

Equity  support  may  be  channelled  to  social  enterprises  which  can  benefit  from  risk  financing 
structured in the form of equity/quasi-equity investment participations and hybrid funding. This 
spectrum of patient capital, used in the pre-bankable stages of business start-ups in all sectors, 
allows social  enterprises (including micro-enterprises) to  move gradually away  from a charity-
based funding approach and enhance their innovation and growth potential.  

Thematic  products:  another  specific  delivery  mechanism  akin  to  equity-type  investments  is 
Payment-by-Results  (PbR)  which  is  a  financing  mechanism  and  tool  for  impact  investing  in 
which  public  procuring  bodies  purchase  social  impact  based  on  pre-defined  social  outcomes 
delivered  by  social  service  providers  with  proven  intervention  models  in  a  number  of  areas 
(including access to education, housing, health, and employment services). Social impact bonds 
are PbR schemes that facilitate risk-sharing between private and public investors to help local, 
regional  and  national  governments  improve  efficiency  in  spending  and  increase  the  value  for 
money in social service delivery. 

4.2  Related programmes under preparation 

Several programmes of relevance to the scope of the investment mechanism proposed herein are 
under  preparation.  The  InvestEU  Fund  will  broadly  support  policy  objectives  set  by  these 
programmes and will target areas where financing needs can be covered through the InvestEU 
Fund financial products (and not only by grants).  

Examples of the priority issues tackled in these programmes under preparation are listed below: 

  The CEF 2.0 programme targets transport, energy, and ICT projects;  

  COSME+  in  the  framework  of  the  Single  Market  Programme  that  will  be  predominantly 

dedicated to the support of SMEs;  

  The European Social Fund including in particular a programme for upskilling, employment 

and social innovation;  

  Erasmus + for education, training, youth and sport; 

  The Framework Programme for Research and Innovation;  

41 

 
  The  Programme  for  environment  and  Climate  Action,  including  Natural  Capital69,  Energy 

Efficiency, and the circular economy;  

  The European Culture, Rights and Values programme for the cultural and creative sectors; 

  The  Digital  Europe  Programme  supporting  the  digital  transformation  of  the  European 

industry through advanced technologies, including Artificial Intelligence; and 

  The European Defence Fund. 

The  above  mentioned  programmes  under  preparation  will  focus  on  the  use  of  grants  and 
blending.  

4.3  Blending and combinations 

The  InvestEU  Fund  will  include  a  possibility  for  easier  and  more  efficient  blending  or 
combination of its support with EU grants and EU Emissions Trading Scheme Innovation Fund.  

Blending grants could be used for investments with high socio-economic and policy benefits that 
can  be  effectively  realised,  but  where  investment  costs  are  higher  than  potential  revenues.  In 
other words, such projects would not be able to be rolled out and financed without non-repayable 
support. This would broaden the scope and would increase the impact of the investment support. 

There are two options on how to organise easier blending and combinations. The first would be 
to  include  the  grant  budget  under  the  specific  policy  windows.  The  grant  and  the  investment 
support  decision  would both  be taken  under the framework  of  the  InvestEU  Fund.  This  would 
however require a capacity to plan, implement, and monitor two different types of EU support 
schemes  with  different  objectives  characteristics.  Apart  from  investment  support  expertise,  the 
InvestEU Fund would thus need to integrate a broad spectrum of policy know-how. It would also 
require a substantial administrative capacity for implementation.  

It is thus proposed to use a second option where the decision on the use of grants and FIs under 
sectoral programmes is made by the relevant sectoral DGs in line with the sectoral programme 
policy objectives. The implementation of blending operations would be done in accordance with 
the InvestEU Programme Regulation and the Title X of the Financial Regulation.  

The  blending  would  thus  result  in  simplified  administrative  procedure  for  project  applications, 
monitoring, and reporting. The simplification measures would include: 

  Single application: the project promoter will be able to ask for a combined support with one 

single application;  

  Simple,  clear  and  transparent  rules:  the  criteria  for  a  combined  support  will  be  clearly  and 

transparently communicated to potential beneficiaries and implementing partners;  

  Single reporting: beneficiaries will provide single reporting including information on the EU 

grant and the InvestEU Fund support; and  

  Single monitoring, control and audit procedures for final beneficiaries.  

69   Natural capital in this context includes Nature and Biodiversity as well as the other natural capital components related to air, 

water, land, and related ecosystem services. 

42 

 
                                                 
5  DELIVERY MECHANISMS OF THE INTENDED FUNDING 

5.1  Single fund 

Setting up a single fund would primarily improve the impact of the EU intervention through a 
more  efficient  use  of  budgetary  resources.  Compared  to  financial  instruments,  budgetary 
guarantees freeze less budgetary resources due to limited provisioning compared to the level of 
financial  engagement  and  the  overall  investment  mobilised.  Moreover,  the  risk  is  remunerated 
and fees would be limited.  

A single fund would also achieve better integration and simplification of the different financial 
instruments  and  the  EFSI  budgetary  guarantee  currently  available.  It  would  also  solve  the 
increasing  issue  of  possible  overlaps  and  duplications  between  the  different  programmes, 
through better coordination, a single set of rules and clearer demarcation of interventions. 

To complement these integration and simplification efforts and to focus on the final beneficiaries 
needs,  the  InvestEU  Advisory  accompanying  the  InvestEU  Fund  would  also  aim  at  better 
channelling the technical assistance needs to the policy areas covered by the InvestEU Fund.  

5.2  Single budgetary guarantee 

It is proposed that support from the InvestEU Fund will be underpinned by a single  budgetary 
guarantee and will be provided through financial products that address a diversified portfolio of 
risks. This presents efficiency gains when compared to the option of having several ring-fenced 
budgetary guarantees addressing a limited range of risks, in that it requires a lower provisioning 
rate while providing an equivalent level of protection.  

The  experience  in  managing  budgetary  guarantees  as  demonstrated  in  the  successful 
implementation of the External Lending Mandate (ELM, since 1970s) and the EFSI (since 2015) 
- where the financial risk exposure is not fully provisioned (provisioning rate: 35%) - as well as 
the inclusion of budgetary guarantees under the scope of the revised Financial Regulation (Title 
X), including a robust framework for the  management of contingent  liabilities, have  paved  the 
ground  for  a  better  alignment  of  provisioning  rates  with  risk.  The  recourse  to  a  budgetary 
guarantee  presents  thus  significant  efficiency  gains  compared  to  financial  instruments,  which 
require 100% funding. 

The  range  of  interventions  envisaged  under  the  InvestEU  Fund  will  be  implemented  through 
different  products  targeting  different  risks  that  would  inherently  require  high,  medium  or  low 
provisioning  rates,  depending  on  the  type  of  operations  guaranteed.  The  Commission  will 
provide guidance and monitor the usage and the risks incurred under different products, so as to 
ensure that the overall portfolio of interventions is compatible with the general provisioning rate 
referenced in the InvestEU Fund regulation.  

For  this  reason,  it  is  proposed  to  underpin  such  financial  support  within  the  EU  by  one  single 
budgetary guarantee. A theoretical provisioning rate would be assigned to each financial product 
under the different policy windows, which would depend  on the nature of the product (debt or 
equity), the granularity, the revenue generating potential and the risk sharing arrangements with 
implementing partners. 

For example, one can assume that support from the social investment and skills window may be 
provided  more  in  the  form  of  highly  provisioned  products,  whereas  lower  provisioning  needs 
may  be  foreseen  for  the  support  offered  through  the  sustainable  infrastructure  window,  as 
infrastructure projects present a higher likelihood to generate revenues which would remunerate 

43 

 
the EU guarantee. In the same vein, the support from the SME window would be in the form of a 
mix of highly provisioned products (i.e. SME guarantees) and of medium provisioned ones, such 
as  venture  capital70.  The  general  provisioning  rate  of  the  single  budgetary  guarantee  would 
represent the weighted average of the specific rates. 

Specific interventions that would require a grant component to ensure the economic viability of a 
project could be carried out by blending or combining the support from the budgetary guarantee 
with complementary EU funds in the form of a grant. In such case, the grant would be managed 
under sectoral programmes and appropriate synergies would be built with the intervention under 
the InvestEU Fund. In the cases where blending support is expected to be provided in the form 
the financial instruments, e.g. for high-risk targeted portfolios, such support would be provided 
under the InvestEU Fund.  

5.3 

Implementing partners 

The  investment  support  has  to  be  delivered  to  eligible  beneficiaries  in  the  most  effective  and 
cost-efficient  manner.  The  implementing  partner  should  possess  banking  and  investment 
expertise, should  have  adequate financial capacity, as  well  as an in-depth understanding  of the 
specific  market  needs  and  beneficiaries.  Moreover,  its  interests  should  be  closely  aligned  with 
the InvestEU Fund policy objectives.  

The EIB Group is currently the biggest implementing partner for EU financial instruments and 
budgetary guarantees. However, under the Financial Regulation, these can also be implemented 
through  financial  intermediaries  such  as  multilateral  developments  banks  (MDBs),  bilateral 
financial institutions, or national promotional banks and institutions (NPBs) (together defined as 
"implementing  partners").  This  is  currently  the  case  for  financial  programmes  in  the  external 
action sphere. 

The  main  options  for  the  InvestEU  Fund  are  whether  to  keep  the  EIB  Group  as  the  exclusive 
implementing  partner  or  open  the  possibility  to  deploy  the  support  through  other  NPBs  and 
MDBs.  

The  EIB  Group  will  remain  the  strategic  implementing  partner  for  EU  investment  support 
instruments. This is because the EIB Group: 

 

Is the European Union's non-profit lending institution created by the Treaty to implement EU 
policy; 

  The Treaty foresees that "the bank shall facilitate the financing of investment programmes in 
conjunction  with  assistance  from  the  structural  funds  and  other  Union  Financial 
Instruments" (art. 309 TFEU). 

  Covers  a  broad  spectrum  of  policy  areas  and  is  the  only  such  institution  with  an  outreach 

across all EU Member States; 

  Has a longstanding experience and track record in supporting investment and implementing 

EU financial instruments and budgetary guarantees; and 

70 The provisioning rate in terms of the products targeting SME financing will need to be higher than the EFSI provisioning rate. 
The is because the guarantee instruments originated under EFSI SME Window have a rather low provisioning rate as a result of 
the  credit  enhancement  provided  by  the  EU  financial  instruments,  which  take  the  First  Loss  Piece  (FLP)  position.  However, 
given that in the next MFF, it will no longer be possible to provide an FLP through the support from EU financial instruments, 
the full guarantee amounts of underlying operations will need to be provisioned under the InvestEU Fund SME window. 

44 

 
                                                 
  Has  the  organisational  and  financial  capacity  necessary  to  deliver  a  broad  spectrum  of 

investment support instruments.  

Having  a  single  implementing  partner  on  the other  hand  limits  the  Commission’s flexibility  to 
target specific suboptimal investment situations. Deployment of EU investment support through 
other implementing partners would in particular be useful for programmes, sectors, and regions 
where such institutions contribute to EU policy objectives in a more targeted manner. This would 
also  be  relevant  in  cases  where  other  implementing  partners  can  offer  specific  expertise  and 
added value by extending the outreach of the InvestEU Fund.  

Therefore,  it  is  considered  that  the  InvestEU  Fund  should  not  work  exclusively  with  one 
implementing  partner.  The  Commission  should  have  the  possibility  to  choose  one  or  several 
partners that will most  effectively  achieve the given policy objective while maintaining  an  EU 
multi-country  dimension.  All  implementing  partners  will  however  have  to  respect  the  relevant 
criteria in the Financial Regulation, in particular in Article 154 on indirect management. 

The EU level compartment could thus be mainly implemented by the EIB Group as well as by 
other multilateral development banks (e.g. EBRD, Nordic Investment Bank, Council of Europe 
Bank), or consortia of national promotional banks and institutions that would cover at least three 
Member  States,  ensuring  a  diversification  of  pipelines  and  a  wider  coverage  of  the  policy 
objectives.  NPBs  are  likely  to  be  the  main  implementing  partner  of  the  Member  State 
compartment,  although  the  EIB  Group  and  other  multilateral  development  banks  will  also  be 
eligible.  

The foreseen collaboration between implementing partners for the quality check of proposals and 
the integrated risk assessment under the Project Team could have several benefits, e.g. a closer 
relationship among European public financial institutions, enhanced capacity building of national 
and regional development banks and institutions. 

The  financing  support  provided  under  the  InvestEU  Fund  will  be  implemented  in  an  indirect 
management  mode  by  implementing  partners.  In  turn,  the  implementing  partners  could  either 
finance projects directly or sign agreements with financial intermediaries in order to reach out to 
the targeted eligible final beneficiaries. 

The advantage that the InvestEU Fund will bring will be the possibility to sign one agreement 
per implementing partner which relates to all instruments/initiatives across windows that will be 
implemented  by  the  same  partner.  This  will  allow  for  improved  efficiencies  and  economies  of 
scale. This will also improve the Commission’s coordination and negotiation capacity.  

In  the  field  of  intermediated  debt  finance,  participating  intermediaries  will  benefit  from  a 
guarantee  or  a  counter-guarantee  from  the  EU  in  order  to  originate  portfolios  of  higher  risk 
financing  whereas  at  the  same  time  sharing  the  portfolio  risk  with  the  EU  for  the  sake  of 
alignment of interest. The additionality stems from the fact that the EU guarantee will enable the 
intermediaries  to  reach  out  to  beneficiaries  that  otherwise  would  not  be  financed  or  will  allow 
them  to  increase  significantly  their  lending  volumes  to  eligible  beneficiaries  at  better  terms 
(lower pricing, reduced collateral requirements, longer maturities).  

The intermediated equity instruments will be delivered through national promotional institutions, 
funds-of-funds, private equity funds (infrastructure, SMEs), venture capital funds, business angel 
funds, technology transfer funds, crowd-equity platforms, social intermediaries or  social sector 
intermediaries, special-purpose vehicles, and co-investment funds or schemes. The participation 
of the EU will have a catalytic role to attract other private investors. 

45 

 
The  allocation  of  the  InvestEU  Fund  guarantee  should  be  based  on  the  implementing  entities' 
abilities  to  address  and  contribute  to  EU  policy  objectives  covered  by  the  InvestEU  Fund.  In 
accordance  with  Article  154(1)  of  the  Financial  Regulation,  the  selection  of  implementing 
partners "shall be transparent, justified by the nature of the action and shall not give rise to a 
conflict  of  interests".  In  the  EU  level  compartment,  the  following  criteria  would determine  the 
allocation  of  the  guarantee  to  the  investment  programmes  proposed  by  eligible  implementing 
partners: 

  Coverage of InvestEU Fund policy objectives, 

  Geographical reach out, 

  Own resources pledged by the implementing partner, 

  Range of effective financing products and innovative risk solutions, 

  Costs and pricing structures, and 

  For entities other than the EIB Group, their operational and financial capacity. 

A  significant  proportion,  of  the  EU  Guarantee  should  be  reserved  for  implementing  partners 
capable  to  address  suboptimal  investment  situations  in  all  EU  Member  States.  The  rest  of  the 
guarantee could be granted to implementing partners able to operate and address market gaps in 
at least three Member States. Groups of NPBs would also be able to form a consortium in order 
to address cross border investment needs and benefit from the EU Guarantee. This would allow 
for flexibility, favour cooperation between NPBs, and focus the use of the EU Guarantee on EU 
policy objectives. 

5.4  Technical assistance (InvestEU Advisory) 

Technical assistance capacity has been highlighted as a key challenge to investment in many of 
the policy areas expected to be covered by the InvestEU Fund, including in the recently adopted 
sustainable finance action plan. Many private funds are ready and willing to invest but are unable 
to identify attractive investment opportunities, not least because of poor enabling environments. 
In this sense, support is needed to transfer lessons from one member state to another, as well as 
to advise Member States, local authorities and private project promoters on how best to develop 
projects in this space.  

Effective technical assistance services  are one way to  address this challenge. These could take 
the  form  of  centrally-managed  advisory  support  provided  at  EU  level  to  develop  investment 
projects, platforms and programmes. 

The advisory support is particularly relevant for:  

  Project promoters to develop and implement investment projects and covering specific steps 
of the project development or the entire life-cycle of a project. This also includes access to 
finance and grants,  

  Financial  and  other  intermediaries  to  develop  investment  project  pipelines  and  investment 

platforms; 

  Local authorities to develop investable projects and programmes (avoiding overlaps with the 

TA under operational programs).  

Depending  on  the  facilities,  TA  can  be  provided  directly  in  the  form  of  advisory  services,  or 
through a grant which the beneficiary uses to cover its internal costs (e.g. staff) and the required 
external expertise (specialist consultants to be procured).  

46 

 
Better  coordination  amongst  the  existing  EU  initiatives  is  key  to  avoid  duplication  and  not  to 
reinvent the wheel each time a new need is identified and a TA facility is launched. Moreover, 
the  large  number  of  separate  agreements,  with  different  delivery  modes,  contractual  forms, 
pricing  etc.  for  often  similar  types  of  services,  call  for  simplification  and  streamlining.  The 
centrally managed TA initiatives available during the current MFF are totalling around EUR 500 
million with additional more than EUR 200 million for supporting development of projects under 
shared management with JASPERS (see Annex 6).  

The TA component under the InvestEU would contribute to the preparation and the development 
of an investment project pipeline in the policy areas covered by the InvestEU Fund. Given that 
TA  is  offered  upfront,  not  all  projects  supported  by  it  would  be  receiving  financing  support 
through  the  InvestEU  Fund.  The  TA  will  also  aim  at  building  capacity  of  promoters  and 
intermediaries  to  develop  and  implement  projects  in  the  policy  areas  covered  by  the  InvestEU 
Fund.  TA  could  also  be  used  to  facilitate  blending  opportunities  with  grants  schemes.  Each 
policy  window  under  the  InvestEU  Fund  through  the  Policy  Board  would  be  in  charge  of 
developing its TA offer based on specific needs identified. 

A cross sectoral TA component would also be set up in order to address common/cross sectoral 
TA  needs,  emerging/strategic  areas  where  additional  priority  should  be  given.  In  order  to 
simplify  the  access  to  TA  for  the  final  beneficiaries,  this  cross-sectoral  TA  component  would 
also provide for a single entry point for TA support request. 

Figure 9 - TA component (InvestEU Advisory) under InvestEU  

Source: Commission services, 2018 

Mirroring the flexibility introduced by the InvestEU Fund regarding implementing entities, the 
InvestEU Assistance offer would be ruled by common provisions and implemented by relevant 

47 

 
 
implementing  entities  (i.e.  geographical,  sectoral  type  of  technical  support  specialisations). 
Moreover, synergies with other TA initiatives under grant programmes would be created through 
the use of common provisions in the respective legal bases.  

6  HOW WILL PERFORMANCE BE MONITORED AND EVALUATED? 

The InvestEU Fund's aim is to better leverage and use EU funds, simplify and streamline rules, 
avoid duplications, and achieve better policy delivery. Therefore, focused reporting, monitoring 
and evaluation arrangements will be key to measure the degree of the progress.  

Performance  monitoring  will  be  carried  out  both  at  overall  InvestEU  Fund  level  and  at  policy 
window level. The Commission will develop performance indicators to assess the impacts of the 
InvestEU Fund intervention at the general level and for the specific policy objectives.  

At  InvestEU  Fund  level,  in  line  with  the  provisions  of  the  amended  Financial  Regulation,  the 
InvestEU  Fund  regulation  will  put  forward  several  indicators  based  on  the  common  policy 
objectives, while the measurement mechanisms for these indicators will be developed in advance 
of  the  implementation  of  the  new  regulation.  Given  the  policy  nature  of  this  instrument,  the 
success of this instrument would not only be measured against the overall volume of investment 
mobilised,  as  it  was  the  case  for  the  EFSI,  but  also  through  more  targeted  impact  indicators 
identified  under  each  policy  window  or  of  a  cross-cutting  nature.  Several  of  these  indicators 
would mirror the corresponding impact indicators being developed under the structural funds so 
as  to  be  able  to  measure  the  combined  effort  of  the  EU  towards  important  policy  priorities. 
Sectoral information reported at NACE level 2 would also be provided.  

The  targets  under  each  policy  window  will  measure  performance  related  to  the  specific  policy 
challenges  and  will  thus  be  more  detailed  and  granular.  Policy  specific  indicators  will  be 
developed upon the design of the financing products to be deployed under each window, and will 
comprise  the  measurement  of  progress  towards  achieving  specific  policy  objectives,  such  as 
sustainability of infrastructure and climate investments, reduction of emissions, CO2 mitigation/ 
GHG reductions/ avoidance/ capture, investment in R&I, support of jobs and growth, and energy 
efficiency targets.  

Annex  7  includes  the  list  of  core  indicators  that  could  be  used  under  the  InvestEU  Fund.  In 
addition  to  these  core  indicators,  more  detailed  indicators  will  be  included  in  the  investment 
guidelines or guarantee agreements on the basis of the specific financial products to be deployed. 
Moreover,  specific  indicators  will  be  developed  for  the  InvestEU  Advisory  and  the  InvestEU 
Portal.  

A  more  detailed  example  of  performance  and  monitoring  indicators  for  the  SME  window  is 
included in Annex 8, as well as in Annex 9 for the Social investment and skills Window. 

While  Policy  Boards  will  design  specific  impact  measurements  and  indicators  for  each  policy 
window, the overall performance and monitoring system will be approved by the InvestEU Fund 
Steering  Board.  Concrete  and  measurable  targets  for  the  support  provided  under  the  InvestEU 
Fund and under each policy window level will be set in the guidance of the Steering Board.  

The required data will be collected from implementing partners. 

48 

 
 
 
 
Monitoring and evaluations 

The  Commission  in  cooperation  with  the  implementing  partners  will  monitor  the  performance 
and  implementation  of  the  InvestEU  Fund.  Monitoring  will  be  undertaken  in  line  with  the 
requirements laid down in the Financial Regulation. 

Monitoring indicators may not be sufficient to provide an adequate evaluation of the effects of 
the  programme.  For  this  reason,  it  is  foreseen  to  plan  for  impact evaluations of  the  effects  of 
specific projects/interventions on selected outcomes (measured on intermediate/end users), along 
with the relevant data collection at the appropriate level of granularity.  

The Commission will perform external evaluations of the InvestEU Fund. They will thoroughly 
assess the InvestEU Fund’s performance in terms of relevance, effectiveness, efficiency and EU 
added  value.  The  first  interim  evaluation  will  be  carried  out  in  2025  so  as  to  assess  the  initial 
progress  and  to  inform  the  decision  making  process  on  the  successor  instrument.  The  final 
evaluation will take  place  after  the  implementation  period. These  evaluations  will  also  address 
causality between the intervention and the observed results. 

49 

 
 
ANNEX 1: PROCEDURAL INFORMATION 

Lead DG(s), Decide Planning/CWP references 

The  Directorate-General  (DG)  for  Economic  and  Financial  Affairs  (ECFIN)  was  leading  the 
preparation  of  this  initiative  and  the  work  on  the  impact  assessment  in  the  European 
Commission.  

Coordination  and  consultation  with  all  the  other  relevant  Commission  departments  was 
organised  in  the  context  of  the  existing  Financial  Instruments  Inter-service  Expert  Group 
(FIIEG). DG ECFIN together with DG Budget chaired discussions regarding this initiative. Nine 
FIIEG meetings dedicated entirely to the InvestEU Programme were organised from December 
2017 to March 201871. The following Commission services participated in the group: Secretariat 
General, Legal Service, Economic and Financial Affairs, Budget Competition, Internal Market, 
Industry, Entrepreneurship and SMEs, Climate Action, Communications Networks, Content and 
Technology,  Employment,  Social  Affairs  &  Inclusion,  Energy,  Environment,  Mobility  and 
Transport,  Research  and  Innovation,  Agriculture,  Anti-fraud  Office,  Education  and  Culture, 
Executive Agency for SMEs, Financial Stability, Financial Services and Capital Markets Union, 
Health  and  Food  Safety,  International  Cooperation  and  Development,  Joint  Research  Centre, 
Maritime Affairs and Fisheries, Migration and Home Affairs, Neighbourhood and Enlargement 
Negotiations, Regional and Urban Policy, Taxation and Customs Union.  

Organisation and timing 

This Impact Assessment was prepared based on experience and past evaluation of the EFSI and 
other  centrally  managed  financial  instruments.  The  preliminary  work  and  analysis  started  in 
second half of 2017 and intensified in 2018 through extensive consultation and exchanges with 
above  mentioned  Commission  services.  An  external  consultants  led  by  ICF  Mostra  provided 
some additional support for this Impact Assessment. 

Consultation of the RSB 

An  informal  upstream  meeting  was  held  on  2  February  2018  with  Regulatory  Scrutiny  Board 
(RSB)  representatives  and  the  participation  of  SG,  DG  BUDG,  DG  ECFIN,  DG  GROW,  DG 
CNECT and JRC. During this discussion, Board members provided early feedback and advice on 
the basis of the inception impact assessment. Board members' feedback did not prejudge in any 
way the subsequent formal deliberations of the RSB. 

The  RSB  scrutiny  took  place  on  25  April  2018.  The  board  gave  a  positive  opinion  with 
reservations that have all been addressed in the revised version of the impact assessment report.  

The table below summarises the changes introduced to this Impact Assessment in response to the 
Board’s main considerations: 

Main RSB considerations: 

Changes made to the Impact Assessment 

The  report  does  not  sufficiently  explain  how 
InvestEU  will  avoid  financing  overlaps.  These 
can  be  either 
thematic 
windows,  or  external,  with  instruments  funded 

internal,  among 

its 

Section  3.5  was  redrafted  to  better  explain  the 
current overlaps and how the potential overlaps will 
be avoided.  
More details are included in Annex 12. This includes 

71 One meeting was dedicated to the InvestEU Fund in general while others were dedicated to specific policy areas/Windows.  

50 

 
 
                                                 
directly  by  the  Member  States  under  European 
structural and investment funds (ESIF). 

It  does  not  sufficiently  explain 

The report does not elaborate on the choice of the 
envisaged  complex  governance  structure  of  the 
the 
Fund. 
functioning  of  the  new  structure  and  to  what 
extent  this  would  constitute  an  improvement,  as 
compared to the current situation. 

 The  report  should  elaborate  on  possible  higher 
risk-taking  by  the  EU  budget  related  to  the 
increased  use  of  financial  instruments  and  the 
lower  provisioning  rates  implied  by  the  recourse 
to a global guarantee. The report should describe 
how  the  risk  assessment  function  would  be 
organised  within  the  governance  structure  of 
InvestEU.  It  should  explain  how  this  would 
effectively  protect  the  interests  of  the  EU  budget 
from undue or excessive risk-taking. To assess the 
overall  risk  to  the  established  budget  guarantee, 
the  report  should  clarify  the  issue  of  assessing 
individual  provisioning  rates,  the  ensuing  overall 
provisioning  rate  for  the  Fund  and  risk  sharing 
and  its  rationale  between  the  EU  budget  and  the 
implementing  partners.  Moreover, 
it  should 
provide  more  details  on  the  allocation  of  the 
budget  guarantee  across  thematic  windows  and 
sectors. 

In  addition,  past  EFSI  evaluations  have  also 
stressed  the  need  to  improve  the  geographical 
distribution  in  finance  provisioning.  Building  on 
the experience with EFSI, the report should better 
the  Fund  would  deal  with 
explain  how 
geographical  distribution,  given 
the  overall 
bottom-up  approach  to  financing  projects.  It 
should  also  thoroughly  describe  the  mitigating 
measures  that  the  proposal  envisages  to  put  in 
place. 

two tables analysing the currently observed potential 
overlaps  of  SME  products  under  centrally  managed 
FIs  for  debt and  equity  products.  Moreover,  section 
3.1  explains  how  InvestEU  will  address 
the 
identified  shortcomings  and  lessons  learnt  with 
existing instruments.  
Additional drafting has been provided in section 3.4 
that  explains  in  detail  the  reasons  for  the  choice  of 
the  governance  structure  and  the  role  of  different 
bodies.  This  includes  also  a  comparison  of  the 
governance  arrangements  currently  in  use  for  the 
EFSI  and  the  FIs  with  the  one  proposed  under  the 
InvestEU  Fund.  Annex  13  includes  detailed  figures 
that  represent  the  current  governance  arrangement 
with those proposed under the InvestEU Fund.  

Additional  clarifications  on  the  assumptions  for  the 
foreseen level of risk and the provisioning rates have 
been  added  to  section  5.2  "Budgetary  Guarantee". 
An  overview  of  the  indicative  allocation  of  the 
budgetary  guarantee  has  been  added  to  section  3 
"Programme  Structure  and  Priorities".  Further 
explanations concerning the risk assessment function 
within  the  governance  structure  have  been  added  to 
section 3.4 "Governance". 

A new section (3.6 - Geographical distribution) was 
introduced to the report providing details on how the 
design of the InvestEU Fund will ensure a balanced 
geographical  distribution  and  avoid  concentrations 
of the EU support. 

51 

 
 
 
 
 
Evidence, sources and quality 

Sustainable infrastructure window  

TEN-T Work Plans: https://ec.europa.eu/transport/themes/infrastructure_en 

EIB, Investment Report 2017/2018 – From Recovery to Sustainable Growth 
http://www.eib.org/infocentre/publications/all/investment-report-2017.htm 

EIB, Restoring EU Competitiveness 2016 - 
http://www.eib.org/attachments/efs/restoring_eu_competitiveness_en.pdf  

European Commission, 2016, Clean Energy for all Europeans, COM(2016) 860 final - 
https://ec.europa.eu/transparency/regdoc/rep/1/2016/EN/COM-2016-860-F1-EN-MAIN.PDF 

European Commission, 2016, Climate change and major projects: 
https://ec.europa.eu/clima/sites/clima/files/docs/major_projects_en.pdf 

European Commission, 2018, Action Plan Financing Sustainable Growth, COM(2018) 97 final - 
https://ec.europa.eu/transparency/regdoc/rep/1/2018/EN/COM-2018-97-F1-EN-MAIN-PART-
1.PDF 

European Commission, 2018, Financing a Sustainable European Economy by the High-Level 
Expert Group on Sustainable Finance, Final Report 2018 
https://ec.europa.eu/info/publications/180131-sustainable-finance-report_en 

Research, innovation and digitalisation Window  

DG RTD, 2013, Independent Expert Group (IEG), Second interim evaluation of the RSFF, Final 
Report - 
http://ec.europa.eu/research/evaluations/pdf/archive/other_reports_studies_and_documents/interi
m_evaluation_report_rsff.pdf ; 

EIB Working Papers, 2016/08, Intangible investment in the EU and US before and since the 
Great Recession and its contribution to productivity growth - 
http://www.eib.org/attachments/efs/economics_working_paper_2016_08_en.pdf ; 

EIB, 2014, MidCap Growth Finance, Flexible financing for innovative mid-cap companies - 
http://www.eib.org/attachments/general/events/20141211_innovfin_oslo_mgf_workshop_en.pdf; 

EIB, 2014, Unlocking lending in Europe - 
http://www.eib.org/attachments/efs/economic_report_unlocking_lending_in_europe_en.pdf 

EIB, 2015, Operations Evaluation: EIB group’s support to the knowledge economy 2007-2013 - 
http://www.eib.org/attachments/ev/ev_support_to_knowledge_economy_en.pdf; 

EIB, 2016, Investment and Investment Finance in Europe, Financing productivity growth - 
http://www.eib.org/attachments/efs/investment_and_investment_finance_in_europe_2016_en.pd
f; 

European Commission, 2015, Action Plan on Building a Capital Markets Union, COM(2015) 
468 final - http://ec.europa.eu/transparency/regdoc/rep/1/2015/EN/1-2015-468-EN-F1-1.PDF; 

European Commission, 2016, Accelerating Clean Energy Innovation, COM(2016) 763 final - 
https://ec.europa.eu/energy/sites/ener/files/documents/1_en_act_part1_v6_0.pdf; 

52 

 
 
European Commission, 2016, Commission Staff Working Document, Activities relating to 
Financial Instruments, SWD(2016) 335 final - https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52016SC0335&from=EN;  

Brown, G. Martinsson, and B. Petersen (2012)" Do Financing Constraints Matter for R&D?", 
European Economic Review, 56(8). 

Carpenter, R, and B. Petersen (2002) "Capital market imperfections, high-tech investment, and 
new equity financing", The Economic Journal, 112. 

Cincera, M., J. Ravet, and R. Veugelers (2016) "The sensitivity of R&D investments to cash 
flows: comparing young and old EU and US leading innovators," Economics of Innovation and 
New Technology. 

D'Este, P. et al (2012), "What Hampers Innovation? Revealed Barriers versus Deterring 
Barriers", Research Policy 41(2) 

Hall, B, Moncada-Paterno, P, Montresor, S and A. Vezzani (2016) "Financing constraints, R&D 
investments and innovative perfromances: new empirical evidence at the firm level for Europe". 
Economics of Innovation and New Technology.25:3, 183-196.   

IMF (2016), Fiscal Monitor: Acting Now, Acting Together, Washington, April. 

OECD (2015) "The future of productivity", OECD, 2015. 

SME Window  

SME Window: Cultural and Creative Sectors 

Survey 
http://ec.europa.eu/assets/eac/culture/library/studies/access-finance_en.pdf 

cultural 

finance 

access 

and 

for 

on 

to 

creative 

sectors, 

Impact Assessment for Creative Europe (2014-2020) - http://ec.europa.eu/programmes/creative-
europe/documents/ce-impact_en.pdf (Part III- Financial Instrument, pages 115-170) 

Good  practice  report  "Towards  more  efficient  financial  ecosystems:  innovative  instruments  to 
facilitate 
- 
the 
https://ec.europa.eu/culture/news/2016/new-good-practice-report-innovative-financing-
instruments-cultural-and-creative-sectors_en  

sectors" 

creative 

cultural 

finance 

access 

and 

for 

to 

a 

on 

Report 
policy 
http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&reference=A8-2016-
0357&language=EN 

coherent  EU 

creative 

cultural 

and 

for 

industries 

- 

Social investment and skills window 

Mid-term  evaluation  of  the  Erasmus+  Programme  -  https://ec.europa.eu/assets/eac/erasmus-
plus/eval/icf-volume2-student-loan.pdf 

DG EAC, Study on feasibility of an education and training investment platform (2017)  

Report  of  the  High  Level  Task  Force  (HLTF)  on  Investing  in  Social  Infrastructure  - 
http://eltia.eu/images/Boosting_investment_in_Social_Infrastructure_in_Europe.pdf  

53 

 
 
 
CEEP  (2017)  CEEP  response  to  the  reflection  paper  on  the  future  of  EU  finances  - 
http://www.ceep.eu/wp-
content/uploads/2017/07/17SAB08_DRAFT_CEEP_response_to_Reflection_paper_future_of_t
he_EU_Finances-12092017-2.pdf  

ESF 2007-2013 Ex post evaluation: Investment in human capital, Volume 1 

ESF 2007-2013 Ex post Evaluation: Access and sustainable integration into employment 

European Policy Centre (2011) The EU Added Value Test to Justify EU spending: What Impact 
for Regions and Local Authorities? - 
http://www.cor.europa.eu/en/documentation/studies/Documents/eu-added-value-test-to-justify-
eu-spending.pdf  

Commission, DG Employment (2010): Study on the Return on ESF Investment in Human 
Capital, Final report - 
http://ec.europa.eu/employment_social/esf/docs/human_capital_final_report_en.pdf  

G. Verschraegen, B. Vanhercke, R. Verpoorten (2011): The European Social Fund and domestic 
activation policies: Europeanization mechanisms; In: Journal of European Social Policy; Vol 21, 
Issue 1, pp. 55 – 72 - http://journals.sagepub.com/doi/abs/10.1177/0958928710385733 . 

G. Lejeune; I. Maquet (2014) Job creation, productivity and more equality for sustained growth  

EP; DG for internal policies (2017): ESF policies as a mitigating factor during the crisis; Study 
for the EMPL Committee - 
http://www.europarl.europa.eu/RegData/etudes/STUD/2017/595351/IPOL_STU%282017%2959
5351_EN.pdf  

Commission, DG Employment, Social Affairs and Equal Opportunities (2011) Evaluation of 
ESF Support for Enhancing Access to the Labour Market and the Social Inclusion of Migrants 
and Ethnic Minorities - 
https://circabc.europa.eu/webdav/CircaBC/empl/ESF%20Evaluation%20discussion%20group/Li
brary/commission_evaluation/20072013/evaluation/evaluation_integration/Final%20Report%20
ESF%20support%20to%20migrants%20and%20minorities.pdf  

Bertelsmann Stiftung (2013): The European Added Value of EU Spending: Can the EU Help its 
Member States to Save Money? Exploratory Study - 
https://www.rand.org/content/dam/rand/pubs/external_publications/EP50000/EP50350/RAND_
EP50350.pdf  

Dheret, C. and Roden, J., 2016, Towards a Europeanisation of Youth Employment Policies: A 
Comparative Analysis of Regional Youth Guarantee Policy Designs, Issue Paper, No.81 - 
http://www.epc.eu/documents/uploads/pub_6949_towardseuropeanisationyouthemploymentpolic
ies.pdf  

Eurofound, 2015, Beyond the Youth Guarantee: Lessons learned in the first year of 
implementation, Background document to the informal EPSCO meeting 16-17 July 2015, 
Luxembourg - http://www.eu2015lu.eu/fr/actualites/notes-fond/2015/07/info-epsco-
documents/WL_Beyond-the-Youth-Guarantee_Eurofound---June-2015_EN.pdf  

European Commission, 2016, The Youth Guarantee and Youth Employment Initiative three years 
on, Strasbourg - http://eur-lex.europa.eu/resource.html?uri=cellar:73591c12-8afc-11e6-b955-
01aa75ed71a1.0001.02/DOC_2&format=PDF  

54 

 
Cernat, L, Mustilli, F., Trade and Labour Adjustment in Europe: What Role for the European 
Globalisation Adjustment Fund - 
http://trade.ec.europa.eu/doclib/docs/2017/may/tradoc_155512.pdf,  

European Commission, 2015, Ex-post evaluation of the European Globalisation Adjustment 
Fund (EGF) – Final Report, Directorate-General for Employment, Social Affairs and Inclusion, 
Directorate C – Europe 2020: Employment policies, Unit C.2 – Sectorial Employment 
challenges, Youth Employment and Entrepreneurship, Brussels 

European Commission, 2017, Revised draft Report from the Commission on the mid-term 
evaluation of the European Globalisation Adjustment Fund (EGF), forthcoming 

European Commission, 2017, Report from the Commission to the European Parliament and the 
Council on the activities of the European Globalisation Adjustment Fund in 2015 and 2016, 
Brussels 

European Court of Auditors, 2013, Special Report No 7: Has the European Globalisation 
Adjustment Fund delivered EU added value in reintegrating redundant workers, Luxembourg - 
https://www.eca.europa.eu/Lists/ECADocuments/SR13_07/SR13_07_EN.pdf  

European Commission, 2017, Mid-term evaluation of the EU programme for employment and 
social innovation - EaSI - Final Evaluation Report 

European Commission (2017), Study on the assessment of the adequacy of the ESF's design to 
support human capital policies 

European Commission (2017), The Value Added of Ex ante Conditionality in the European 
Structural and Investment Funds: SWD (2017) 127 - 
http://ec.europa.eu/regional_policy/sources/docgener/studies/pdf/value_added_exac_esif_en.pdf  

European Commission (2017), Synthesis Report of ESF 2016 Annual Implementation Reports- 
https://publications.europa.eu/en/publication-detail/-/publication/4fd56da6-99bf-11e7-b92d-
01aa75ed71a1/language-en 

European Commission (2017), Performance Monitoring Report of the European Union 
Programme for Employment and Social Innovation (EaSI) 2015-2016  

European Commission (2017), Study on linkage with Country Specific Recommendations and 
supporting structural reforms (concept) 

European Commission (2017), Study on the implementation of the provisions in relation to the 
ex-ante conditionalities during the programming phase of the European Structural and 
Investment (ESI) Funds - 
http://ec.europa.eu/regional_policy/en/information/publications/studies/2016/the-
implementation-of-the-provisions-in-relation-to-the-ex-ante-conditionalities-during-the-
programming-phase-of-the-european-structural-and-investment-esi-funds  

European Commission (2017), Study on the implementation of the provisions in relation to the 
performance framework during the programming phase of the ESI Funds - 
http://ec.europa.eu/regional_policy/sources/policy/how/studies_integration/impl_exante_esif_rep
ort_en.pdf  

European  Commission  (2017),  Support  of  ESI  Funds  to  the  implementation  of  the  Country 
Specific  Recommendations 
- 
http://ec.europa.eu/regional_policy/en/information/publications/studies/2015/support-of-

in  Member  States 

structural 

reforms 

and 

to 

55 

 
european-structural-and-investment-funds-esi-funds-to-the-implementation-of-the-country-
specific-recommendations-and-to-structural-reforms-in-member-states  

“Mapping of the use of European Structural and Investment funds in health in the 2007-2013 and 
2014-2020  programming  periods”,  report  of  the  project  “Effective  use  of  European  Structural 
investments”, 
and 
http://www.esifforhealth.eu/Mapping_report.htm 

Investment 

Funds 

health 

(ESI) 

for 

Report  of 
https://ec.europa.eu/health/sites/health/files/investment_plan/docs/ev_20170227_mi_en.pdf 

the  seminar  "Strategic 

the  future  of  healthcare"  (2017), 

investments  for 

56 

 
 
 
ANNEX 2: STAKEHOLDER CONSULTATION  

Open  Public  Consultations  for  the  post-2020  Impact  Assessment  were  organised  per  group  of 
policy areas. This impact assessment will mainly consider the results from the OPC on the EU 
Support for Investment72. Any relevant results from OPCs regarding different policy areas like 
Cohesion;  Security,  Migration  and  Asylum;  Strategic  Infrastructure;  Values  and  Mobility  will 
also be taken into consideration.  

A.  Results  from  the  Open  Public  Consultation  on  EU  funds  in  the  area  of  investment, 

research & innovation, SMEs and single market 

1. Introduction and methodology 

On 10 January 2018, the European Commission launched an open public consultation (OPC) on 
EU funds in the area of investment, research & innovation, SMEs and single market. The survey 
was  conducted  on  the  Commission  webpage  through  an  online  survey  consisting  primarily  of 
multiple-choice questions, with some open-ended questions.  

Figure 1: Country of residence 

s
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n
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250

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150

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By  the  end  of  the  consultation  on  9  March  2018,  4052  respondents  provided  valuable 
information to the Commission. All citizens, organisations and stakeholders with  an interest in 
issues related to investment, entrepreneurship, research, innovation and SMEs were welcome to 
respond  to  this  consultation.  In  total,  1808  respondents  answered  in  their  personal  capacity, 
while  2244  in  their  professional  capacity  or  on  behalf  of  an  organisation.  Replies  from 
organisations  were  received  from  Think  Tanks  (12),  Academia  (526)  and  Research  Institution 
(347). The respondents had to answer to a specific questionnaire and they also had a possibility 
to attach any relevant document. Figure 1 shows the residence of respondents73. 

72 This was a subpart of the OPC on Investment, research and innovation, SMEs and single market. 
73 1808 respondents out of 4052 answered this question 

57 

 
 
 
 
                                                 
 
 
 
 
 
Figure 2 highlights the awareness of the respondents of the European programmes in connection 
to  the topic area  to  which they answer. As the figure  shows, Horizon 2020 is  the most known 
programme. In other words, almost 9 out of 10 respondents are aware of the EU R&I programme 
Horizon 2020, which remains by far the most known EU programme among respondents. This is 
followed by ESIF (21,7%), EU Health Programme (9%), COSME (8%), EFSI (6,15%) and EaSI 
(3,15%), which are not recognized as Horizon 2020.  

Figure 2: Programme Awareness  

3616 
1000   

750 

500 

250 

0 

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2. EU support for investment 

Figure 3: EU support by policy area 

4500

4000

3500

94,69% 

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15,84% 

3837 

1034 

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7,58% 

307 

EU support for
research and
innovation

EU support for SMEs
and Entrepreneurship

No of Respondent

EU support for
investment
Percentage on total Respondent

EU support for the
single market

s
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10,00%

0,00%

As illustrated in Figure 3, due to the structure of this questionnaire, it was possible to extrapolate 
the answers of people whose replies concerned the support for investment at European level. In 

58 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
total, 642 out of 4052 replies were dedicated to this topic and, as per Figure 4, the sample covers 
all  the  countries  in  European  Union  and  it  only  shows  those  respondents  that  provided  their 
country of residence. 

Figure 4: Respondents' country of residence 

30
25
20
15
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5
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Moreover, data on the policies awareness on this specific subgroup are in line with the sample 
presented in Figure 2. The only exception is that more than 20% of the respondents are aware of 
the EFSI, compared to 6.15% in the total sample.  

As far as  the  ability of the European institutions to  intervene, respondents  believe that there is 
room  for  improvement.  According  to  their  opinion,  presented  in  Figure  5,  the  majority  of  the 
respondents  believe  that  European  institutions  are  not  sufficiently  addressing  most  of  the 
challenges  listed  above.  In  particular,  they  stress  the  inability  to  address  unemployment  and 
social  disparities,  access  to  finance  especially  for  SMEs  and  social  investment  and  social 
innovation.  

59 

 
 
 
 
 
 
Figure 5: To what extent do the current policies successful adress these 
challenges 

Ensure smooth circulation of goods both within EU and at…

Foster research and innovation across the EU

Facilitate transition to low carbon and circular economy…

Provide reliable and comparable statistics
Support capital flows and investment
Ensure fair conditions of competition in the EU
Support labour mobility
Promote financial stability
Support education, skills and training
Promote security of citizens
Promote and protect public health
Support industrial development

Ensure a clean and healthy environment and the protection…

Promote a safe and sustainable food chain

Ensure a high level of consumer protection and effective…
Facilitate digital transition of the economy, industry,…

Ensure safe, sustainable transport and mobility
Facilitate access to finance, in particular to SMEs
Ensure that existing rules are applied and enforced…
Support social investment and social innovation
Improve quality of public institutions (including digitalisation)
Reduce unemployment and social disparities

0%

25%

50%

75%

100%

EU at least fairly  addressing (fully addressed + fairly addressed)

EU not addressing (addressing at some extent + not at all)

More  interestingly,  the  respondents  on  the  EU  support  for  investments  firmly  believe  that 
currents  actions  at  European  level  bring  added  value  and  that  this  is  complementary  to  what 
Member  States  could  achieve  at  national,  regional  and/or  local  levels.  More  than  70%  of  the 
respondents affirmed that at least to a fairly good extent the EU intervention adds value. 

Furthermore,  Figure  7  shows  the  importance  that  respondents  give  to  preliminary  identified 
policy challenges that according to the European Commission should be targeted in the future. 

60 

 
 
 
 
For instance, research and innovation, the facilitation of the transition to low carbon and circular 
economy,  education,  skill  and  training  or  digitalisation  are  priorities  that  new  programmes 
should clearly address. 

Figure 7 : The Commission has preliminarily identified a number of policy 
challenges which programmes/funds in this area of investment, research & 
innovation, SMEs and single market could address. How important are these 
policy challenges in your view 

Foster research and innovation across the EU

Ensure a clean and healthy environment and the…

Reduce unemployment and social disparities

Promote and protect public health

Ensure fair conditions of competition in the EU

Facilitate access to finance, in particular to SMEs

Improve quality of public institutions (including…

Support social investment and social innovation

Promote financial stability

Ensure smooth circulation of goods both within EU and at…

Support capital flows and investment

0%

25%

50%

75%

100%

Great Importance (Very Important + Rather Important)

No Importance (Neither + Rather not important + not at all)

Finally, Figure 8 confirms the steps that should be undertaken in order to simplify and reduces 
administrative burden for beneficiaries, according to the importance given by respondents. The 
entirety of challenges listed by the Commission should be addressed in the future. In particular, 
respondents believe that simplification of rules is the most important point that could help solve 
the  administrative  burdens  for  beneficiaries.  Respondents  also  stress  an  alignment  of  rules 
between the EU Funds and a stable but flexible framework between programming periods.  

61 

 
 
Figure 8: The Commission has preliminarily identified a number of steps that 
could help to further simplify and reduce administrative burdens for 
beneficiaries under current programmes/funds. To what extent would these 
steps be helpful in your view? 

Fewer, clearer, shorter rules

Alignment of rules between EU funds

A stable but flexible framework between programming…

Better feedback to applicants

User-friendly IT tools

Extension of the single audit principle

Adequate administrative capacity

E-governance

More structured reporting

More reliance on national rules

Burden (to a large extent + to a fairly extent)

not a burden (to some extent only + not at all)

0%

25%

50%

75%

100%

3. Other Open Public Consultations.  

In  parallel  to  this  consultation,  the  Commission  conducted  different  OPC  covering  the  entire 
spectrum  of  EU  policies:  Cohesion;  Security;  Migration  and  Asylum;  Strategic  Infrastructure; 
Values  and  Mobility.  Figure  9  and  10  present  the  results  of  these  consultations  regarding  the 
respondents’ views on importance of Financial Instruments in the relevant policy area.  

For the Cohesion and Security, around 40% of the respondents believe that the insufficient use of 
Financial Instruments is an obstacle preventing the current programmes/funds from successfully 
achieving their objectives.  

Figure 9: Percentage of respondents considering the insufficient use of FIs as 
obstacles which prevent the current programmes/funds from successfully 
achieving their objectives 

EU Funds Security

Cohesion

0%

25%

50%

75%

100%

Insufficient

Sufficient

62 

 
 
  
 
For Strategic Infrastructure, around 60% of the respondents believe that the difficulty to access74 
to  Financial  Instruments  is  preventing  the  current  programmes  regarding  infrastructures  from 
successfully achieving their objectives.  

Figure 10: Percentage of respondents considering difficulty to access to financial 
instruments as obstacle which prevent the current programmes/funds from 
successfully achieving their objectives 

Strategic Infrastructure

0%

25%

50%

75%

100%

Difficulty to access

Easy to access

74 Differently from EU Funds Security and Cohesion OPCs, where respondents were asked to judge if Financial Instruments were 
insufficiently used, in the Strategic Infrastructure OPC respondents were asked to manifest their opinion about the difficulty to 
access to Financial Instruments.  

63 

 
 
 
 
                                                 
ANNEX 3: EVALUATION RESULTS 

1.  Introduction 

Annex  3  summarises  the  main  findings  of  related  programmes  relevant  for  the  InvestEU 
Programme.  This  includes  in  particular  the  various  EFSI  evaluations  and  the  findings  on 
financial instruments under sectoral regulations. 

2.  EFSI 

The European Fund for Strategic Investments (EFSI) was launched in July 2015 as a response to 
the  global  economic,  financial,  and  sovereign  debt  crisis.  It  is  currently  the  biggest  EU 
investment support instrument. It aims at mobilising EUR 500 billion of additional investment in 
infrastructure, innovation, and SME financing by end-2020. EFSI has introduced a new approach 
for  providing  investment  support,  namely  the  use  of  a  budgetary  guarantee75.  The  EFSI's  EU 
budgetary guarantee to the EIB Group amounts to EUR 26 billion. It allows the EIB to increase 
financing of projects with a higher risk-profile and to mobilise private capital. 

Given the relatively recent launch of the EFSI, most signed projects supported by EFSI have not 
yet been completed. Therefore, the evaluations performed focused on the results achieved so far 
and their expected impacts.  

Several EFSI evaluations have been conducted or are ongoing: 

  a Commission evaluation on the use of the EU guarantee and the functioning of the EFSI 

guarantee fund76 accompanied by an opinion of the Court of Auditors77, 

  an EIB evaluation on the functioning of EFSI78, and  
  an independent external evaluation on the application of the EFSI Regulation79 published 
in  November  2017.  Main  findings  of  these  evaluations  were  summarised  in  the 
Commission Communication on the Investment Plan for Europe (COM (2016) 764)80, 
  an  independent  evaluation  as  required  under  article  18  of  the  EFSI  Regulation.  The 
evaluation  was  performed  by  ICF  Mostra  (hereafter  referred  to  ICF  evaluation  and  is 
published concurrently with the InvestEU Programme proposal), and 

  an ongoing EFSI evaluation by the EIB Group (deadline for publication 30 June 2018). 

Relevance 

All  evaluation  found  that  the  EU  guarantee  proved  relevant  and  enabled  the  EIB  to  undertake 
riskier  activities  in  line  with  expectations.  The  European  Fund  for  Strategic  Investments  also 
proved  a  relevant  tool  to  mobilise  private  capital.  The  volumes  of  investment  mobilised  under 
EFSI are deemed sufficient scale to make a significant contribution to these investment needs.  

However, the evaluations have underlined some concentration in those MS with well-developed 
institutional capacities.  

75 A similar approach has been used under the EU's External Lending Mandate.  
76 http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52016SC0297&from=EN  
77 https://www.eca.europa.eu/Lists/News/NEWS1611_11/OP16_02_EN.pdf  
78 http://www.eib.org/infocentre/publications/all/evaluation-of-the-functioning-of-the-efsi.htm  
79 https://ec.europa.eu/commission/publications/independent-evaluation-investment-plan_en  
80 http://ec.europa.eu/transparency/regdoc/rep/1/2016/EN/COM-2016-764-F1-EN-MAIN.PDF  

64 

 
 
                                                 
The relevance of EFSI is also indicated by the introduction of new higher risk products reflecting 
the objective of taking on higher risk investments.  

The  Scoreboard  was  evaluated  as  a  relevant  tool  that  allows  a  consistent  approach  to  project 
presentation and to summarise appraisal conclusions. 

The  ICF  evaluation  found  the  EU  Guarantee  to  be  highly  relevant  in  permitting  the  additional 
financing to be deployed. 

Effectiveness 

These evaluations have demonstrated that the EFSI is effective in delivering concrete results and 
encouraging a sustainable increase in the low investment levels in Europe by increasing access to 
financing and mobilising private capital. 

Based on reported investment mobilised to the cut-off date of the ICF evaluation (31 December 
2017), EUR 207 billion has been mobilised by achieved signatures corresponding to 66 per cent 
of the target (and EUR 256 billion as per all approved operations corresponding to 81 per cent of 
the target). Extrapolating this trend a further 6 months with the completion of EFSI 1.0 in mid-
2018,  then  mobilised  investment  from  approved  operations  is  expected  to  come  very  close  or 
reach the 315 billion by mid-2018. 
Under  the  amended  EFSI  Regulation81 ('EFSI  2.0')  support  will  continue  towards  financing  of 
projects, leading to higher productivity and competitiveness with enhanced focus on sustainable 
investments in line with the Paris Agreement and the clean energy transition objectives.  

The EFSI is a demand driven instrument and its portfolio is concentrated in few Member States. 
However,  if  the  investment  mobilised  is  considered  relative  to  Member  States'  GDP  this 
concentration is much less pronounced. Nevertheless, to improve geographical balance the EFSI 
2.0 has already taken corrective action by strengthening the relevance of the IPE's second Pillar. 

As of 31 December 2017, the actual multiplier effect of the EFSI is broadly in line with what had 
been  assessed  at  the  outset  –  aggregate  global  multiplier  achieved  end  2017  of  13.5  against  a 
target of 15. EFSI has also been effective in mobilising private investments. Some 64 per cent of 
investment mobilised is from the private sector.  

The  ICF  independent  evaluation  found  that  the  approach  to  modelling  the  EFSI  target  rate 
appears  to  be  broadly  adequate  and  in  line  with  industry  standards  but  proposed  some  further 
developments of the model. It also concluded that the assessment of the estimation of the current 
target  rate  showed  that  the  target  rate  is  highly  sensitive  to  the  assumption  related  to  the 
correlation of defaults between individual debt operations.  

81 http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017R2396&from=EN 

65 

 
 
 
 
 
 
                                                 
Efficiency 

In  terms  of  efficiency,  the  availability  of  the  EU  Guarantee  proved  to  be  an  efficient  tool  to 
considerably  increase  the  volume  of  riskier  operations  by  the  EIB.  In  particular,  the  EFSI 
budgetary  guarantee  freezes  less  budgetary  resources  compared  to  financial  instruments,  as  it 
requires  limited  provisioning  needs  compared  to  the  level  of  financial  engagement.  In  other 
words,  it  assumes  a  contingent  liability  and  is  consequently  expected  to  achieve  economies  of 
scale that result in higher investment mobilised per euro spent. The evidence analysed as part of 
the  ICF  evaluation  also  indicated  that  the  size  of  the  EU  Guarantee  under  EFSI  1.0  was 
appropriate. 

A  budgetary  guarantee  has  also  proven  more  cost-efficient  for  the  EU  budget,  as  it  limits  the 
payment of management fees to the implementing partner. Such fees are limited to cases where 
they  are  strictly  needed  to  cover  part  of  the  implementing  partner's  costs  related  to  the 
development of an action in a specific niche, related to high risk or an unproven area. In the case 
of the EFSI, the EU is even remunerated for the EU guarantee provided under the Infrastructure 
and Innovation Window.  

In  addition,  the  ICF  evaluation  identified  no  major  issues  with  the  EFSI  governance.  The 
issues  of 
planned  publication  of  the  Scoreboard 
communication between the Secretariat and the Investment Committee have also been resolved. 
Better feedback to the Investment Committee members on the details of projects after final close 
was an identified area for improvement. 

transparency.  Some  early 

improves 

The efficiency of procedures and the time taken appear consistent with the tasks required to be 
undertaken. 

The  burden  on  project  promotors  was  generally  modest,  especially  when  establishing  a  first 
contact with the EIB Group. The appraisal procedure was considered to be difficult by a quarter 
of  promoters  interviewed,  but  this  is  not  considered  to  represent  a  need  for  any  significant 
change in procedures. 

EU added value 

The  2016  independent  evaluation  stressed  the  need  to  better  define  and  clarify  the  concept  of 
additionality.  Consequently,  the  EFSI  2.0  amended  Regulation  proposed  several  corrective 
measures to clarify the concept, the criteria and made the process more transparent.  
The  ECA  Opinion 82  on  the  early  proposal  to  extend  and  expand  EFSI  acknowledges  the 
challenge  to  determine  the  exact  amount  of  investment  mobilised  by  public  support.  In 
particular, the report claims that not all sources of finance attracted by a project are the result of 
the EU intervention. The challenge is magnified by the difficulty to determine whether private 
investment  was  crowded-in  because  of  the  EU  intervention  or  would  a  part  of  it  have  been 
mobilised even without the public support.  

82ECA Opinion No2/2016 - EFSI: an early proposal to extend and expand 

66 

 
 
                                                 
The ICF evaluation concluded in particular83: 

  Compared to EIB finance for higher risk activity (Special Activities) prior to the EFSI, 
there has been a five-fold increase in investment and clear evidence that EFSI operations 
are  characterised  by  a  higher  level  of  risk  as  compared  to  standard  (non-EFSI)  EIB 
operations.  

  Additionality.  There  is  a  need  to  further  clarify  the  concept  of  additionality  and  the 
definition  of  sub-optimal  investment  situations.  In  particular,  the  evaluation  concluded 
that EFSI operations are characterised by a higher level of risk as compared to standard 
(non-EFSI) EIB operations as required by the EFSI Regulation. However, the survey and 
interviews indicated that under the Infrastructure and Innovation Window of EFSI some 
crowding  out  may  have  occurred.  While  there  is  always  a  risk  that  market-based 
interventions  can  in  certain  cases  have  a  limited  crowding  out  effect,  more  analysis  is 
needed  to  verify  whether  the  new  measures  foreseen  under  EFSI  2.0  have  a  positive 
effect on additionality. 

  Non-financial  added  value  –  there  is  evidence  of  other  added  value  from  the  EFSI  in 
terms  of  attracting  new  investors,  providing  demonstrations  and  market  testing  of  new 
products and financing models, and support and adoption of higher operational standards 
by financial service providers. 

  Opportunity  costs  of  provisioning  EFSI  –  the  financing  of  the  EFSI  required  some 
reallocation  of  the  EU  budget  from  existing  programmes  i.e.  CEF  and  H2020  which 
increased the resources for EFSI while leading to reduced resources in these programmes. 
However, because of EFSI activity being partially focused on these programme areas, the 
adverse policy effect has been somewhat reduced. 

Coherence 

The  2016  EIB  evaluation  found  that  other  EU  programmes  and  financial  instruments  may  in 
some cases compete with the EFSI. In other cases, the EFSI and other EU programmes can be 
complementary. For example, resources from the CEF and H2020, and similarly the ESIF, could 
finance the first-loss piece of EFSI operations, where it is needed to take projects off the ground 
and  maximise  private  sector  contributions.  In  these  cases,  the  EIB,  with  EFSI  support,  can 
finance mezzanine tranches.  

The  ICF  independent  EFSI  evaluation  confirmed  the  initial  disruption  by  EFSI  under  IIW  to 
other  EU  level  financial  instruments  by  offering  similar  financial  products.  The  evaluation 
however found that the main coherence issue have since been resolved during implementation by 
re-focusing  existing  instruments  towards  new  market  segments.  The  evaluation  also  stressed 
some potential coherence issue with the financial instruments used under ESIF. The evaluation 
recommended  to  strengthen  ex-ante  assessments  and  ongoing  analysis  of  market  failures  and 
needs at a sectoral level to avoid any overlaps between products and to minimise any potential 
crowding out effects.  

83 Source: ICF Evaluation report  

67 

 
 
 
                                                 
3.  Mid-term evaluation of Connecting Europe Facility (CEF)  

the 

fields  of 

in  Trans-European  networks 

The  Connecting  Europe  Facility  (CEF)  programme  was  established  in  2013  to  support 
transport,  energy  and 
in 
investment 
telecommunications  services.  It  was  designed  to  exploit  potential  synergies  among  the  three 
sectors,  while  supporting  the  better  integration  of  their  respective  infrastructure  across  EU 
Member States. The CEF Debt Instrument (CEF DI), effective since July 2015 and building on 
the  experience  gained  with  the  Loan  Guarantee  Instrument  for  Trans-European  Transport 
(LGTT) and the pilot phase of the Project Bond Initiative (PBI), pioneered the  use of financial 
products in the three sectors. The CEF Equity Instrument (EI) is not yet in use in any of the CEF 
sectors. Support from this instrument will be provided to fund the rollout of very high capacity 
networks  in  underserved  areas,  with  an  important  leverage  effect,  through  the  Connecting 
Europe  Broadband  Fund  (CEBF)  which  is  expected  to  become  operational  in  the  first  half  of 
2018.  
In  accordance  with  the  CEF  Regulation84,  the  Commission,  in  cooperation  with  the  Member 
States  and  the  beneficiaries  concerned,  was  required  to  present  a  report  on  the  mid-term 
evaluation  of  the  CEF  to  the  European  Parliament  and  the  Council.  This  report 85  and  its 
accompanying  Commission  staff  working  document  were  adopted  by  the  Commission  on  13 
February  2018.  The  evaluation  assesses  the  programme’s  overall  performance  in  light  of  its 
general  and  sectoral  objectives,  as  well  as  compared  to  what  has  been  achieved  as  a  result  of 
national or EU action. The evaluation illustrates that after the first three and a half years of CEF 
implementation,  the  programme  is  on  track,  although  it  is  much  too  early  to  measure  results 
given  that  the  programme  implementation  is  still  at  an  early  stage.  Moreover,  the  evaluation 
showed that in all three sectors, the deployment of CEF Financial Instruments86 has been limited, 
partly  due  to  the  new  financing  opportunities  opened  by  the  European  Fund  for  Strategic 
Investments (EFSI). Other factors relate to the weak pipeline of bankable CEF-eligible projects 
available  in  the  energy  sector  at  the  time  that  the  CEF  DI  became  effective,  or  to  the  limited 
budget available for broadband projects. To date, support from the instrument has been mainly 
provided  to  projects  in  the  transport  sector,  while  only  one  broadband  project  and  one  energy 
project  were  supported under  the  predecessor  instrument,  i.e.  the  pilot  phase  of  the  PBI.  More 
projects are expected however to be supported under the instrument in 2018.  

The  evaluation  highlighted  the  positive  experience  of  blending  CEF  grants  with  Financial 
Instruments which was carried out in 2017 in transport, whereby  EUR 2.2 billion funding was 
requested for a call with an indicative budget of EUR 1 billion, which enabled the use of grants 
to maximise the leverage of private or public funds. Looking forward, the evaluation stresses that 
the  completion  of  the  trans-European  networks  will  still  require  massive  investments,  part  of 
which will depend on continued EU support. The size of the CEF programme currently makes it 
possible to address only partly the market failures identified in the three CEF sectors. Therefore, 

84 Article 27 of Regulation (EU) No 1316/2013 of the European Parliament and of the Council of 11 December 2013. 
85 COM(2018)65 
86 CEF Financial Instruments refer to the CEF Debt Instrument and the CEF Equity Instrument. 

68 

 
 
 
                                                 
the evaluation recommends that unlocking further public and private investment should continue 
to  represent  a  priority  in  the  future,  which  can  be  addressed  through  grant  financing,  but  also 
through  the  use  of  Financial  Instruments  whose  relevance  is  found  to  vary  across  the  CEF 
sectors.  To  this  end,  the  evaluation  concludes  that  CEF  Financial  Instruments  and  blending  of 
grants  with  other  forms  of  financing  (notably  from  private  sector  and  public  banks)  remain 
relevant financing intervention means from the EU budget, in particular for revenue generating 
projects. 

4.  European Energy Efficiency Fund (EEEF)  

A  significant  challenge  the  Fund  has  faced  is  the  limited  number  of  ongoing  projects  and  the 
difficulty to attract a substantial number of new ones. While identifying the exact causes of this 
development  is  an  ongoing  exercise,  some  recurring  factors  have  been  observed:  1)  local 
governments prefer working with grants that are, from their point of view, easier to manage and 
more  flexible  (especially  the  case  in  Scandinavian  countries  and  in  Eastern  Europe);  2) 
municipalities usually need to adhere to lengthy and slow public procurement processes, which 
call  for  a  simplified,  streamlined  process  regarding  Financial  Instruments  to  better  support  the 
projects targeted by EEEF – similar to the InvestEU Fund. Mitigating actions include fine-tuning 
the Fund’s marketing approach to underline that its capacity to provide financing complementing 
grants  and  increasing  the  provision  of  technical  assistance  to  ensure  municipalities  efficiently 
organise the required procurements processes.  

EEEF  also  helped  the  Commission  learn  that  the  closing  of  projects  is  facilitated  if  technical 
support is tied to use of the fund.  

5.  Private Finance for Energy Efficiency (PF4EE) 

On energy efficiency, the PF4EE instrument targets projects which support the implementation 
of  National  Energy  Efficiency  Action  Plans  or  other  energy  efficiency  programmes  of  EU 
Member  States.  The  PPF4EE  also  includes  an  Expert  Support  Facility  to  support  participating 
financial institutions to develop financial products for the financing of the national/regional EE 
schemes. 

To date the EIB have signed operations in The Czech Republic, Spain, France, Belgium, Italy, 
Portugal,  Croatia,  Greece  and  Cyprus  generating  a  portfolio  worth  of  EUR  720  million  of 
investment. The investment leverage effect would be 14.6 against an initial target of 8.  

With  regard  to  the  PF4EE  the  Mid-term  evaluation  of  LIFE  states  that  ‘There  are  issues 
regarding  the  complementarity  of  the  instrument  with  other  funding  mechanisms  supporting 
energy efficiency, especially in some Member States.’. Potential overlap with EBRD and ERDF 
loans was highlighted. The overlap with ERDF loans is also mentioned in the section on ESIF. 
However, although there are an increasing number of FIs active in the energy efficiency area, the 
size and importance of the potential market is very large. According to DG ENER it is estimated 
that an additional EUR 177 billion per year will be necessary over the period 2021-2030 to reach 

69 

 
 
 
 
the EU's energy and climate objectives for 2030. Therefore, the risk of these FIs crowding each 
other out appears minimal.  

6.  Natural Capital Financing Facility (NCFF) 

Under the NCFF, LIFE provides 10M EUR of technical assistance, and a guarantee of 50M EUR 
to support EIB investments (loans and equity) of up to 125M EUR that contribute to biodiversity 
and/or climate change adaptation objectives.  

It aims at establishing a pipeline of some 9 to 12 replicable, bankable operations that will serve 
as a "proof of concept" and demonstrate to private and public investors the attractiveness of such 
investments. This represents an innovation  which, if successful, could drive the architecture of 
natural  capital  financing.  Although  development  of  the  pipeline  has  been  slow,  the  pace  is 
picking  up  with  three  operations  now  signed,  5  additional  ones  in  the  pipeline,  and  9  more 
currently under scrutiny by EIB.  

Recommendations from the LIFE mid-term review have been implemented including increasing 
visibility  and  promotion,  and  operationalisation  of  the  support  facility.  The  implementation 
period  had  been  extended  until  2021  and  the  2018-2020  LIFE  programme  foresees  a  new 
guarantee window. Experience so far with NCFF shows that there is a niche for investments in 
ecosystem-based natural capital investments, though it is important to develop a pipeline to share 
the  experience  and  demonstrate  the  opportunities  more  widely.  The  LIFE  mid-term  evaluation 
also recommended to consider options for blending.  

7.  Marguerite Fund  

On the equity side, the Marguerite Fund described also as “The 2020 European Fund for Energy, 
Climate  Change  and  Infrastructure”  was  launched  in  2009  at  the  initiative  of  and  the  Cassa 
Depositi e Prestiti, the Caisse des Dépôts Group, KfW, the Spanish Instituto de Credito Official , 
the Polish PKO Bank Polski (PKO), the EIB and the European Commission.  

At  the  end  of  the  investment  period  of  the  Marguerite  Fund  invested  EUR  745  million  in  13 
Member States. Overall, it has invested, 31% in the TEN-T eligible projects (roads and airports), 
55%  in  the  energy  sector  including  renewables  and  14%  in  ICT.  Marguerite  Fund  has 
demonstrated its ability to  attract the private sector investments since private investors  had the 
possibility  to  invest  directly  in  the  projects.  However,  it  was  not  possible  to  attract  private 
investors at Fund level.  

Marguerite  II  (supported  by  EFSI)  will  continue  focusing  on  both  greenfield  and  brownfield 
infrastructure investments in renewables, energy, transport and digital infrastructure. 

8.  Financial Instruments under FP7 and Horizon 2020  

The  interim  evaluation  of  Horizon  2020  finds  that  Horizon  2020  provides  companies,  and  in 
particular  SMEs,  with  access  to  risk  finance  to  carry  out  their  innovation  projects,  thereby 

70 

 
 
 
 
 
addressing  an  important  market  failure.  Under  the  Access  to  Risk  Finance  programme,  5,700 
organisations have been funded and EUR 13 billion of private funds have been leveraged. The 
total investment mobilised via debt financing amounts to EUR 29.6 billion in the first three years 
of its implementation, based on a budget of EUR 2.7 billion. 

Horizon  2020's  Interim  Evaluation  has  identified  some  potential  for  supporting  breakthrough, 
market-creating innovation, but concludes that such support must be considerably strengthened. 
Only  a  relatively  small  number  of  firms  receiving  grants  under  Horizon  2020  benefitted  from 
Financial Instruments under Horizon 2020. This may hinder the scaling up of innovative firms 
that  could  become  innovation  leaders  at  EU  and  global  scale.  To  address  this  challenge, 
synergies  should  be  exploited  between  the  grant  and  non-grant  based  instruments  available  to 
firms at different stages of the innovation cycle.  

The interim evaluation concluded that:  

 

 

 

InnovFin represents a significant development in the provision of EU supported innovation 
financing  that  builds  on  the  more  modest  and  rather  disparate  schemes  that  previously 
existed. 

InnovFin  scheme  is  performing  well  against  its  main  objectives  of  improving  access  to 
finance for innovative companies and projects, and helping to address related market failures.  

InnovFin’s combination of debt financing and equity-based Financial Instruments is coherent 
overall  from  a  programme  design  perspective  and  generally  provide  high  added  value  but 
with some variation between InnovFin instruments and between countries. 

  There is an increased usage of innovative financing instruments in the EU budget under FP7 

compared to Horizon 2020.  

  Demand for InnovFin finance has been high since the launch of the facility in mid-2014: in 
its  first  phase  (2014-2017),  its  take-up  exceeded  initial  expectations,  which  required  a 
dedicated  top  up  of  more  than  80%  of  the  initial  budget  from  the  SME  window  of  the 
European Fund for Strategic Investment (EFSI).  

  Efforts  have  already  been  made  to  increase  the  synergies  between  Horizon  2020  and  other 
programmes, in particular the European Structural and Investment Funds and the European 
Fund for Strategic Investments and these can be further strengthened. The Interim Evaluation 
of Horizon 2020 points out that "since the set-up of EFSI in 2015, it has proved challenging 
to  reach  InnovFin's  objectives,  as  a  significant  part  of  the  products  deployed  overlap  with 
EFSI in terms of both risk spectrum and eligibility." Against this background, the EIB and 
DG RTD have decided to re-focus InnovFin's deployment in 2017.  

9.  SME Programmes  

The  Commission  has  already  implemented  four  generations  of  debt  Financial  Instruments  for 
SMEs.  These  programmes  have  been  subject  to  evaluations  and  close  scrutiny  by  the  Council 
and Parliament, as well as by the Court of Auditors.  

71 

 
 
 
In  particular,  the  Loan  Guarantee  Facility  for  SMEs  of  the  COSME  programme  has  been 
thoroughly  assessed  twice.  First  of  all,  by  the  European  Court  of  Auditors  in  the  context  of  a 
performance  audit,  which  comprised  the  COSME  Loan  Guarantee  Facility  as  well  as  the 
InnovFin  SME  Guarantee  Facility  of  Horizon  2020  (published  December  201787)  and  in  the 
context of the COSME interim evaluation (published January 2018).  

These assessments have shown that the Loan Guarantee Facility is working very successfully. It 
is properly designed to help SMEs, which would otherwise struggle to obtain finance, to grow 
more  in  terms  of  total  assets,  sales  and  employees  when  compared  to  the  general  SME 
population.  The  impact  of  the  facility  could  be  further  strengthened  by  better  targeting  the 
beneficiaries and coordinating better with Member State activities.  

In  response  to  the  assessments  made,  a  number  of  recommendations  are  proposed  for  the 
successor programme of COSME, such as (i) further strengthen the existing cooperation with the 
Enterprise Europe Network; (ii) a better upstream co-ordination between Financial Instruments 
for SMEs established by Member States and the successor instrument in the next MFF by using 
the existing SME Envoys Network as an information exchange forum; (iii) reduce administrative 
burden for SMEs and financial intermediaries. 

The COSME interim evaluation recommends that a future EU loan guarantee facility should help 
to  ensure  "a  more  level  playing  field  for  SMEs  […]  in  those  countries  where,  according  to 
current studies, the needs among SMEs are highest." As regards the existing Equity Facility for 
Growth, the interim evaluation concluded that the facility is effective. Nevertheless, it has been 
recommended  to  reduce  the  number  of  financial  products  and  to  align  the  Equity  Facility  for 
Growth with the equity facilities established under EFSI. 

Lessons learned on equity instruments for SMEs  
The interim evaluation of Horizon 2020's Financial Instruments88 assessed the 'InnovFin Equity' 
product, which focuses on early-stage finance, and concentrated on Venture Capital (VC). The 
key findings are that in a few countries, VC is readily available, reducing the need for InnovFin 
Equity, while in other geographies, particularly for start-ups and firms that are not yet bankable, 
the market gap persists, though many companies are reluctant to use equity finance because of 
the dilution of ownership involved. The interim evaluation of COSME's Financial Instruments89 
assessed the 'Equity Facility for Growth' (EFG) product, which provides VC finance focused on 
the growth and expansion stage. All surveyed SME beneficiaries report a positive impact of EFG 
financing on their growth perspectives. Difficulties facing cross-border operations by VC funds 
are  persistent,  however:  the  EU  single  capital  market  is  still  in  its  infancy,  country-specific 
barriers for investment have not gone away, and most funds are not large enough to operate on a 
pan-European basis.  

87 https://www.eca.europa.eu/Lists/ECADocuments/SR17_20/SR_SMEG_EN.pdf  
88  [citation  http://bit.ly/2vLFas5  –  section  3.4.2.  As  well  as 
 associated to Horizon 2020 (see http://bit.ly1nvSTaf) and can benefit from the programme's Financial Instruments. 
89 [citation http://bit.ly/2rKmigg ] 

the  Member  States,  several  other  countries  are 

72 

 
 
                                                 
The  Council  recognised  that  the  guarantee  instruments  in  support  of  SMEs  have  proven  their 
concrete results, inter alia due to their financial leverage effect, in fostering high-risk innovation, 
a higher wage bill and enhanced business turn-over.  

Observations made by the European Court of Auditors  
As  highlighted  already  in  the  title  of  the  dedicated  European  Court  of  Auditors’  report90,  the 
COSME  Loan  Guarantee  Facility  (LGF)  has  achieved  the  positive  results  intended,  but  needs 
some  better  targeting  of  beneficiaries  and  more  coordination  with  national  schemes.  In 
particular,  the  report  recommended  that  the  Commission  carries  out  an  assessment  of  market 
needs  and  how  EU  guarantee  instruments  can  best  respond  to  these  needs  alongside 
national/regional  instruments.  In  this  regard,  the  Commission  has  prepared  an  in-depth  market 
assessment at the level of each Member State demonstrating the market gap and the rationale for 
an intervention at EU level.  

One  of  the  conclusions  in  the  report  was  that  a  future  facility  should  better  target  viable 
businesses lacking access to finance and a better coordination should occur between central EU 
guarantee facilities and those established at national level. 

As regards the InnovFin SME guarantee facility, the report found that the loan guarantee facility 
has  helped  beneficiary  companies  grow  more  in  terms  of  total  assets,  sales,  wage  bills  and 
productivity.  However,  the  InnovFin  SME  guarantee  facility  failed  to  focus  on  companies 
carrying out innovation activities with a high potential for excellence. 

The  report  also  contains  a  number  of  recommendations  to  the  European  Commission  to  better 
target  the  guarantees  at  viable  businesses  lacking  access  to  finance  and  on  more  innovative 
businesses.  Moreover,  it  emphasises  the  importance  of  cost-effectiveness  since  similar 
instruments already exist in the member states. 

It  is  recommended  that  the  above  proposals  are  taken  into  account  when  designing  successor 
programmes, with a view to ensure the reinforcement, better targeting and broader uptake in all 
member states of those instruments that are particularly addressed to smaller businesses. 

Financing the cultural sector through Financial Instruments  

The Creative and Cultural Sectors Guarantee Facility was allocated a budget of EUR 121 million 
for the period 2014-2020 representing 9% of the Creative Europe budget. The first top up of its 
budget through the EFSI was received in 2017. A further top-up may be envisaged in 2018. The 
top-ups  of  the  budget  would  allow  a  quicker  deployment  of  guarantee  support,  reaching  more 
countries and sectors and enhancing the geographic and sectoral balance. 

In 2017, its first full year of operation, nine guarantee agreements with six financial institutions 
were  signed.  This  strong  market  response  to  its  launch  in  2016  shows  the  relevance  of  this 

90 https://www.eca.europa.eu/Lists/ECADocuments/SR17_20/SR_SMEG_EN.pdf  

73 

 
 
 
 
                                                 
instrument  to  addressing  the  financing  gap,  estimated  at  EUR1  billion  annually,  in  a 
geographically and sectoral balanced way.  

The Creative Europe mid-term evaluation found that the Guarantee Facility responds directly to 
the  needs  of  SMEs  in  the  sector,  which  have  specific  difficulties  accessing  loans  due  to  the 
nature of their business, the difficulty to evaluate intangible assets or an uncertain demand.  

10. Social sector investments 

Building on the milestone initiatives of the Social Business Initiative (launched in 2011) and the 
Social  Investment  Package  (launched  in  2013),  and  more  recently  in  the  context  of  persisting 
socio-economic  challenges  and  political  developments,  social  investments,  including  through 
support  from  Financial  Instruments,  have  been  recognized  as  strategic  policy  tools  within  the 
policy programmes of the European Commission91. 

In the social sector, four primary areas  have made the focus of investments, mostly carried out 
by the EIB Group92: (i) education and skills– including financing of educational infrastructure; 
(ii)  health,  including  infrastructure  and  equipment;  (iii)  social  housing;  and  (iv)  EaSI 
Microfinance and social entrepreneurship. 

Under  EFSI  and  as  part  of  the  toolbox  to  support  the  impact  investing  ecosystem,  a  set  of 
innovative pilot impact instruments have been developed and launched, supporting investments 
into  Social  Incubator  and  Accelerator  vehicles  or  linked  to  funds  that  provide  incubation 
services,  a  Social  Business  Angels  co-investment  facility,  both  of  which  aim  to  support  the 
provision  of  risk  capital  to  early  stage  social  enterprises,  complementing  the  range  of  funding 
instruments developed under EU’s Employment and Social Innovation programme. Last but not 
least,  a  pilot  instrument  was  developed,  with  the  aim  to  support  innovative  outcomes-focused 
Payment-by-Results  schemes  and  the  development  of  social  outcomes  contracting  models  on 
European level.  

Further, the achievements and lessons learnt from the Erasmus+ Master loan scheme should be 
taken on board. In addition, the need for patient capital for these kinds of investments should be 
recognised. 

Under EaSI and the EFSI, the European Investment Fund (EIF) has been mandated to manage a 
package  of  mutually  reinforcing  and  complementary  Financial  Instruments,  namely:  the  EaSI 
Guarantee  instrument  (to  enhance  risk-taking  and  improve  access  to  finance  for social 
enterprises,  micro-enterprises  and vulnerable  groups),  the  EaSI  Capacity  Building  Investments 
Window  (to  build  up  the  institutional  capacity  of  microfinance  institutions  and  social  finance 
providers),  the  EFSI  equity  social  impact  pilots  (to  attract  public  and  private  capital  for 
supporting  investments  in  social  enterprises),  and  the  future  EaSI  Funded  instrument  (to  the 
boost the lending capacity of microfinance institutions and social finance providers). 

91 Reflection paper on the Social Dimension of Europe. 
92 EIB Group Support for the social sector: http://www.eib.org/attachments/thematic/support_for_the_social_sector_en.pdf  

74 

 
 
 
                                                 
Besides EFSI, it is envisaged that EaSI is also complemented by EIB Group own contributions 
resulting  in  an  investment  pool  of  around  EUR  1billion,  which  in  turn  is  expected to  mobilise 
nearly EUR 2.5 billion.  

Financial 
Instrument 
in EUR M 

Indicative Budgetary 
Contributions 

Total  EaSI 

EFSI 

EIB 
Group 

Indicative 
mobilised 
volumes 

Scope of intervention 

Date 
Launched 

EaSI 
Guarantee 
(capped) 

EaSI 
Capacity 
Building 

EFSI  Equity 
Social 
Impact 
Pilots 

EaSI 
Funded 

EaSI 
Guarantee 
(uncapped) 

196 

96 

100 

- 

1530 

Capped  (counter-)  guarantee 
offered 
financial 
to 
intermediaries  to  cover  loan 
of 
portfolios 
in 
social 
microfinance 
enterprise finance. 

areas 

and 

16 

16 

- 

150 

27 

- 

- 

- 

- 

(Quasi-)  Equity 
aimed  at  building  up 
institutional 
capacity 
financial intermediaries. 

investments 
the 
of 

Equity  investments  early-stage 
innovative  social  enterprises 
via  social  incubation  facility, 
business angel co-investments 
and payment-by-results pilot. 

200 

67 

- 

133 

300 

Senior  and  subordinated  loans 
channelled  primarily  to  non-
bank financial intermediaries to 
boost  their  capacity  to  on-lend 
to 
social 
enterprises. 

micro- 

and 

Jun 2015 

Dec 2016 

Oct 2016 

2018H1 

400 

20 

100 

280 

600 

relief 

Uncapped Guarantee providing 
to  encourage 
capital 
mainstream  banks  to  develop 
portfolios  of  loans  for  social 
enterprises. 

EFSI 2.0 
planned 

TOTAL 

962 

226 

323 

413 

2430 

These initial experiences in a sector characterised by a relatively small size of projects and the 
related small average capital invested on, has raised the awareness on how social investment is 
an opportunity for portfolio diversification, as opposed to major economic infrastructure.  

The micro and social entrepreneurship sector responded well to financing opportunities, showing 
a  strong  demand  for  EU  funding.  Although  the  budget  for  the  EaSI  guarantee  in  support  of 
microfinance  was  significantly  increased  in  comparison  with  EPMF,  it  was  fully  used  only  in 
less  than  two  years,  necessitating  additional  investment  capacity  (doubling  of  the  guarantee 
being provided under EFSI). Higher average ticket size also contributed to the fast absorption 
of  the  facility.  By  comparison,  the  take-up  of  the  social  entrepreneurship  guarantee  has  been 

75 

 
 
 
 
 
 
more moderate due to the novelty of the instrument, while the deal flow of operations has grown 
positively  and  is  expected  to  fully  exhaust  the  initial  budget  earmarked.  Therefore,  the  EaSI 
programme has proven the capacity of EU-level Financial Instruments to deliver the objectives 
envisaged  by  the  EU  Regulation  for  micro-finance  and  social  entrepreneurship.  Deploying  the 
full  potential  shown  by  the  results  achieved  in  the  period  2015-2017  therefore  justify  its 
continuity and need for additional firepower. For scaling up and assuring sustainability of project 
results, dissemination activities are essential 

In  the realm of social infrastructures,  the  limited  use  of  the  present  EFSI  EU  guarantee for 
supporting an expanded range of social investments in the social sector, is owed to the: i) lower 
level  of  risk,  and  lower  level  of  innovation  and  thus  additionality  of  the  EU  guarantee  in  the 
context  of  PPP  projects  which  are  the  primary  method  for  engaging  private  finance  for  such 
developments, and ii) the immaturity of the overall social investment market associated with the 
development  and  design  of  interventions  to  deliver  social  outcomes  using  social  or  private 
finance.  

The  moderate  pipeline  development  of  the  EFSI  pilots  signals  a  market  segment  still  in 
development,  with  significant  capacity  building  needs  and  long  lead  times  to  market  in  the 
absence  of  dedicated  technical  support  made  available  alongside  the  Financial  Instruments.  At 
the  same  time  the  transactions  approved  under  the  EFSI  social  impact  pilots  represent  the 
development  of  replicable  models  of  access  to  finance  for  potentially  excluded  social  ventures 
and future potential to scale93.  

The  experience  over  the  period  of  EaSI  implementation  (2015-2017)  as  demonstrated  by  the 
quick  absorption  of  the  budgetary  resources,  coupled  with  a  growing  deal  flow  and  increased 
absorption capacity of the sector as a whole, show there is a largely untapped demand. Building 
up  the  social  finance  market  will  continue  with  the  resources  currently  available  until  202094. 
However,  without  a  consequential  allocation  of  resources  for  social  EU-level  Financial 
Instruments  in  the  period  2021-2027,  supporting  ESF  and  other  funding  instruments,  the  EU 
efforts for building up market structures in support of microfinance and social enterprise needs 
would be seriously compromised. 

EaSI programme - the mid-term evaluation 

This  section  includes  the  main  conclusions  regarding  Financial  Instruments  from  the  mid-term 
evaluation of the EaSI programme (2017): 

“Financial  Instruments  under  the  EaSI  Microfinance  and  Social  Entrepreneurship  axis  have 
been relevant both in terms of its general objectives and the stakeholders’ needs. Existing market 
imperfections  in  both  the  Microfinance  and  Social  Entrepreneurship  markets,  along  with 
financial gaps between supply and demand of finance in a majority of Member States, suggest 
the  need  to  continuously  promote  financial  inclusion  through  increasing  availability  and 
accessibility of finance for vulnerable people."  

93 The signalling effect of the pilot PbR instrument in particular for the development of outcomes-based contracting and social 
innovation, including unlocking innovation in public service delivery, is of particular importance. 
94 The EaSI Financial Instruments allocations have been already absorbed; without the 2017 EFSI 2.0 top-up allocation, the EU 
support in this field would have already come to a halt.  

76 

 
 
                                                 
“Additionally,  in  some  Member  States,  the  market  for  lending  to  social  enterprises  remains 
undeveloped”.  

“In order to reach the most vulnerable social enterprises, which should be a core target group 
according  to  the  EaSI  regulation,  a  recommendation  is  for  the  EIF  to  widen  its  reach  by 
encouraging  financial  intermediaries  to  reach  the  social  enterprises  most  in  need  of  financial 
support.”  

“In terms of relevance in the light of stakeholder needs, financial intermediaries benefitting from 
EaSI  Microfinance  and  Social  Entrepreneurship  support  can  provide  loans  at  better  terms 
thanks to the instrument. The guarantees have helped to overcome previous barriers preventing 
final beneficiaries to access finance, suggesting it is well designed and fit for its purpose."  

“[The] amounts allocated to the axis are insufficient to meet demand and ensure a continuation 
of support beyond one cycle.”  

“The  EaSI  Microfinance  and  Social  Entrepreneurship  axis  has  been  efficient  in  increasing  the 
availability of and access to finance as the supply of financing has increased. Clear quantitative 
changes  are  increased  lending  volume,  number  of  loans  and  number  of  beneficiaries,  in 
particular for microfinance. Moreover, these quantitative effects would not have materialised or 
done so at a slower pace in the absence of the EaSI Microfinance and Social Entrepreneurship 
axis,  as  financial  intermediaries  would  not  have  been  able  to  offer  similar  products  without 
support  from  EaSI.  Evidence  of  qualitative  changes  is  however  scarce.  Moreover,  financial 
intermediaries  have  not  reported  information  of  the  provision  of  monitoring  and  training  for 
more than half of the final beneficiaries at the end of 2016”.  

 “In  addition,  the  overwhelming  demand  for  the  financial  guarantee  under  EaSI  Microfinance 
and Social Entrepreneurship has put pressure on the budget. As 2/3 of the allocated amount was 
used  already  after  one  year,  the  EIF  will  run  out  of  funds  for  the  Microfinance  and  Social 
Entrepreneurship  axis  before  2020.  This  suggests  that  the  allocated  budget  for  the  axis  is  not 
optimal  nor  sufficient  for  EIF’s  long-term  goals  to  provide  the  financial  guarantee  for  two  or 
three cycles”. 

 “With  regard  to  Microfinance  and  Social  Entrepreneurship,  there  is  not  always  coherence 
between the EaSI Financial Instrument and national and regional policies, as goals and actions 
of the EaSI Financial Instrument are not always aligned with national and regional policies or 
interests. To maintain complementarity, nevertheless, the EIF undertakes efforts to ensure their 
achievements do not interfere with programmes already implemented and that the EIF’s actions 
are complementary”. 

“The EaSI programme EU added value is widely acknowledged, in particular with regards to the 
cross  border  partnerships  and  the  exchange  of  good  practices.  For  example,  one  of  the  key 
features of PROGRESS is to be the most suitable to build EU wide networks and partnership as 
well as produce EU wide deliverables that are not top priority at other governance level, such as 
databases, studies, policy experimentations, capacity building and mutual learning activities or 
support for EU networks focused on social exclusion and poverty prevention”.  

77 

 
 
“The EaSI Financial Guarantee appears to fill a clear gap in the supply of microfinance. Should 
EaSI  be  discontinued  this  would  have  repercussion  on  many  challenges,  in  particular  in  the 
employment  field.  In  such  a  scenario  it  would  be  unlikely  that  other  funding  schemes  at  e.g. 
national level would be able to support policy experimentations across different Member States”.  

“With regard to Microfinance and Social Entrepreneurship, the support for the social investment 
market would most likely slow down without funding from EaSI, leading to fewer social business 
across the EU and thus fewer employment opportunities in these sectors”. 

Erasmus+ Student Loan Guarantee Facility - the mid-term evaluation  
The  Erasmus+  Student  Loan  Guarantee  Facility 95  is  an  EU-supported  loan  scheme  for 
transnational  studies  at  master  level.  The  scheme  has  been  developed  in  the  context  of  the 
Erasmus+ Programme to facilitate access to finance for postgraduate students (regardless of their 
social  background)  to  undertake  a  master  degree  at  a  university  (or  other  higher  education 
institution) abroad. 

By means of combined risk sharing at the individual level (90 % first loss guaranteed) and at the 
portfolio  level  (max.  18  %  of  the  portfolio  guaranteed),  the  facility  limits  the  Commission's 
maximum risk exposure to 16.2 %, with a target leverage of 6.2. The individual loans are limited 
to EUR 12,000 for a one-year Master degree programme or EUR 18,000 for a Master degree of 
more than one year. 

By  now  up  to  EUR  160  million  is  available  to  students  in  Master  loans  via  6  financial 
intermediaries established in 6 Erasmus+ Programme Countries (ES, FR, UK, TR, LU & CY), 
enabled  through  EUR  26.6  million  in  7  EU  guarantee  agreements.  The  first  Erasmus+-
guaranteed Master loans were disbursed in June 2015. By end 2017 357 students have benefited 
from EUR 4.2 million in EU-guaranteed Master Loans. 

The  section  below  summarises  the  main  conclusions  regarding  the  Student  Loan  Guarantee 
Facility from the mid-term evaluation of the Erasmus+ programme (2017): 

Relevance 

“After some delays in kicking-off the implementation and just two years of active launch of the 
facility, take-up rates are well below initial expectations. (…)While the facility addresses a real 
problem  and  while  there  is  a  case  to  use  Financial  Instruments  to  address  this  problem,  the 
facility  is  focused  on  a  segment  which  has  less  potential,  in  terms  of  volumes,  than  initially 
anticipated.” 

“Overall the facility has an added value / a gap to fill mostly in Southern, Central and Eastern 
European countries where a lot remains to be done to achieve full portability. (…) The design of 
the  SLGF,  whereby  parental  guarantee  cannot  be  required  by  the  financial  intermediary  is  a 
welcome attempt to cover those from lower socio-economic background.” 

“First  data  from  Spain  tend  to  indicate  on  the  contrary  that  the  SLGF  is  as  effective  as  the 
Erasmus  programme 
from  non-academic 
backgrounds.” 

the  participation  of  students 

in  promoting 

95 https://ec.europa.eu/programmes/erasmus-plus/opportunities/individuals/students/erasmus-plus-master-degree-loans_en 

78 

 
 
                                                 
Coherence 

“The SLGF complements the EU toolbox by focusing on the segment of degree mobile students. 
Synergies with national schemes, whereby the same financial intermediary implements both the 
national  and  the  EU  loan,  have  been  observed  only  in  the  case  of  France.  Some  national 
schemes also seem to be attracted by the EFSI for the same purposes than the SLGF – even if it 
has not (yet) translated itself into actual projects being financed. ” 

Effectiveness 

 “The scheme has so far not been especially effective at attracting financial intermediaries. Aside 
from the narrow focus of the facility and some national schemes already covering their market, 
financial intermediaries note the riskiness of the segment despite the EU guarantee (since it is 
capped), especially when it comes to incoming students. ” 

 “In many countries, higher education institutions would not have incentives to act as financial 
intermediaries (…) because fee levels are low or because they have limited financial autonomy. 
(…) A lot remains to be done to raise awareness levels all the way throughout the supply chain 
(among  financial  intermediaries  and  students,  but  also  among  the  multipliers  –  e.g. 
universities).” 

“First  final  beneficiaries  are  generally  satisfied  with  the  loan,  which  has  been  instrumental  in 
triggering their mobility. In total, 70% of the first beneficiaries (n=44) said they would not have 
been able to study for their Master abroad without the E+ loan. ” 

EU added value 

“In countries covered and for the limited number of final beneficiaries concerned, the main EU 
added value is to lead to reduction in  interest rates, the removal of the guarantor/  collateral / 
resource requirement or the opening of new product lines. ” 

“The benefits of the EU guarantee are thus adequately passed on to students when comparing to 
market rates, even if some beneficiaries did complain about the interest rate.” 

Efficiency 

“The  option  of  creating  a  financial  instrument  with  a  leverage  effect  of  6.2  minimum  is  cost-
efficient – especially compared with the alternative of directly administering the loans.” 

79 

 
 
 
 
 
ANNEX 4: SCOPING PAPERS 

This section includes scoping papers for all proposed policy Windows approved by the Financial 
Instruments Interservice Expert Group.  

1. Sustainable Infrastructure Window 

A.  Policy Drivers, Scope and Context 

Sustainable investment in infrastructure96 will be fundamental in order to fulfil the UN Agenda 
2030 and its SDG and the subsequent objectives of the Paris Agreement adopted by the EU and 
the rest of the world in 2015, and as such will have to be well-reflected in and supported by the 
EU's  main  centrally  managed  fund.  These  commitments  link  directly  with  the  sustainability 
policies and targets set out in the EU, including the 2030 Climate and Energy Framework.97 To 
that  end,  EU  will  have  to  draw  on  its  policy  framework  embedded  within  the  ETS,  the  Effort 
Sharing Regulation, the Clean Energy for All Europeans Package, the Clean Mobility package, 
the  EU  environmental  acquis  and  the  recently  adopted  framework  on  the  Circular  Economy, 
Clean Air, and Nature, as well as the EU financial framework98. 

Contributing to these objectives is targeted implementation of trans-European networks (TENs) 
and  the  Gigabit  Society  Strategy  in  the  sectors  of  transport,  energy  and  telecommunications, 
which set out EU's long-term policy objectives to connect Europe in a sustainable and innovative 
manner. Focus on environmentally friendly, intelligent infrastructure, modes and systems as well 
as  alternative  fuel  deployment  is  expected  to  stimulate  EU-wide  markets  and  contribute 
decisively to facilitating the EU's transition to low-emission economy. 

Sizeable investment needs in EU infrastructure will be required to meet the EU's sustainability 
targets. These include those embedded in the UN Agenda 2030 and its SDGs as well as the Paris 
Agreement and related EU targets such as the 2030 relating to energy and climate, air pollution, 
nature99, and the circular economy as well as related TEN policy objectives. To reach the EU's 
2030 energy and climate targets, EUR 379 billion of average annual investment will be needed 
between  2021  and  2030,  mostly  in  energy  efficiency,  renewable  energy  sources,  and 
infrastructure – excluding transport infrastructure and recharging infrastructure. Circa EUR 500 
billion will be necessitated to complete TEN-T core network100 over 2021-30 and up to EUR 1.5 

96 Infrastructure in this context is broadly defined. It is more than large, cross border, network infrastructure (a concept used in 

trans-European network regulations) it refers broadly to basic infrastructure necessary for socio-economic development. 

97 Key  targets  for  the  year  2030,  a  binding  target  to  reduce  greenhouse  gas  emissions  in  the  EU  by  at  least  40  %  by  2030 
(compared to 1990), a binding target at EU-level to increase the share of renewables to at least 27 % and a target of 30% energy 
savings 

98 The financing and investment gap related to achieving the policy objectives is very big – much beyond the size of the available 
public funding, let alone the EU budget. Hence an important prioritization will be required with sustainability as an important if 
not overriding criteria 

99 Financing needs to implement the Natura 2000 network have been estimated at EUR 5.8 billion per year. Financial costs to 
implement the target of restoring 15% of degraded ecosystems have been estimated to be between EUR 0.5 to 11 billion per 
year. However not all these costs are investment costs eligible under NCFF. The 2013 ex ante assessment for NCFF estimated 
the projected market size for 2020 to be between EUR 73 million to EUR 288 million, depending on the market growth rate 
assumption, based on case study data on the number total cost of projects between 1994 and 2010. 

100  TEN-T  Work  Plans:  https://ec.europa.eu/transport/themes/infrastructure_en.  The  contribution  of 

to 
decarbonisation goes beyond the simple project by project outcome, and has as systemic impact. The TEN-T network, which 
includes  all  modes  and  multi-modal  connections,  establishes  the  basis  for  efficient  and  sustainable  transport  chains  for 
passengers and freight across the modes. An efficient TEN-T, modal shift to sustainable mode of transport and the equipment 
of TEN-T with intelligent transport systems within and between all modes or with alternative fuel infrastructure, helps further 

the  TEN-T 

80 

 
                                                 
 
trillion  if  TEN-T  comprehensive  network  and  other  transport  investments  are  included.  In  the 
field of telecommunications, an investment gap is in the order of EUR 70 billion in the areas of 
cross-border  networks,  but  also  rural,  middle  and  low  income  isolated  areas  across  the  EU.101 
These include investments that can enable important reductions CO2 as well as other priority air 
pollutants102, and/or provide alternatives for infrastructure with large impacts on natural capital. 
Approximately EUR 22 billion investment are required to achieve the objectives stated in the EU 
Urban  Waste  Water  Directive  according  to  the  information  gathered  under  the  last article 
17 Report  from  EU  Member  States  forecasts.  Forecasts  include  an  approximate  distribution  of 
the  investment  needs  as  reported  by  the  Member  States.  Investments  are  forecasted  also 
increasingly relate to the renewal, improvement and extension of the existing infrastructure. The 
total EU yearly investments in waste water infrastructure (in general) are expected to reach EUR 
25 billion per year between 2015 and 2018. 

The  European  space  industry  is  facing  tougher  global  competition.  Space  activities  are 
increasingly  open  to  private  investment  in  the  areas  of  satellite  communications,  earth 
observation  and  even  launchers.  Space  is  now  part  of  a  global  value  chain  that  increasingly 
attracts  new  companies  and  entrepreneurs,  so-called  'New  Space',  which  are  pushing  the 
traditional boundaries in the space sector. This opens up new opportunities to develop innovative 
products, services and processes which can benefit industry in all Member States, creating new 
capacities and adding value in and outside the space sector. In this context, Europe needs to act 
now  to  maintain  and  further  strengthen  its  world-class  capacity  in  space  value  chain  and  to 
optimise the benefits that space brings to society and the wider EU economy. 

Low  infrastructure  investment  rates  in  the  EU  during  the  financial  crisis  undermined  the  EU's 
ability to boost sustainable growth and competitiveness103. This was also caused by a reduction 
in investment by the governments104. Differences with regard to infrastructure investment across 
Member  States  further  undermine  European  cohesion;  a  problem  partially  addressed  by  ESI 
Funds.  Additional  complicating  factors  affect  investment  from  environmental,  maritime  and 
climate policy perspectives, related inter alia to the failure to reflect environmental costs or value 
in market prices, thus making sustainable investment less attractive notably in terms of risk vs 
short-term  gains,  market  fragmentation  for  environmental  (public)  goods  and  related 
commodities, risk avoidance and/or lack of knowledge of investors in certain areas such as the 
blue economy, poor or no access to adequate combined environmental and financial structuring 
expertise and/or SPVs that  can  enhance the attractiveness  of sustainable infrastructure pipeline 
and make it more suitable for commercial investors' uptake105.  

boosting  decarbonisation.  Further  ensuring  and  improving  the  sustainability  of  TEN-T  nodes  is  important  in  making  the 
transition to smart and low-emission mobility 

101 The figures included in the paragraph cannot be aggregated due to their different calculation methodologies and should not be 

considered exhaustive of all investment needs. 

102 Such as PM, NOx, and SOx 
103 At about 20% below the investment rates of pre-financial crisis 
104 In  addition,  information  submitted  by  national  governments  of  large  EU  economies  in  the  context  of  the  2017  European 
Semester does not indicate plans to significantly increase public investment over the medium term, while public investment is 
expected to translate into higher infrastructure spending in some of the other EU economies 
105 Noting also that these aspects, combined with volume related targets (which may be warranted to counter severe crises), have 
a  tendency  to  reinforce  market  failures  and  other  barriers  and  thus  multiple  the  competitive  disadvantage.  Strict  fiscal  policy 

81 

 
 
                                                                                                                                                             
 
Against  this  backdrop,  the  InvestEU  Fund  must  fully  reflect  the  policy  priorities  to  reach  the 
EU’s targets. Thus, investments should comply with the Paris Agreement and complementary to 
EU objectives and deliver high EU-added value rather than solely a high investment volume. The 
investment  focus  should  also  allow  a  certain  degree  of  flexibility  to  react  to  new  investment 
needs that are today not yet visible.  

B.  Rationale for an EU level investment instrument; is subsidiarity respected? 

Challenges  and  drivers  justifying  EU  level  support  (including  financial  instruments)  in  EU 
infrastructure  can  vary  significantly  depending  on  the  sectors  or  areas  under  consideration. 
Common challenges and drivers in light of subsidiarity are: 

  policy  targets  (particularly  in  the  case  of  the  energy  sector)  are  defined  in  a  collective 

manner on European scale instead of national binding targets; 

  costs occur at national/local level while benefits are realised transboundary / EU scale; 
  costs  and  benefits  of  projects  involving  several  Member  States  are  asymmetrically 

distributed among them, coordination failures; 

  network infrastructures serve as a 'public good' for the entire energy and transport system 
and  are  a  key  enabler  for  e.g.  higher  levels  of  renewables,  efficiency  and  demand 
response, and e-mobility. 

  benefits are dependent on other investments in the supply / value chain or network and/or 

entail a high first mover risk; 

  environmental  and  socio-economic  costs  and  benefits  are  not  (sufficiently)  internalised 
due for example to pricing related market failures and/or poorly designed or conflicting 
policy  frameworks  (for  instance  simultaneously  subsidizing  green  and  grey  or  brown 
activities,  contribution  to  modal  shift,  air  quality  improvements,  long  term  biodiversity 
benefits, GHG emissions reductions106); 
lack  of  interoperability  in  cross-border  services  and  similar  obstacles  preventing 
enhanced cross-border co-operation to solve transboundary (environmental) problems; 
incomplete  internal  markets  where  differing  national  regulatory  regimes  and  regulatory 
risk  still  create  barriers  to  market-based  funding,  market  entry,  weaken  enforcement  of 
environmental standards leading to free riding, etc.  

 

 

  market  size:  individual  countries  may  lack  sufficient  scale  to  be  attractive  to  private 

operators, and others are so large that regional fragmentation becomes an issue; 

  sub-optimal technical assistance and project development capacity preventing investment 
in sustainable infrastructure: "Sustainability infrastructure is a new development area and 

relating  to  government  debt  v.  GDP  ratios  (to  be  kept  in  principle  under  60%)  combined  with  the  longevity  of  infrastructure 
financing (up to 30 years or more) further adds to the unfavourable conditions for greening the EU infrastructure. These barriers 
could be overcome by emphasising advanced sustainability of the window and making that its unique selling proposition. Also 
current  positive  economic  cycle  in  the  EU  should  be  used  to  strongly  focus  on  the  most  sustainable  infrastructure  segments 
(avoid the higher crowding out risks that will come with traditional infrastructure). 
106  Examples  of  insufficiently  internalized  pricing  includes  vehicle  and  fuel  taxes  based  primarily  on  CO2  and  ignoring 
carcinogenic air pollutants such as NO2. Other examples are agriculture-related rules focusing mainly on soil and water pollution 
whilst  ignoring  methane  emissions  contributing  to  climate  change  and  PM  –related  air  pollution  over  long  distances,  or  some 
ecosystem services not priced on the market (e.g. flood control, water filtration, recreation, pollination..)  

82 

 
 
                                                                                                                                                             
support  is  needed  to  transfer  lessons  from  one  member  state  to  another,  as  well  as  to 
advise  member  states  and  local  authorities  on  how  best  to  develop  projects  in  this 
space"107 
the value of some services is proportional to the number of users, thus it is necessary to 
achieve a critical mass before having the possibility to attract private operators 

 

Articulation between EU programmes and EIB overall support 

The overall lending by the EIB, including EFSI, 2013-2017, has been stable at around EUR 70 
billion per year108. However infrastructure and environment EIB lending was less than half this 
(EUR 30billion in 2015) and has been declining.109 In the same period, a substantial contribution 
in the form of grants from EU programmes, including in the frameworks of the CEF, ESIF, and 
LIFE110, will contribute to increase the level of investment in infrastructure in the current MFF 
albeit the share of environmentally sustainable spending remains (very) low here too.111 In a span 
of  4  years  under  direct  management  the  CEF 112  has  committed  around  EUR  24  billion  to 
mobilise  over  EUR  50  billion  of  investment  out  of  which  over  10%  through  blending,  in 
sustainable infrastructure and core trans-European networks (TENs). 

EU support mechanism 

For infrastructure projects that have positive expected environmental and socio-economic values 
in support of EU policy objectives, there exists a full spectrum of financing needs (in terms of 
the  financial  viability  of  the investment):  from  financially  viable  projects  based  on  the  income 
stream  generated  by  users  and  concession  fees  in  regulated  sectors,  to  projects  not  generating 
revenues to cover investment and therefore being highly dependent on public sector/government 
support, typically in the so called "public goods" sector.  

Therefore  a  full  range  of  support  mechanisms  continue  to  be  appropriate  for  infrastructure 
including a continuation of EU-backed budgetary guarantees and financial instruments, delivered 
through  the  InvestEU  Fund,  to  complement  the  bulk  of  EU  support  to  the  sector  delivered 

107 Final Report of the HLEG on Sustainable Finance, p.35 
108 http://www.eib.org/infocentre/publications/all/operational-plan-2014-2016.htm  
109 http://www.eib.org/infocentre/publications/all/operational-plan-2018  
110  Although  LIFE  does  not  provide  direct  grant  financing  for  large  infrastructure,  LIFE  Integrated  Projects  mobilise 
complementary finance for major investments including in green infrastructure. 
111 The Life programme on climate and environment amounts to ca. 0.3% 
112 CEF-Transport budget is allocated 75% in rail sector and the rest on, inland navigation, deployment of alternative fuels (e-
charging  points),  and  multimodalities  and  traffic  management  systems.  CEF-Energy  also  played  an  important  role  in 
implementing critical missing electricity and gas projects (PCIs) to enhance the security of supply and enhance the functioning of 
the internal energy market. As a result, the EU should have achieved a well-interconnected and shock-resilient gas grid by the 
early  2020's and  CEF  will  have  capacity  to  take  the  strengthening  of  networks  a  step  forward.  Focus  must  thus  be  put  on  the 
reinforcement of the electricity transmission and distribution grids, digitalisation and smartening of the grids and deployment of 
new infrastructure solutions, particularly in the electricity storage area (including power to gas), and hydrogen 

83 

 
 
 
 
                                                 
through  calls  for  grants  and  blending,  by  the  CEF,  LIFE  and  ESIF  programmes113,  and  by  the 
EIB standard lending. 

Environment and 

(socio)economic 
benefits 

Market 

+/- 

Financial 
viability 

Approach 

+++ 

Private finance exclusively, commercial banks 

Public and promotional banks 

+ 

InvestEU Fund 

+ 

+ 

+/- 

CEF, LIFE and ESIF grants 

EIB, NPBs, etc. standard lending 

EU-backed (including through budgetary guarantees) 
financial instruments plus private finance 

+ 

+ 

+/-- 

- 

"Blending" : EU grants plus private finance from EIB 
(including EU-backed FIs), NPBs, or private investors  

EU grants plus public sector finance 

The above table illustrates an already available structured approach to assess the appropriate use 
of  EU  instruments  or  complementary  combinations  of  instruments,  to  support  investment 
appropriate  at  the  EU  level.  Full  flexibility  should  be  maintained  to  allow  for  establishing 
bundling  and  blending  instruments  throughout  the  next  MFF  following  evolving  needs  and 
maturities.  There  may  be  case  in  terms  of  economy  of  scale  for  establishing  larger  blending 
facilities within or connected to the Single Investment Fund for small instruments such as LIFE. 

Lessons learned from previous "financial instruments" programmes 
A variety of EU-backed financial instruments to support investments in infrastructure have been 
developed,  notably  the  CEF  Debt  Instrument,  PF4EE,  EEEF,  NCFF,  and  on  equity  side,  the 
Global  Energy  Efficiency  and  Renewable  Energy  Fund 114,  Broadband  Fund  as  well  as  the 
Marguerite  Fund.  Each  of  the  instruments  helped  address  specific  market  failures  in  their 
respective infrastructure areas (see Annex I). Use of such targeted instruments was reduced by 
the  creation  of  EFSI  in  2015  (demonstrating  the  need  for  and  virtues  of  a  horizontal,  market 
driven financial instrument). However, their use continues to demonstrate the need for a broad 
and flexible  range of instruments specifically tailored to  (very different) market sub segments, 
particularly when there is an EU policy objective related to sustainability and/or public goods for 

113 ESIF in the period 2014-2020 provides EUR 63.8 billion in support of the Shift towards a low-carbon economy, substantial 
envelopes are also allocated in support to Promoting sustainable transport and improving network infrastructures, Preserving and 
protecting the environment and promoting resource efficiency, and in Promoting climate change adaptation, risk prevention and 
management 
114 Operated by EIF; albeit focusing in investments in high-risk areas outside the EU, GEEREF experience and lessons learned at 
the time of its establishing remain highly relevant for promoting sustainable investment solutions in the EU. 

84 

 
 
 
                                                 
which investment levels beyond those delivered through normal commercially viable projects or 
with purely national public support. 

In general, the take up of the EFSI and CEF DI in the TENs is a delicate operation. Strong public 
good issues (e.g. for railways), complex cross border arrangements, differing national regulatory 
regimes,  complex  national  planning  and  impact  assessment  processes,  and  technology 
uncertainties can all raise project risks and thus cost of capital. The recent use of EFSI, as well as 
existing  pilot  instruments  show  that  there  are  instances  where  project  risk  or  complexity  (and 
consequent non-viability) may warrant support beyond financial instruments including advanced 
technical  assistance  available  over  a  long  period  from  pre-investment  onwards  and  grant 
financing in various modalities (e.g. including "blending"). The latter components are critical to 
step up the ESG credentials of EU supported investments in line with the EU and international 
commitments, notably the 2015 UN Agenda and Paris Agreements.  

EU-backed financial instruments and EFSI still in some regards differ. For example, the fact that 
the CEF DI is delivered via products, some of which were tested under the previous instruments 
(LGTT and PBI) has meant that the CEF DI support took the form of subordinated products in 
the  case  of  a  high  proportion  of  projects,  or  targeted  instruments  to  address  specific  market 
failures (e.g. the Green Shipping Guarantee)115.  

These  complementary  elements:  targeted  instruments  and  general  support  to  investments  are 
both important and should be maintained in the InvestEU fund. 

C.  InvestEU Fund support: Type of final beneficiaries and target groups (large corporates, 

small beneficiaries, public or private sector entities, SPVs) 

The type of final beneficiaries and target groups relating to sustainable infrastructure window of 
the  future  InvestEU  fund  will  vary  significant  depending  on  the  sector  under  consideration,  is 
dependent  on  a  number  of  factors  including  their  creditworthiness  and  project  financing 
structure,  in  addition  to  the  European  level  net  benefits  (e.g.  market  integration,  industrial 
scaling, environmental/GHG benefits).  

In the utility sectors, notably in the energy sector, project promoters would mostly come from a 
mix  of  public  (cities,  municipalities),  semi-public  and  private  sector,  such  as  transmission  and 
distribution system network operators, electricity suppliers and retailers, energy, water and waste 
service  companies  (potentially  including  IT  companies),  generation  companies,  energy 
communities,  large  property  owners  etc.  These  entities  may  be  public  sector  by  tradition 
operating  on  commercial  or  non-commercial  basis,  privatised  with  or  without  public  service 
objective,  or  recently  created  public  entities  in  nascent  markets  (e.g.  for  energy  services).  The 
InvestEU Fund is well placed to realise cross-sectoral synergies, e.g. between energy, transport 
and digitalisation.  

115 For example, In line with the findings of the evaluation of the Europe 2020 Project Bond Initiative, it should be noted that the 
LGTT  and  PBI  were  specific  tools  designed  in  particular  for  use  following  the  financial  crisis.  As  the  financial  markets  have 
improved, their applicability today is to an extent diminished. However, this does not mean that they have lost their utility. Were 
there to be another tightening of credit or other stresses on private finance, such tools would again be more relevant and would 
likely be in significant demand.  

85 

 
 
                                                 
Likewise  in  transport  and  mobility  sector,  promoters  range  from  public  and  semi-public 
corporates  operating  on  rail  infrastructures  to  SMEs  providing  infrastructure  and  mobility 
services for instance in the areas of alternative fuels and inland navigation. Large and medium 
private or public entities or SPVs also operate under concession or PPP such as in ports, airports 
and  motorways  projects,  and  as  well  to  deliver water  and  waste  water  services.  Large,  midcap 
companies  and  SMEs  operate  mobile  assets  in  all  modes  of  transport,  notably  in  shipping  and 
rail freight operations. 

In  the  sector  of  telecommunications,  project  promoters  can  be  private  and  public  and  vary 
significantly in size. It is of particular importance that smaller promoters have adequate access to 
such instruments. On the other hand, strict eligibility criteria should be imposed in relation to the 
projects deployed (contribution to EU's connectivity targets/increasing coverage, state of the art 
technology, innovative business model, etc.). 

In  the  sector  of  telecommunications,  project  promoters  can  be  private  and  public  and  vary 
significantly in size. It is of particular importance that smaller promoters have adequate access to 
such instruments. On the other hand, strict eligibility criteria should be imposed in relation to the 
projects deployed (contribution to EU's connectivity targets/increasing coverage, state of the art 
technology, innovative business model, etc.). 

In  the  blue  economy,  project  promotors  cover  the  whole  value  chain,  ranging  from  public,  to 
semi-public and private entities varying from multinational, medium size maritime businesses to 
SMEs. 

The  major  public  stakeholders  to  be  involved  include  national  space  agencies,  the  European 
Space Agency (ESA) and public authorities involved in the implementation of European space 
programmes,  space  manufacturing  and  services  industry  trade  associations  at  European  and 
national level, and intergovernmental organisations active in climate monitoring (EUMETSAT, 
ECMWF). 

Innovative  approaches  driven  by  EU  policies  or  new  and  emerging  market  trends  are  likely  to 
lead to the involvement of new categories of beneficiaries116, lacking in same case track records 
in these new business, which affects access to finance. Therefore flexible arrangements will be 
needed in terms of blending and bundling of different means of support. This will allow building 
EU experience and best practice with effective and efficient cost-sharing. 

116 Examples include cost-effective nature-based solutions/green infrastructure, for example where instead of building dams and 
other infrastructure to combat flooding, solutions involve mechanisms allowing to flood land upstream rivers or canals to manage 
water levels whilst simultaneously providing recreational and other co-benefits whilst possibly saving investment and operating 
costs  compared  with  traditional  solutions.  Other  examples  include  investments  in  green  urban  areas  (a.k.a.  Urban  Green 
Infrastructure) where restored ecosystems and new green areas help tackle environmental problems including climate change and 
deliver wider socio-economic benefits; sustainable urban infrastructure relating to low emissions and/or noise levels, e-charging 
networks etc. 

86 

 
 
 
 
 
                                                 
D.  Sectors to be targeted by the support provided under this window 

For  transport  and  energy,  relevant  large  infrastructure  projects  are  typically  single  transactions 
supported  through  debt.  However  for  small(er)  projects  and  category  of  promoters,  the  use  of 
intermediation  is  appropriate.  EFSI  and  the  CEF  DI  have  developed  a  number  of  investment 
platforms 117 .  Other  models  successfully  used  Fund  of  Fund  Approaches  with  specialized 
investment teams capable of structuring and bundling smaller and/or complex or riskier pipeline.  

InvestEU Fund should build on these initiatives and contribute to investing in developing such 
and similar platforms more widely across the different markets whilst focusing more on quality-
related  instead  of  volume  based  additionality.  In  particular,  there  is  widespread  successful 
practice amongst NPBs and several IFIs. There is thus a clear benefit to draw on greater range of 
experience and expertise than available in the EIB. 

While maturing renewable technologies would require less support (provided currently mainly at 
national  level),  the  changing  EU  regulatory  environment  may  need  to  be  complemented  by 
financial  incentives  to  ensure  that  the  2030  RES  target  is  met.  Energy  efficiency  will  remain 
among  key  challenges,  where  investment  needs  are  highest  while  significant  barriers  to 
investments persist. 

The  Fund  should  also  cover  all  environmental  investment  sectors  (waste,  water,  air,  circular 
economy),  including  innovative  sectors  such  as  green  infrastructure  and  other  natural-capital 
related projects.118 

Furthermore, new priorities for investment are emerging in areas such as urban mobility, energy 
storage,  electrification,  digital  service/broadband  infrastructures.  Achieving  such  priorities 
requires efficient allocation and an adequate level of resources. 

The  Fund  and  different  instruments  could  be  directly  available  to  all  eligible  financial 
institutions, as self-selection would lead each to concentrate on their areas of sectoral or financial 
expertise. 

E.  Financial intermediaries and private sector stakeholders to be involved and their role 

For  transport  and  energy,  relevant  large  infrastructure  projects  are  typically  single  transactions 
supported  through  debt.  However  for  small  projects  and  category  of  promoters,  the  use  of 
intermediation  is  appropriate.  EFSI  and  the  CEF  DI  have  developed  a  number  of  investment 
platforms.  InvestEU  Fund  should  build  on  these  initiatives  and  contribute  to  investing  in 
developing  such  and  similar  platforms  more  widely  across  the  different  markets.  In  particular, 

117 http://www.eib.org/projects/pipelines/pipeline/20150334 ; http://www.eib.org/projects/pipelines/pipeline/20150115  
118 Note in this context also the increasing interest from the EU legislator to track finance and investments flows from the EU 
budget  aimed  at  promoting  sustainable  development  goals.  This  is  illustrated  again  in  the  Directive  (EU)  2016/2284  on  the 
reduction  of  national  emissions  of  certain  atmospheric  pollutants,  where  the  legislator  included  two  articles  that  relate  to 
tracking EU funds for improving air quality (i.e. Article 7 on Financial support and Article 11on Reports by the Commission to 
the  European  Parliament  and  the  Council  on  the  progress  made  in  the  implementation  of  this  Directive,  including  […]  the 
uptake of Union funds to support the measures taken with a view to comply with the objectives of this Directive […].  

87 

 
 
 
                                                 
there  is  widespread  successful  practice  amongst  NPBs  and  several  IFIs.  There  is  thus  a  clear 
benefit to draw on greater range of experience and expertise than available in the EIB. The Fund 
and different instruments could be directly available to all eligible financial institutions, as self-
selection would lead each to concentrate on their areas of sectoral or financial expertise. 

Given the strategic dimension of space, there will always be a need for a strong engagement of 
the  public  sector.  However,  private  investment  is  expected  to  drive  entrepreneurship  in  some 
areas. Therefore, the role of the financial intermediaries would be to invest in equity or blended 
finance with terms and conditions adequate to the space sector (e.g. high risk, long infrastructure 
cycles); and to accompany the paradigm change in the European space sector. 

Good articulation with support provided under the "SMEs window" and  "RDI window" is also 
needed,  for  instance  to  support  SMEs,  and  projects  aiming  at  deployment  of  new  and  mature 
technologies (e-charging), which should typically be supported by the "Sustainable Infrastructure 
" window. As for the space sector, improved access to finance for small-scale equity investments 
to get the ideas off the ground (e.g. Euro 0.5-5 million) and for adequate equity investments for 
scaling up (e.g. EUR 5-25 million); some venture capital funds also argued that injecting EUR 1 
billion in equity would mark a big difference for the European space industry. This action can be 
also addressed within the "SMEs window" and "RDI window". 

As  with  the  initial  determination  of  the  FI/grant/instruments  election  eligibility,  a  structured 
project  assessment  approach  based  on  project  risk  assessment  and  EU  net  socio-economic 
benefits will need to be developed. 

In  the  sector  of  digital  infrastructures,  current  analyses  indicate  that  there  is  a  greater  need  for 
equity and hybrid products for such deployments, and that smaller players continue to have more 
difficult  access  to  capital  markets.  In  this  respect,  guarantees  for  "mainstream"  broadband 
investments  under  the  Single  Instrument  would  be  needed  to  steer,  de-risk  and  accelerate 
investments  in  the  newest  technologies.  Another  category  of  support  involve  niche  financial 
products  (SPVs),  with  a  higher  risk  profile  and  more  intensive  capital  use,  where  a  direct 
participation  is  foreseen,  together  with  private  capital  to  ensure  leverage,  in  order  to  cover 
specific areas where mild market failures exist (e.g. equity investment fund, project bonds, etc.). 

Annex I 

Lessons learned from EU-backed financial instruments in the current programme: 

  From 2015 to 2017, the EIB group approved EUR 51.3bn under EFSI, 20% in energy 119 
(11%  in  digital,  9%  in  transport 120 and  4%  on  environment  and  resource  efficiency 
infrastructure. A substantial volume of finance is to be delivered through funds. 

119 transmission and distribution infrastructure, RES, EE and smart grids 
120 PPP road and rolling stock project absorbing the bulk of financing, and as well maritime ports and airport projects and  
other projects in areas of urban development and alternative fuels 

88 

 
 
 
                                                 
  CEF  Debt  Instrument  (CEF  DI)  to  date  manages  a  portfolio  exceeding  EUR  14  billion 
and  12  projects  in  the  transport  sector,  ranging  from  PPP  in  the  road  and  rail 
infrastructure sectors to maritime and inland ports and green shipping. The up-take of the 
CEF DI in the energy and broad band sectors has so far been more limited. 
CEF DI121 and EFSI have mobilised a comparable volume of investment so far, but have 
to some extent addressed different market failures. The fact that the CEF DI is delivered 
via products, some of which were tested under the previous instruments (LGTT and PBI) 
has meant that the CEF DI support took the form of subordinated products in the case of 
a high proportion of projects, or targeted instruments to address specific market failures 
(e.g. the Green Shipping Guarantee)122.  

In  general,  the  take  up  of  the  EFSI  and  CEF  DI  in  the  TEN-T  rail  infrastructure  and 
cross-border infrastructure is still below expectations, mainly because the projects in the 
rail  infrastructure  struggle  to  show  bankable  business  cases  and  the  promoters  are  in 
general semi-public entities, and due to the complexities of projects to be implemented in 
cross-border jurisdictions. 

There has been some level of substitution effect by EFSI of projects that would have been 
suitable  for  the  CEF  DI.  EFSI  has  a  wider  scope  than  CEF  DIs  (and  arguably  less 
emphasis on projects of highest EU added value) as it does not specifically focus on the 
TEN networks or on infrastructure (for instance several operations relate to the purchase 
of aircraft, trains, buses which cannot be supported by the CEF DIs).  

However,  most  operations  eligible  under  the  CEF  DI  are  also  eligible  under  EFSI  and 
several  important  transport  projects  initially  envisaged  for  the  CEF  DI  were  eventually 
financed through EFSI123. The approach taken for EFSI, whereby EU budget is used to 
provide  a  guarantee  to  the  EIB  or  other  financial  institutions  financing  is  the  same 
approach as was taken by the CEF legacy financial instruments (i.e. PBI and LGTT) and 
the CEF FIs. 

The use of the CEF financial instruments is expected to take up during the second half of 
the  programme  when  complementarity  between  the  CEF  specific  financial  instruments 
and EFSI have been ensured by the agreement in July 2016 on a policy note refocusing 
the sole of the CEF DI on clean transport,  with an expected pipeline of 2.4bn. CEF DI 
will be focused on piloting thematic products and platforms such as green shipping124 to 

121 In  accordance  with  the  CEF  Regulation,  the  Commission,  in  cooperation  with  the  Member  States  and  the  beneficiaries 
concerned, was required to present a report on the mid-term evaluation of the CEF to the European Parliament and the Council. 
This report COM(2018) 66 final and its accompanying Commission staff working document was adopted by the Commission on 
14 February 2018 
122 For example, In line with the findings of the evaluation of the Europe 2020 Project Bond Initiative, it should be noted that the 
LGTT  and  PBI  were  specific  tools  designed  in  particular  for  use  following  the  financial  crisis.  As  the  financial  markets  have 
improved, their applicability today is to an extent diminished. However, this does not mean that they have lost their utility. Were 
there to be another tightening of credit or other stresses on private finance, such tools would again be more relevant and would 
likely be in significant demand.  
123 Grand Contournement Ouest de Strasbourg (A355), A6 Wiesloch in transport and the Transgaz "BRUA" Gas Interconnection 
Project, Italian-France electricity interconnector in energy. 
124 In  this  respect  the  successful  cooperation  between  the  EIB  and  the  Commission  to  design  instruments  addressing  specific 
market failures is illustrated for example in the case of the Green Shipping Guarantee (GSG) Programme in transport 

89 

 
 
                                                 
be  scaled  up  by  EFSI,  within  the  scope  of  the  Cleaner  Transport  facility 125,  and  on 
transaction involving third countries, notably in the energy sector. 

In 2017 the CEF DI capacity to support the rolling out of renewable technologies in the 
transport sector have been reinforced by the Commission Decision (C(2017) 7656 final) 
to allow the use of up to 450M of NER300 funds thought the CEF DI and InnovFin EDP. 

  On  energy  efficiency,  the  PF4EE  instrument  targets  projects  which  support  the 
implementation  of  National  Energy  Efficiency  Action  Plans  or  other  energy  efficiency 
programmes of EU Member States. To date the EIB have signed operations in The Czech 
Republic,  Spain,  France,  Belgium,  Italy,  Portugal,  Croatia,  Greece  and  Cyprus, 
generating  a  portfolio  worth  of  EUR  713M  of  investment.  The  final  recipient  leverage 
effect would be 14.5 against an initial target of 8. EEEF with EUR 130.3 million in 12 
projects, in 7 Member states has worked with municipalities, as it is setup to finance EER 
and RES projects for public entities at local government level. The Fund has faced is the 
limited  number of ongoing projects and the difficulty to  attract a substantial  number  of 
new  ones.  EEEF  also  helped  the  Commission  learn  that  the  closing  of  projects  is 
facilitated if technical support is tied to use of the fund. 

Under the NCFF, LIFE provides 10M EUR of technical assistance, and a guarantee of 50M EUR 
to support EIB investments (loans and equity) of up to 125M EUR that contribute to biodiversity 
and/or climate change adaptation objectives.  

It aims at establishing a pipeline of some 9 to 12 replicable, bankable operations that will serve 
as a "proof of concept" and demonstrate to private and public investors the attractiveness of such 
investments. This represents an innovation  which, if successful, could drive the  architecture of 
natural  capital  financing.  Although  development  of  the  pipeline  has  been  slow,  the  pace  is 
picking  up  with  three  operations  now  signed,  5  additional  ones  in  the  pipeline,  and  9  more 
currently under scrutiny by EIB.  

Recommendations from the LIFE mid-term review have been implemented including increasing 
visibility  and  promotion,  and  operationalisation  of  the  support  facility.  The  implementation 
period  had  been  extended  until  2021  and  the  2018-2020  LIFE  programme  foresees  a  new 
guarantee window. Experience so far with NCFF shows that there is a niche for investments in 
ecosystem-based natural capital investments, though it is important to develop a pipeline to share 
the  experience  and  demonstrate  the  opportunities  more  widely.  The  LIFE  mid-term  evaluation 
also recommended to consider options for blending. 

  On the equity side, the Marguerite Fund has invested 31% to the TEN-T eligible projects, 
in the areas of road PPP and airport, 55% in the energy sector including renewable 14% 
in ICT. Marguerite II will continue focusing on both new (“greenfield”) and expansion to 
existing  (“brownfield”)  infrastructure  investments  in  renewables,  energy,  transport  and 

125 A new thematic product is under consideration in support of projects or innovative companies pursuing projects fostering the 
decarbonisation  of  transport  and  technological  innovation  in  the  transport  sector  and  the  deployment  of  alternative  fuels 
infrastructure along the Trans-European Networks-transport (TEN-T) corridors, such as electric charging infrastructure. High risk 
debt  helping  these  pre-bankable  project  promoters  to  overcome  the  high  uncertainty  faced  during  the  ramp-up  phase  for  the 
demand in electric charging may be needed. 

90 

 
 
                                                 
digital  infrastructure.  At  the  end  of  the  investment  period  of  the  Marguerite  Fund,  the 
Fund invested EUR 745m in 13 Member States. 

  The Connecting Europe Broadband Fund is expected to set a good precedent as regards 
the  governance  structure  -  where  the  lack  of  control  by  public  shareholders  over 
individual  investment  decisions  is  set  off  against  strict  eligibility  criteria.  On  the  other 
hand, the layered structure of the Fund, while maximising leverage, generated protracted 
negotiations  and  a  relatively  unattractive remuneration  for private  investors. In  general, 
the  experience  of  the  current  MFF  shows  that  we  need  to  be  able  to  adjust  the 
instruments, throughout a programming period, to the overall economic environment and, 
if possible, to market fluctuations.  

Annex II  
Whilst progress has been made in supporting sustainable infrastructures, including for example 
low carbon network related investments in the framework of the CEF, EU support is expected to 
be  scaled  up  if  significantly  in  line  with  its  commitments  under  the  Un  Agenda  2030  and  the 
Paris Agreement as the related EU objectives embedded in the environmental acquis such as the 
energy and climate objectives for 2030 are to be fulfilled.  

In  this  regard,  and  whilst  mainstreaming  environmental  and  climate  objectives  are  expected  to 
remain a standing of not reinforced requirement, the following areas are identified: 

  Transmission infrastructure, including interconnectors and distribution networks 

  Smart grids (with close links to digitalisation and cybersecurity) 

  Renewable energy (eg all forms of offshore energy, regionally important)  

  Energy efficiency projects (developing embryonic markets and integrating the sector into 

the mainstream capital market) 

  Storage technologies (including power-to-gas,) 

  Hydrogen infrastructure (with ,links to alternative fuels)  

  CCS/U infrastructure 

In transport specifically, the following areas are identified inter alia: 

  Mobile assets for the land, inland navigation, and maritime sector (e.g. scale up current 
projects  and  schemes  in  the  scope  of  Cleaner  Transport  Facility  and  green  shipping 
including zero emission for ships, e-navigation) and the rail sector (e.g. rolling stocks) 

  Deployment of alternative fuels infrastructures (e.g. e-charging, with close links to need 

for reinforced and smart grid infrastructure) 

  New  and  upgrading  of  TEN-T  infrastructure,  including  in  rail,  inland  navigation  and 
maritime,  and  urban  nodes,  and  traffic  management  systems  (e.g.  ERTMS,  SESAR, 
ITS),  notably  for  investments  that  make  use  of  private  financing  in  their  financial 
structure. 

91 

 
 
 
In specific "environment" sectors eligible investment should include support to investments that 
are compatible with the circular economy such as: 

  Water infrastructure, including flood management 

  Waste, including recycling and re-use businesses 

  Construction  (new  circular  economy  business  models  also  based  on  extended  producer 

responsibility, full re-use design and zero waste, non-toxic material)  

  Environmentally  sustainable  investment  solution  related  to  agriculture,  forestry,  and 

fisheries. 

  New  emerging  assets:  nature  and  nature-based  solutions,  and/or  other  than  project 

financing126 

  Projects  in  the  area  of  natural  capital  tend  to  have  a  largely  public  benefit  dimension, 
delivering  public  goods  In  this  respect,  offering  a  broad  range  of  'patient  capital' 
instruments  at  EU  level  can  help.  "Fund  of  Fund"  type  solutions  may  also  be 
considered127 

In blue economy specifically, the following areas are identified inter alia: 

  Multiple use infrastructure - e.g. newly build port infrastructure need to be climate proof,  

  Maritime equipment and technologies: smart infrastructure maintenance – e.g. UAV  

  Coastal protection & resilience, coastal and maritime engineering - e.g. building with 

nature 

  Measures to tackle invasive species including related port facilities 

  Coastal and maritime tourism – e.g. sustainable and eco- tourism infrastructure, 

sustainable cruise ships 

In telecommunications specifically, the following areas are identified: 

  Deployment  of  very  high  capacity  networks  in  areas  with  milder  market  failures  (e.g. 

low income urban areas, middle income peri-urban and rural areas) 

  Full coverage with 5G networks along major terrestrial transport paths. 

In the Space sector: 

126 Including corporate finance of new business models related to circular economy such as leasing and lending based models,  
models based on extended producer liability that may (initially) come with less familiar risk profiles 
127 Risk sharing platforms and vehicles for testing new business models: sustainable investment and innovation leadership role 
requiring EU to make the first move with a view to scaling up also through replicating at Member States or sector level as market 
matures;  addressing  barriers  related  to  limited  or  lacking  track  record  (e.g.  for  nature  based  solutions)  for  investments  with  a 
status that went beyond technological proof of concept; long time lag between investment and impact (cf SPV related solutions 
addressing shortcomings of grants, etc.). 

92 

 
 
                                                 
 

 

regarding  the  infrastructure  the  target  sector  would  be  the  upstream  part  of  the  space 
integration  of 
(e.g. 
chain 
value 
satellite/launchers).  

equipment/component 

large-scale 

supply, 

regarding  climate,  the  target  sector  would  be  the  end-to-end  system  that  is  under 
preparation  in  the  context  of  the  evolution  of  the  Copernicus  programme  for  the 
monitoring of anthropogenic greenhouse gas emissions. 

93 

 
 
 
 
2. Research, Innovation and Digitalisation Window 

A.  Rationale for investment instrument at EU level in your policy area(s); is subsidiarity 

respected? 

A  decades-long  shortfall  of  public  investment  –  sharpened  by  the  recent  financial  crisis  –  has 
hampered  investment  in  research  and  innovation  in  the  EU,  be  it  in  variable  ways  across 
Member-States. This continuous underinvestment from the public and the private sector has had 
negative consequences on the leveraging of investment in research and innovation, weighing in 
turn on productivity growth and the variable standards of living across the EU128. 

Whereas the level of  overall investment is now picking up, investment in higher-risk activities 
such as Research and Innovation (R&I) remains below par; in spite of the EU's target to devote 3 
% of the gross domestic product (GDP) to R&I activities – as stated in the Europe2020 strategy 
(2010)  –  gross  domestic  expenditure  on  R&I  in  the  EU  is  stagnating  around  2%,  while  the 
United States, Japan and South Korea invest 2.8 %, 3.3 % and 4.2 % respectively. China, at 2.1 
%,  has  also  recently  overtaken  the  EU.  Moreover,  EU  venture  capital  investments  are  only  at 
one-fifth of those in the United States and remain fragmented into relatively small-sized funds.129 
Business R&I intensity in the EU stands at 1.3 % compared to almost 2 % for the United States 
and nearly triple that for South Korea, at almost 3.5 %130. 

to 

the 

in  R&I 

is  damaging 

The  resulting  underinvestment 
industrial  and  economic 
competitiveness  of  Europe  and  the  quality  of  life  of  its  citizens.  Our  societies  face  multiple, 
complex  and  urgent  challenges  that  affect  the  quality  of  life  of  our  citizens:  from  energy 
efficiency to security, climate change to ageing populations. R&I continues to play a crucial role 
in  anticipating  on  and  responding  to  these  needs,  while  underpinning  broader  EU  policy 
objectives131.  Therefore public investments in  R&I, through financial  instruments  that leverage 
private capital, are to remain a key driver of productivity, competitiveness and economic growth, 
in particular given that: 

  Two-thirds of economic growth in Europe from 1995 to 2007 derived from R&I. 

  R&I accounted for 15 % of all productivity gains in Europe between 2000 and 2013. 

  An increase in R&I investment of 0.2 % of GDP would result in an increase of 1.1 % of 

GDP, i.e. an increase five times bigger in absolute terms.132 

Although  ample  evidence  exists  that  economies  achieve  large  and  significant  returns  on  R&I 
investments,  and  that  the  latter  create  new  and  better  jobs  in  an  economy  that  is  ever  more 
knowledge-based  and  intangible  asset-intensive,  R&I  investments  from  the  business  enterprise 
sector are considerably lower in the EU than in major competing economies133.  

128 See https://ec.europa.eu/info/sites/info/files/srip-report-full_2018_en.pdf, page 37 . 
129 See http://ec.europa.eu/eurostat/statistics-explained/index.php/R_%26_D_expenditure . 
130 See https://ec.europa.eu/info/sites/info/files/srip-report-full_2018_en.pdf  
131 European Commission (2017), The Economic Rationale for Public R&I Funding and Its Impact, page 3. 
132 Ibidem. 
133 See http://ec.europa.eu/eurostat/statistics-explained/index.php/R_%26_D_expenditure. 

94 

 
 
                                                 
In the current economic context, the barriers of increased global competition to the creation and 
diffusion of R&I – including difficulties to access finance on reasonable terms – affect the whole 
research  and  innovation  cycle,  ranging  from  fundamental  research  to  commercialisation.  As  a 
result,  the  role  of  public  R&I  investments  delivered  via  financial  instruments  seems  more 
important  than  ever  before,  including  the  support  of  breakthrough  innovations  to  transform 
complicated or costly products, services, models or processes so radically that they create a new 
market; this is an area where Europe is particularly lagging behind.134 
While the conditions for access to finance have on average recovered135, in part as a result of EU 
initiatives  on  finance  (InnovFin-EU  Finance  for  Innovators  and  EFSI's  Infrastructure  and 
Innovation Window), there remain considerable cross-country differences. Specifically, financial 
markets  in  Member  States  have  different  degrees  of  development,  in  terms  of  diversity  of 
financial institutions, product offerings and risk appetite to support R&I. As a result, a continued 
focus on the design of appropriate support mechanisms which balance high risk and potentially 
disruptive innovation with moderate or incremental innovation is necessary. 

The  fragmentation  of  European  capital  markets,  regulatory  issues  (e.g.  fiscal,  insolvency, 
Solvency  II),  deal  flow  quality  and  fund  managers  performance,  alongside  weak  research  and 
innovation  eco-systems  in  many  Member  States,  hamper  the  overall  potential  of  the  EU 
economy to systematically produce products, services, business models and companies that can 
reshape  existing  and  create  entirely  new  markets.  Although  mitigation  of  these  geographical 
disparities  –  as  documented  as  well  in  the  "Interim  Evaluation  of  Horizon  2020's  Financial 
Instruments"136 – is already partly underway with the help of capacity-building actions and the 
introduction  of  a  debt  finance  product  tailored  to  "Modest  and  Moderate  Innovators" 137 , 
significant scope remains for intensifying and widening efforts to ensure more coherent levels of 
investment across the EU, including possibly through better signposting and more decentralised 
advisory structures138.  

Finance  providers  remain  rather  averse  towards  providing  financial  support  for  R&I  activities, 
which results in low credit scores and high interest charges or sub-optimal repayment terms to 
compensate for the risks perceived in the innovative technologies or ventures. In many instances, 
private  sector  financiers  and  investors  do  not  finance  uncollateralised  projects  with  unsecure 
return  prospects  due  to  the  early  stage  of  their  development,  the  capital  intensiveness  and  the 
long time to market. This is particularly relevant in the case of R&I activities with medium and 
long-term  innovation  cycles  such  as  deep  tech 139,  including  for  instance  in  the  health,  new 
advanced  materials  or  low-carbon  technologies  in  energy  or  industry  sectors  or  in  the  space 
technology  sector.  R&I-intensive  companies  that  have  outgrown  the  SME  status  and  are  not 

the  Access 

to  Finance  of  Enterprises 

134 European Commission (2017), The Economic Rationale for Public R&I Funding and Its Impact, page 5. 
135  Survey  on 
to  September  2017,  section  3.1: 
in 
https://www.ecb.europa.eu/pub/pdf/other/ecb.accesstofinancesmallmediumsizedenterprises201711.en.pdf?beb1832df4af9efa945a
5a1f7b99eeb7 
136 https://ec.europa.eu/research/evaluations/pdf/archive/other_reports_studies_and_documents/interim_evaluation_of_horizon_2
020's_financial_instruments.pdf.  
137 See http://www.eib.org/products/blending/innovfin/products/emerging-innovators.htm.  
138 As suggested in the "Interim Evaluation of Horizon 2020's Financial Instruments".  
139 "Deep  tech"  refers  to  companies  of  any  sector  that  are  "founded  on  a  scientific  discovery  or  meaningful  engineering 
innovation".  

the  euro  area  April 

95 

 
 
                                                 
catered for by measures at national/regional level or Structural Funds (under ESIF) would be the 
relevant targets for finance for R&I support, in line with the EU's ambition to provide a finance 
escalator  from  the  very  early-stage  of  company  development  over  the  scale-up,  expansion, 
renewal and consolidation stages to the extent that clear market failures are present.  

The  EU-added  value  of  the  financial  instruments  to  be  set-up  under  the  R&I  window  of  the 
Single Investment Fund are therefore set to: 

  support  high-risk  investments  in  R&I,  i.a.  in  thematic  areas  and  first-of-a-kind 
demonstration (e.g. the current InnovFin EDP) for which private investor interest is low; 
crucial  for  these  investments  is  their  anticipated  high  level  of  relevance  in  support  of 
specific EU policy objectives, such as the deep decarbonisation of the energy system and 
energy  intensive  industries;  over-fragmentation  or  compartmentalisation  of  support  due 
to the creation of a plethora of thematic instruments should be avoided.  

  Leverage  private  investments  through  thematic  investment  platforms  and  other 

innovative financial instruments (with due consideration of economies of scale); 

  address market gaps not addressed at regional or national level at all or not adequately in 

terms of volumes or risk appetite; 

  de-risk investments in innovative technologies and transfer established solutions to new 

markets; 

  address  investment  gaps  through  supporting  new  financial  instruments  and  innovative 
financing  solutions  such  as  crowd-lending  or  hybrid  instruments 140  and  cross-border 
financing options; 
foster  the  transfer  of  best  practices  between  financial  intermediaries  with  a  view  to 
encourage the emergence of a broad product offering supporting R&I activities and R&I-
intensive entities;  

 

  provide  economies  of  scale  (i.e.  Member  States  may  be  reluctant  to  create  support 

schemes on their own because of cost efficiency considerations); 

  gather EU-wide data on the R&I financing gap and make it publicly available; and 
  provide technical assistance to and improve bankability of R&I-projects across different 

sectors.  

EU  investment  in  R&I  pulls  additional  investment  by  the  public/private  sectors  and  leverages 
and complements national and regional-level investments in R&I. Horizon 2020 leveraged EUR 
13bn of private funds and mobilised via its debt financing solutions EUR 29.6bn in the first three 
years of its implementation141, based on a budget for access to risk finance under Horizon 2020 
of EUR 2.7bn. 

The R&I window will support the Commission's policy priorities by complementing the funding 
provided  under  the  9th  Framework  Programme  for  Research  &  Innovation  and  other  EU  and 
national  programmes  and  funds,  such  as  the  Innovation  Fund  established  under  the  Emission 

140 These can be forms of convertible debt, mezzanine debt, quasi equity, or other innovative financing options. 
141 European Commission (2017), Interim Evaluation of Horizon 2020, book, p. 141. 

96 

 
 
                                                 
Trading  System  (ETS).  Final  investments  may  be  combined  with  debt/equity  finance  and  EU 
grants. 

Therefore,  given  the  overall  importance  of  research  and  innovation  for  the  European  Union 
objectives and policies, appropriate financing instruments are needed to cover different stages in 
the  innovation  cycle  and  the  wide  range  of  stakeholders,  in  particular  to  upscale  and  deploy 
solutions at a commercial scale in Europe and for those to be competitive on world markets. 

B.  Policy drivers and public sector stakeholders to be involved and their role 

The objective of the instruments is to support the Commission's policy priorities, addressing key 
EU objectives to boost competitiveness, thereby creating jobs, boosting growth and investments.  

The instrument is also expected to contribute to: 

  Sustainable  Development  Goals,  address  global  challenges  linked  to  health,  energy, 
security, climate change mitigation and adaptation, decarbonisation of the economy, low-
carbon mobility and transport, water and food crisis, environmental disasters, migration, 
digitalisation, oceans, and biodiversity loss. 

  The EU’s overall industrial and economic competitiveness, including by fostering more 

and new technologies, able to stand out in the global marketplace142.  

  The EU’s scientific excellence. 
  Facilitation,  broadening  and  simplified  access  to  finance  of  R&I  projects/companies 

exposed to an important level of risk. 
  Sustainable supply of raw materials. 
  The circular economy. 

Public sector stakeholders: 

  Multilateral  development  banks,  such  as  the  EIB  Group  and  the  EBRD;  international 

organisations such as OECD, IMF, WB, and the UN. 

  National Governments and Regional authorities.  
  National promotional banks, national promotional institutions and investment agencies. 
  Public research organisations and innovation agencies. 
  Asset Management Companies funded by state budget resources. 
  Executive agencies of the European Commission. 
  Public networks supported by the European Commission. 

Their roles might include the following: 

142  For  example  the  Space  Strategy  for  Europe  has  a  strategic  objective  on  fostering  entrepreneurship  and  new  business 
opportunities, and it is also in line with the recently adopted EU industrial policy objectives. 

97 

 
 
 
 
 
                                                 
  Providing inputs on the design of the R&I window. 
  Taking part in the governance of the R&I window. 
 
  Matching and co-investing with the EU/MS-level equity/debt instrument in funds or final 

Implementing the R&I window. 

beneficiaries 

  Provision of technical assistance. 

C.  Financial intermediaries to be involved and their role 

Financial  intermediaries  must  be  public  and  private  entities  that  aim  to  provide  finance  and 
technical assistance. 

Such  entities  may  include  national  promotional  banks  and  other  national  promotional 
institutions, public authorities, commercial banks, counter-guarantee associations, private equity 
funds,  VC  funds,  Corporate  Ventures,  philanthropic  institutions,  investment  firms,  Special-
Purpose-Vehicles (SPVs), co-investment schemes and other alternative suppliers of finance. 

The role of the financial intermediaries will be to: 

  Provide debt, equity and hybrid finance to final beneficiaries. 
  Take on (part of) the risk and co-invest in the products. 
  Report on the effects (jobs, growth data, and success stories). 
  Providing inputs on the design of specific products.  

Ultimately,  diversification  in  the  range  of  possible  financial  intermediaries  and  financing 
products is important to deliver the financing to target audiences depressed by a financing gap 
that cannot be addressed by the market alone. It is important, however, that these intermediaries 
are established in the EU-EEA or in countries associated to EU programmes, to ensure cohesion, 
cost efficiency and minimise red tape. 

D.  Private-sector stakeholder organisations, associations or business groups to be involved 

and their role 

Any pan-EU private stakeholder in the field of equity or representing final beneficiaries will be 
involved, including: 

  The European Federation of Financial Advisers and Financial Intermediaries (FECIF)  
  Association for Financial Markets in Europe (AFME)  
  European Federation of Ethical and Alternative Banks (FEBEA) 
  The European Association of Public Banks (EAPB) 
  European Banking Federation (EBA) 
  European Association of Co-operative Banks (EACB) 
  AECM - European Association of Guarantee Institutions 
 
  European  Crowdfunding  Network  (ECN)  and  European  Equity  Crowdfunding 

InvestEurope (private equity and VC) 

Association (EECA) 

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  ASTP-Proton  (knowledge  and  technology  transfer  offices  and  professionals)  and  FICPI 

(International Federation of Intellectual Property Attorneys) 

  EBN (incubators, accelerators, innovation centres) 
  EARTO (research and technology organisations) 
  EUROTECH and LERU (research-performing universities) 
  Sectoral Associations.  

Their roles might include: 

  Providing market input and knowledge on the R&I window; 
  Taking part in the governance of the R&I window under specific platforms. 
  Provision of technical assistance.  

Consultations  will  be  undertaken  in  the  context  of  setting  up  the  legal  base,  in  the  context  of 
evaluations and in the context of market testing instruments. 

E.  Final beneficiaries and target groups 

The  R&I  window  will  facilitate  access  to  finance  to  R&I  promoters  or  implementers  such  as 
European  Innovation  Council  beneficiaries 143 ,  European  Research  Council  grantees,  Marie 
Skłodowska-Curie  beneficiaries,  middle  market  companies,  large  companies,  stand-alone 
projects,  SPVs,  Universities,  Research  Centres,  Research  and  Innovation  Infrastructures, 
Innovation  Agencies,  and  other  R&I  driven  promoters  such  as  research  funding  foundations. 
SMEs and – where duly justified – small midcaps will be provided for under the SME window. 

Market segmentation and identifications of target groups will be done on a sectoral basis (linked 
to the fields in which the policy priorities will be implemented) and project/company life-cycle 
basis (on the basis of funding gap analyses). 

143 EIC is expected to cover the financing gap for breakthrough innovations (valley of death) between traditional grant financing 
and stage where InvestEU could intervene. According to the Expert Group assessing the investment potential of SMEs emerging 
from the SME instrument 70% of the Phase 1 beneficiaries are not investor ready. 

99 

 
 
 
 
 
 
 
                                                 
3. SME Window 

A.  Rationale  for  investment  instrument  at  EU  level  in  your  policy  area(s);  is 

subsidiarity respected? 

SMEs  are  the  engine  of  the  European  economy.  There  are  23.8  million  enterprises  in  the  EU. 
Without SMEs the EU economy would consist of only 45 000 firms. The EU´s SMEs employed 
93 million people in 2016, accounted for 67% of total private-sector employment and generated 
57% of value added in the EU-28 non-financial business sector144. About 85% of newly created 
jobs in the EU are accounted for by SMEs. However, obtaining financing in the form of debt or 
equity  is  a  major  hurdle  for  company  creation  and  growth,  to  benefit  from  new  markets  and 
opportunities outside the EU and fully exploit opportunities of Free Trade Agreements with third 
countries.  European  SMEs  rely  heavily  on  debt  finance  in  the  form  of  bank  overdrafts,  bank 
loans or leasing. Market-based instruments (e.g. equity) are only considered relevant by 12% of 
SMEs145 although in many cases equity (risk-capital) is more suitable, as small companies often 
lack collateral or have irregular cash-flows (equity does not impose specific repayment schedule, 
and hence can be less of a burden during times of economic stress).  

Providing more diversified sources of funding is necessary for increasing the ability of SMEs to 
withstand  economic  downturns  and  for  making  the  financial  system  more  resilient  during 
economic  shocks.  This  is  the  key  objectives  pursuit  under  the  Capital  Markets  Union  flagship 
priority. 

SME debt finance market: 

Following  the  financial  crisis,  higher  capital  requirements  [as  exemplified  in  the  Capital 
Requirements  Directives  (CRD)]  and  the  need  for  banks’  deleveraging,  negatively  impacted 
bank's willingness and ability to lend and to accept risk. 

This had a major negative effect on available SME bank finance across the EU. Credit standards 
tightened  considerably  and  SMEs  as  a  consequence  experienced  a  credit  crunch.  The  ECB's 
monetary  policy  has  significantly  improved  the  liquidity  situation  and  positive  economic 
developments have helped as well.  

To alleviate the negative impacts of stricter capital rules by the Capital Requirements Regulation 
(CRR) and CRD IV on the SME lending market, and in the context of credit tightening after the 
financial  crisis,  a  capital  reduction  factor  for  loans  to  SMEs  -  the  so-called  SME  Supporting 
Factor (SF) - was introduced by the CRR to allow credit institutions to counterbalance the rise in 
capital requirements resulting from the Countercyclical Capital Buffer (CCB), and to provide an 
adequate flow of credit to this particular group of companies. The SME SF was implemented as 
early as 2014, thus reducing the capital requirements for exposures to SMEs in comparison with 
the pre-CRR/CRD IV framework”).  

144 Annual Report on European SMEs 2016/2017, European Commission November 2017. 
2  Survey  on 
to  September  2017,  section  3.1: 
the  euro  area  April 
in 
to  Finance  of  Enterprises 
https://www.ecb.europa.eu/pub/pdf/other/ecb.accesstofinancesmallmediumsizedenterprises201711.en.pdf?beb1832df4af9efa945a
5a1f7b99eeb7  

the  Access 

100 

 
 
                                                 
All  of  these  activities  have  led  to  an  improvement  in  the  conditions  for  access  to  finance,  and 
they have on average recovered2, but the euro area aggregate masks considerable cross-country 
differences.  Moreover,  financial  markets  in  the  Member  States  show  different  degrees  of 
development, in terms of diversity of financial institutions, product  offerings and risk appetite. 
SMEs have no means to overcome these national differences because they rely on local/national 
providers of finance; SME financing is predominantly provided within national boundaries due 
to regulatory constraints. Cross border lending is only at a nascent stage, predominantly fuelled 
by the emergence of Fintech companies. 

The financing problem is acute for firms that are undertaking activities with significant financial, 
technological,  organisational  or  business-model  risk  and  those  wanting  to  finance  growth 
projects  which  do  not  necessarily  result  in  the  acquisition  of  fixed  assets  which  could  be 
collateralised (e.g. in the area of culture and creativity, digitisation, internationalisation146, etc.). 
Furthermore, undertaking innovative and other high-risk activities which are poorly understood 
by finance providers result in low credit scores and lead to high interest charges to compensate 
for the perceived risk.  

What is  more, especially younger and smaller  companies (including start-ups and spin-offs) or 
those requiring rather small financing amounts are faced with a  structural financing gap due to 
information  asymmetries,  lack  of  financial  track  records  and  disproportionate  dossier  costs, 
which  is  independent  of  the  economic  cycle  or  the  country  they  are  located  in.  If  financing  is 
offered  at  all,  it  is  offered  at  unreasonable  conditions  in  terms  of  interest  rates  applied, 
maturities,  repayment  terms  and  collateral  required.  This  also  applies  to  SMEs  wishing  to 
internationalise. 

These market failures – prevalent cross the EU – hinder the start-up and growth of companies. 
Companies  do  not  always  have  the  internal  funds  they  need,  and  consequently  seek  external 
financing. 

This market environment results in an access to finance gap for SMEs which have a higher risk 
profile or insufficient collateral, and such access to finance gap differs from country to country. 

Member  States,  either  at  national  or  at  regional  level,  are  trying  to  address  the  market  gaps 
within  their  boundaries  to  differing  degrees,  either  through  national  budgets  or  through  ESIF 
funding through a mix of loans and guarantees.  

The  EU-added  value  of  debt  financial  instruments  to  be  set-up  under  the  SME  window  of  the 
Single Investment Fund will be to: 

-  address  market  gaps  not  addressed  or  not  adequately  addressed  (in  terms  of  volumes, 

coverage or risk appetite) at regional or national level; 

-  address market gaps through supporting cross-border financing solutions; 

-  address  market  gaps  in  clearly  defined  underserved  economic  sectors  and  in  those 

contributing to the achievement of EU policy priorities;  

146 The  financing  problem  is  still  perceived  as  the  n°1  barrier  for  the  internationalisation  of  SMEs  outside  the  EU.  See:  Flash 
Eurobarometer 421, European Commission, October 2015. 

101 

 
 
                                                 
-  foster  the  transfer  of  best  practices  between  financial  intermediaries  with  a  view  to 
encourage the emergence of a broad product  offering  for  higher risk SMEs suitable for 
their specific financing needs;  

-  provide  economies  of  scale  (i.e.  Member  States  may  be  reluctant  to  create  support 
schemes on their own because of cost efficiency considerations – hence a EU response is 
essential to avoid even bigger market fragmentation and disparities). 

The  debt  financial  instruments  to  be  set-up  may  be  accompanied  by  technical  assistance  or 
capacity building projects where such activities are crucial to achieve a smooth implementation 
of the financial instruments.  

Equity financing market: 

Despite  the  fact  that  only  12%  of  SMEs  currently  consider  equity  financing  relevant  for  their 
business,  it  is  an  important  financing  component,  specifically  for  high-risk  start-ups  and  high 
growth  companies  that  require  significant  long-term  investments  which  do  not  produce 
immediate free cash-flows which would allow servicing debt payments nor do require the need 
for a collateral.  

Alternative  sources  of  finance,  complementary  to  bank-financing  -  including  public  equity 
markets – private equity and venture capital - are more widely used in other parts of the world, 
and should play a  bigger role in  providing financing to  companies that struggle to get funding 
especially SMEs. Having more diversified sources of financing is not only good for investment 
but is essential for making the EU financial system more resilient in the economic cycle.  

But  Europe's  capital  markets  are  still  very  fragmented  and  underdeveloped  (EU  SMEs  receive 
five  times  less  funding  from  the  capital  markets  compared  to  US)  while  capital  markets  can 
provide large amounts of funding to corporates (including SMEs).  

For  high-risk  start-ups  and  high  growth  of  companies  obtaining  equity  finance  on  reasonable 
terms is difficult for different reasons: one is the asymmetry between the information held by the 
firm and that known to the investor; and conflicts of interest between a firm's managers and its 
shareholders (the principal-agent conflict). 

Asymmetry of information happens because the company knows more about their activities and 
the likelihood of their success than potential investors do. Such investors find it more difficult to 
work out which investments are likely to give them an adequate rate of return, and so must make 
funds available on more onerous terms to compensate for the risk of a poor outcome or failure. 

The  principal-agent  conflict  arises  when  managers  are  risk-averse  and  so  avoid  starting  or 
continuing  activities  that,  in  their  eyes,  put  the  firm  in  jeopardy.  On  the  other  hand,  an 
entrepreneur  may  wish  to  start  or  continue  a  project  that  shareholders  would  like  to  stifle  or 
terminate.  Together, these  situations  can  lead  to  the  perception  by  investors  of  higher  risk  and 
hence high costs of external finance.  

While private capital for pre-IPOs and IPOs is in principle available, it is not sufficiently made 
available  for  this  particular  asset  class  of  risk  capital  investments.  Investors  consider  the 
risk/return  profile  for  venture  and  growth  capital  investments  inappropriate  and  the  cost  of 
undertaking research too high. Moreover, investors find it inefficient to invest because the funds 

102 

 
 
are very often too small. These framework conditions create a market gap for equity risk capital 
finance.  

Furthermore,  the  EU's  fragmented  internal  market  is  a  major  obstacle  to  companies'  growth. 
Different rules, taxes and standards across the Member States hamper businesses seeking to scale 
up across borders. Member States and the EIF/EIB have stepped in and provide a significant part 
of  the  equity  funding  support  for  high-risk  SMEs  –  mostly  for  the  different  stages  of 
development until the IPOs stages. Many Member States have expressed the need to help SMEs 
scaling  up  beyond  the  private  equity  markets,  notably  when  going  public  –  on  a  SME  multi-
lateral trading facilities (MTF) (which is not the regulated market). Well-developed and vibrant 
equity  markets  are  key  for  the  functioning  of  the  entire  funding  escalator.  Indeed,  when  well-
developed,  IPO  markets  stimulate  private  equity  and  venture  capital  activity  by  providing  fast 
and  profitable  exit  opportunities  or  venues  for  further  rounds  of  capital  raising.  Deep  junior 
markets (SME dedicated MTFs) can also act as a stepping stone for promising companies which 
may graduate one day to the main regulated markets. 

On  the  supply  side,  the  types  of  public  policy  instruments  deployed  include  public  VC  funds 
investing directly into companies, and public funds-of-funds investing into private VC and other 
risk-capital funds; public funds investing in private VC and other risk-capital funds; government 
loans to private financial intermediaries to finance VC investments; government guarantees for 
such investments; and tax incentives.  

interventions 

for 
Demand-side 
entrepreneurs  and  investors,  and  social  capital  development,  in  particular  facilitating  links 
between  entrepreneurs  and  investors.  Regulatory  interventions  have  focused  on  exit  markets, 
bankruptcy regulations and other framework conditions. 

include  human  capital  development,  notably 

training 

However, there are several challenges across the funding escalator best tackled at EU level: 

-  Private investors are reluctant to invest into the VC market because of lack of adequate 

returns and because of a lack of exit opportunities; 

-  VC  funds  are  not  large  enough,  therefore  are  forced  to  exit  portfolio  companies  before 
these  companies  have  developed  their  full  potential  (lack  of  capital  to  scale-up  these 
companies); 

-  Many firms are unaware of the benefits of using equity finance; 

-  Business angel capacity is underdeveloped, and exit opportunities insufficient; 

-  Many firms are unaware of the benefits of venture debt finance; 

-  Cooperation  between  start-ups  and  corporates  (including  use  of  corporate  VC)  is 

suboptimal; 

-  Start-up and scale-up markets are fragmented; 

-  Equity crowdfunding capacity is underdeveloped, and exit opportunities insufficient; 

-  Guidance  on  the  use  of  Initial  Coin  Offerings  and  their  relevance  for  the  escalator  is 

unknown; 

103 

 
 
-  IPOs on a SMEs dedicated MTFs have become less and less accessible to smaller firms 
and  the  prospect  of  Europe's  largest  financial  centre  leaving  the  EU  makes  the  task  of 
reviving public markets even more challenging (IPOs on a SME MTFs are predominantly 
concentrated on AIM – the London Stock Exchange's junior market)  

-  The environment for firms accessing public markets is inhospitable. 

The financial instruments to be set-up may be accompanied by technical assistance or capacity 
building  projects  where  such  activities  are  crucial  to  achieve  a  smooth  implementation  of  the 
financial instruments. 

The  European  added  value  of  an  EU-level  equity  instrument  (with  appropriate  accompanying 
measures) has five main components which will lead to higher absolute investment amounts and 
an acceleration of private investment: 

-  Helping achieve EU policy objectives (see section 2); 
-  Facilitating the financing of more cross-border fund investments which helps to diversify 

risk and attract and crowd-in private capital; 

-  Economies  of  scale  by  setting  up  EU-wide  harmonised  schemes  which  consequently 
lower  transactions  costs,  such  as  fees  for  entrusted  entities,  but  also  for  investors  and 
potentially investees; 

-  Demonstration  and  catalytic  effects  for  new  interventions  not  undertaken  by  Member 

States; 

-  Market building and development and sharing best practices across the EU. 

The EU-level equity instrument will complement national and regional programmes supporting 
equity investors and investees.  

B.  Policy drivers and public sector stakeholders to be involved and their role 

The objective of the instruments is to support the Commission's policy priorities of creating jobs 
and  boosting  growth  and  to  support  the  Capital  Markets  Union  flagship  priority,  as  well  as 
supporting the overall competitiveness of the European economy. Indirectly, the instruments are 
also expected to contribute to 

-  Easing the transition to a circular economy 
-  Promoting EU economic diplomacy, the internationalisation of European businesses and the 

maximum implementation of FTAs 
-  Fostering a stronger digital single market 
-  Strengthening the financial capacity of the cultural and creative sectors 
-  Supporting  farm  investments  for  restructuration  and  modernisation,  as  well  as  rural 

entrepreneurship 

-  Improving energy efficiency 
-  Decarbonising the economy 
-  Supporting breakthroughs in low-carbon and clean energy technologies 
-  Space technology development 

and to support any new policy priorities which may emerge in the future.  

104 

 
 
Public sector stakeholders, such as 

  National/regional promotional banks and other national promotional institutions. 
  National/regional innovation and environmental (sustainable investments) agencies 

are expected to play a role in the implementation of regional and national financial instruments 
as well as financial instruments established under EU polices delivered through ESIF147, and as 
such they may be consulted when EU-level financial instruments are being set up.  

European and International development banks such as EIB and EBRD may take the role of an 
implementing  partner  for  the  implementation  of  the  financial  instruments  and  Executive 
Agencies  of  the  European  Commission  and  other  public  sector  institutions  (e.g.  Council  of 
Europe Bank), public and private financial intermediaries and other third party service providers 
may play a role in the implementation of accompanying actions. 

C.  Financial intermediaries to be involved and their role 

For SME debt financing: 

In principle any type of financial intermediary which in full compliance with applicable national 
and  EU-legislation  and  is  able  to  generate  new  portfolios  of  higher  risk  SME  financing 
transactions and is able to comply with the applicable requirements of the Financial Regulation. 

However,  National  Promotional  Institutes  and  other  publicly  owned  intermediaries  may  play  a 
prominent role in the implementation of the EU instruments because of the natural alignment of 
interest to support public policy objectives.148 

For equity finance:  

Established  financial  intermediaries,  or  entities  to  be  incorporated,  that  undertake  risk-capital 
investments by providing investments in equity, quasi-equity, hybrid debt-equity and other forms 
of mezzanine finance to projects, start-ups and established companies.  

the  capacity  and  experience 

They  shall  demonstrate 
to  undertake  equity/quasi-equity 
investments,  the  ability  to  fundraise  and  attract  private  capital,  and  the  capability  to  produce 
returns  which  would  attract  more  private  investments  into  this  asset  class.  Such  intermediaries 
must also be able to comply with the applicable requirements of the Financial Regulation. 

For debt and equity finance: 

Financial intermediaries may include national promotional banks and other national promotional 
institutions,  guarantee  societies,  leasing  companies,  funds-of-funds,  private  equity  funds,  VC 
funds,  business  angel  funds,  technology  transfer  funds,  crowd-equity  platforms,  social 

147 Cohesion  policy  and  the  other  EU  policies  contributing  to  regional  development  (i.e.  rural  development  and  fisheries  and 
maritime policy) under shared management between the EU and the Member States 
148  
(NPBs) in supporting the Investment Plan for Europe (http://europa.eu/rapid/press-release_IP-15-5420_en.htm)  

Communication from the Commission: Working together for jobs and growth: The role of National Promotional Banks 

105 

 
 
 
 
                                                 
intermediaries  or  social  sector intermediaries,  special-purpose  vehicles,  co-investment  funds  or 
schemes, and tokenised funds. 

Entities targeting buy-out or replacement capital intended for asset-stripping are excluded. 

The potential public financial intermediaries referred to above may also play a role in combining 
central EU financial instruments with funding under cohesion policy. 

D.  Private  sector  stakeholder  organisations,  associations  or  business  groups  to  be 

involved and their role 

For debt financial instruments any pan-EU private stakeholder organisation which has an interest 
in the support of SME finance such as 

-  AECM 
-  NEFI 
-  EAPB 
-  UEAPME 
-  COPA-COGECA (agriculture) 

and for equity instruments, any pan-EU private stakeholder in the field of equity or representing 
final beneficiaries will be consulted, including: 

-  InvestEurope (private equity and VC) 
-  Business Angels Europe (BAE) and European Business Angels Network (EBAN) 
-  European Crowdfunding Network (ECN) and European Equity Crowdfunding 

Association (EECA) 

-  ASTP-Proton (knowledge and technology transfer offices and professionals) and FICPI 

(International Federation of Intellectual Property Attorneys) 

-  EBN (incubators, accelerators, innovation centres) 
-  UEAPME (SMEs) 
-  EARTO (research and technology organisations) 
-  EUROTECH and LERU (research-performing universities) 
-  PensionEurope 
-  FESE, EuropeanIssuers, InsuranceEurope, InvestEurope for VC and PE,  
-  Organisations representing institutional investors (e.g. ILPA) 

Consultations  will  be  undertaken  in  the  context  of  setting  up  the  legal  base,  in  the  context  of 
evaluations and in the context of market testing instruments. 

106 

 
 
 
 
 
 
 
 
E.  Final beneficiaries and target groups 

The EU-level debt instruments will focus on SMEs according to applicable EU definition, more 
specifically those which would not receive support from the market due to the perceived higher 
risk or the lack of collateral. Where justified, more dedicated support may be provided for SMEs 
or  organisations,  or  were  justified  to  small  mid-caps,  for  a  specific  sector  or  a  specific  policy 
orientation. 

The  EU-level  equity  instruments  will  focus  investments  in  SMEs  according  to  applicable  EU 
definitions  (including  the  definition  of  SME  according  to  MiFID  II)  more  specifically  those 
which activities would help achieve the EU policy priorities referred to in section 2. Where duly 
justified, investments may also be made into small midcaps.  

Targeting will be done on a sectoral basis (linked to the fields in which the policy priorities will 
be implemented) and a company life-cycle basis (on the basis of funding gap analyses).  

Equity investments may be combined (blended) with debt finance and grant funding.  

107 

 
 
 
 
4. Social Investment and Skills Window 

A.  Rationale for EU action; is subsidiarity respected? 

Social investments for a fairer and more inclusive society 

Building a more inclusive and fairer Union is a key priority for this European Commission. The 
reflection  paper  on  the  social  dimension  of  Europe149,  published  alongside  the  package  on  the 
European Pillar of Social Rights150, focuses on the profound transformations European societies 
and the labour market will undergo in the coming decade. It sets out a number of options on how 
the  Union  and  its  Member  States  can  collectively  respond,  by  building  a  Europe  that  protects, 
empowers and defends its citizens. The Rome Declaration adopted by EU leaders on 25 March 
2017 outlined the importance of a social Europe. The Social Summit for Fair Jobs and Growth, 
held  in  Gothenburg  on  17  November  2017,  further  reinforced  this  message  and  introduced  a 
social scoreboard to measure how fair and well-functioning labour markets and welfare systems 
are in the Member States151.  

In line with these developments a specific Social, Skills & Human Capital window is being set 
up within the InvestEU Fund to support investments in tangibles and intangibles assets to foster 
inclusive growth, well-being and fairer income distribution in the EU. Social cohesion and social 
capital  are  important  assets  for  an  inclusive  society  that  protects  and  empowers.  Citizens’ 
willingness  to  invest  in  society  and  ‘the  common  good’  finds  its  expression  in  many  forms, 
including  philanthropy 152 .  The  role  of  the  Social,  Skills  &  Human  Capital  window  under 
InvestEU  will  therefore  be  complementary  to  the  actions  undertaken  under  other  EU 
programmes such as the European Structural and Investment Funds that cover this policy area.  

In  macroeconomic  terms,  despite  the  ongoing  economic  recovery  in  the  EU,  poverty  and 
inequality  indicators  are  not  showing  strong  signs  of  improvement,  especially  in  the 
periphery153154, , in a context of an ageing population and accelerating transformative technology. 
During the recent economic and financial crisis, policy making put less emphasis on inequality 
and  social  inclusion  policies.  Some  Member  States  reduced  their  'smart'  future-oriented 
investments in areas such as education, training and lifelong learning. While income inequality 

149 https://ec.europa.eu/commission/publications/reflection-paper-social-dimension-europe_en  
150 The Communication COM (2017) 250 states that "In spite of recent improvements in economic and social conditions across 
Europe, the legacy of the crisis of the last decade is still far-reaching, from long-term unemployment and youth unemployment to 
risks of poverty in many parts of Europe. At the same time, every Member State is facing the rapid changes taking place in our 
societies and the world of work." 
The 20 principles and right of the pillar are available here: 
https://ec.europa.eu/commission/sites/beta-political/files/social-summit-european-pillar-social-rights-factsheet_en.pdf 
https://ec.europa.eu/commission/priorities/deeper-and-fairer-economic-and-monetary-union/european-pillar-social-rights_en 
http://data.consilium.europa.eu/doc/document/ST-8637-2017-INIT/en/pdf 
151 See: https://ec.europa.eu/commission/sites/beta-political/files/social-summit-social-scoreboard_en.pdf 
152 Philanthropy is a heterogeneous sector of actors, ranging from large family offices linked to prominent enterprises, to historic 
donations  that established  universities or  hospitals,  to  foundations established  from  privatisation of  public  companies and  new 
‘citizens foundations’ acting locally. 
153  See 
the  Great  Recession 
http://publications.jrc.ec.europa.eu/repository/bitstream/JRC109805/bp-csgzs-hp_euinequality_jrc_wp.pdf  
154  See  for  instance:  "In  It  Together:  Why  Less  Inequality  Benefits  All",  OECD  report  on  inequalities  (2015) 
http://www.tarki.hu/download/OECD2015-In-It-Together-Chapter1-Overview-Inequality.pdf  

instance:  EU-wide 

the  era  of 

inequality 

income 

(2018) 

for 

in 

108 

 
 
                                                 
has  a  measurable  monetary  dimension,  inequality  of  opportunities  is  non-monetary  and  often 
determined  by  one's  social  background:  education  and  health  are  areas  which  are  particularly 
affected  by  this155.  The  conception  of  the  present  policy  window  will  take  into  account  the 
benefits that society as a whole may obtain from those two concepts of inequality.  

Social  considerations  are  increasingly  concurring  to  shape  today's  political  agenda  of  the 
European  Commission  and  EU  Member  States.  Investment  in  the  social  inclusion,  skills  and 
human capital related economy can enhance economic opportunities, building a bridge between 
the present and the future, especially if coordinated at EU level. The social dimension within the 
InvestEU  Fund  has  to  be  understood  in  a  broad  sense,  with  intangible  investments  in  people, 
ideas  and  services  being  as  important  as  tangible  investments  in  assets  or  capital  goods  that 
characterise  the  typical  projects  financed  under  the  European  Fund  for  Strategic  Investments 
(EFSI). Investment in this area will facilitate citizens' well-being, labour market participation and 
thus  social  cohesion.  Financial  products  as  the  ones  triggered  by  the  InvestEU  guarantee  are 
repayable instruments that can complement the established role that grants at the European level 
have playing for years and help mobilise private capital. 

A  Social,  Skills  &  Human  Capital  window  under  InvestEU  can  therefore  serve  as  a  crucial 
foundation of pan-European  social innovation and productivity growth for the EU economy. It 
can also support EU actions contributing to the Sustainable Development Goals (SDGs), noting 
that contributing to the SDGs helps the EU fulfil its social agenda.156 Action at the EU level adds 
value  for  the  development  of  inclusive  and  social  financial  markets.  This  action  provides 
enhanced  access  to  both  non-financial  support  and  finance  to  micro-enterprises,  including 
vulnerable  groups,  social  enterprises,  social  economy  organisations,  social  innovators,  public 
authorities  and  social  impact  investors  as  well  as  it  creates  a  space  for  the  Social,  Skills  & 
Human  Capital  –related  economy  to  flourish  in  the  EU  internal  market.  It  also  fosters 
interlinkages  between  relevant  stakeholders  through  the  creation  of  European  networks  – 
between social economy enterprises, investors and institutions. This can, in turn, make accessible 
a range of enhanced social services to citizens  - for instance, in healthcare, long-term care and 
education - in an inclusive and equitable way.  

The establishment of a distinct Social, Skills & Human Capital window under the InvestEU Fund 
sends  an  important  and  visible  political  signal  that  "social  issues"  continue  to  matter  to  the 
European Commission in the next MFF. This is especially important against the backdrop of the 
recently adopted European Pillar of Social Rights, for which the InvestEU Fund should serve as 
one of the delivery mechanisms. EU-level action in the social enterprise and social economy will 
have  to  be  multifaceted  in  order  to  cover  the  heterogeneous  range  of  activities  and  types  of 
investment  that  characterise  the  sector,  but  can  be  grouped  into  common  policy  drivers  and 
common  financial  products.  In  this  context,  the  several  sub-sectors  forming  the  wider  Social, 
Skills  &  Human  Capital  economy  can  be  interlinked  by  a  common  intervention  rationale  and 
tend to complement each other. 

155 See JRC report: What makes a fair society? Insights and evidence (2017). Available at: 
http://publications.jrc.ec.europa.eu/repository/bitstream/JRC106087/kj0716182enn.pdf  
156 COM(2016)739 final 

109 

 
 
                                                 
Well-designed  support  from  the  Social,  Skills  &  Human  Capital  window  should  be  an 
opportunity  to  complement  existing  EU  support  by  providing  beneficiaries  and  target  groups 
with the right financial products to start up, grow and develop activities in a truly pan-European 
dimension, where the size of the home market does not constrain the beneficiaries' development 
and access to capital paths. It will also provide more opportunities for stakeholders that have a 
social  mission  and  that  select  investments  in  a  logic  that  goes  beyond  the  traditional  financial 
rate  of  return.  The  design  of  instruments  should  take  account  of  the  needs  of  civil  society 
organisations or foundations to access funding for innovative approaches related to social work 
and youth work and, more in general to provide support to disadvantaged groups.  

Social investment as a pillar for the knowledge society and economic growth 

Social, Skills & Human Capital investments contribute substantially to the competitiveness and 
growth  of  the  European  economy  in  several  ways.  They  help  to  develop  a  better  skills,  well-
being  and  competence  base  of  its  citizens,  who  need  to  be  better  equipped  in  meeting  new 
challenges  in  a  context  of  transitional  labour  markets  impacted  by  digitalisation,  regional 
industrial transition and a changing technological landscape157. These are also the cornerstones 
for the later investments in research, innovation, digitalisation and SMEs under other windows of 
the InvestEU initiative. 

The  substantial  returns  on  investment  from  this  type  of  financing  (short-term  as  well  as  long-
term) are yielded on the private level (individual & institutional) as well as on the public level158. 
Such  shared  public-private  benefits  should  also  provide  a  sound  basis  for  public-private 
investment.  For  instance,  to  date  public  investments  are  made  primarily  for  primary  and 
secondary education, with private contributions (mostly at individual level - financial or in kind) 
for  early  childcare  or  for  higher  &  more  specialised  education  representing  the  largest  share. 
Generally,  actions  should  take  account  of  the  flagship  initiative  of  the  New  Skills  Agenda159 
There is broad societal agreement of their relevance, but few private actors willing to invest in 
this area without public intervention. The return from these investments will also support public 
authorities  to  deliver  better  services  in  a  complementary  manner  and  not  to  divest  from  social 
services. 

Subsidiarity and value added from EU-level action 

Investments in social infrastructure and social enterprises producing goods ('tangibles') as well as 
social  services,  ideas  and  people  ('intangibles')  are  crucially  lacking  in  the  EU,  yet  these  are 
critical for the EU and its Member States to develop into a fair, inclusive and knowledge-based 
society. An InvestEU Fund that is built on a guarantee covering losses under a specific Social, 
Skills & Human Capital window and provides debt and equity products can offer an opportunity 

157 The link between digitalisation and labour market is explored by the recent JRC report: What makes a fair society? Insights 
and evidence (2017). Available at: 
http://publications.jrc.ec.europa.eu/repository/bitstream/JRC106087/kj0716182enn.pdf  
158 private  benefits  (individual  –  more  employment  opportunities,  higher  wages,  faster  promotion,  healthier  lives  &  better  job 
satisfaction  -  as  well  as  institutional  benefits  -  better  service  delivery;  innovation  of  infrastructure  &  content;  governance 
autonomy) as well as public  benefits (higher fiscal revenues, better health status & lower social security costs, later retirement 
age, etc.). 
159 Blueprint  for  Sectoral  Cooperation  of  Skills,  which  is  a  very  good  example  of  public  support  measure  involving  private 
industrial stakeholders. 

110 

 
 
                                                 
for  the  public  and  private  sectors  to  come  together.  The  fund  will  finance  large  long-term 
investments  in  social  infrastructure  and  services  (health,  housing,  education,  innovation)  that 
cannot  be  covered  by  resources  from  government/regional/local  budgets,  as  well  as  smaller 
investments in smart, responsible, and environmentally sustainable cities.  

The  InvestEU  Fund  would  aim  at  creating  a  supportive  European  ecosystem  in  which  social 
enterprises  and  social  innovation  may  flourish  and  deliver.  It  can  also  help  Social,  Skills  & 
Human  Capital  economy  actors  such  as  social  start-ups  and  social  enterprises  as  well  as  skills 
investment markets to contribute to enhancing the social dimension of the Internal Market and 
trigger a signalling effect, aligning and complementing Member States' efforts in these different 
fields  and  allow  new  business  models  to  develop  and  tackle  societal  concerns.  The 
demonstration effect can be a powerful means of achieving a pan-European market in the areas 
covered  by  this  window.  Overall,  the  social  investment  and  skills  window  will  seek  to  ensure 
sufficient  supply  of  working  capital  to  social  enterprises,  social  innovators  and  other 
stakeholders including SMEs and micro-enterprises. 

According to the report of the “High-Level Task-Force on Investing in Social Infrastructure in 
Europe”  160 ,  public  investment  in  social  infrastructure,  including  for  education,  health  and 
housing,  has  been  and  remains  low  over  the  past  decade,  despite  EIB/EFSI  support.  The  EU-
level  intervention  should  in  particular  help  to  achieve  to  fill  this  market  gap  and  crowd  in 
financial  intermediaries  and/or  project  promoters  for  investments,  thus  multiplying  the  actual 
value  of  the  public  funding  by  leveraging  more  real  investment  in  social  infrastructure  and 
services. The EU value-added will be achieved through the creation of a more level playing field 
for social finance and investment markets in the EU, contributing to a more performing Capital 
Markets  Union  (vehicles  addressing  social  enterprises  investment  needs)  and  supporting  EU 
policy objectives in terms of job creation and inclusive growth. Therefore, these enterprises must 
make  the  best  use  of  the  internal  market  via  (capacity  building  support,  cross  boarder 
cooperation  and  finance  access  points).  Finally,  the  InvestEU  will  strive  to  develop  synergies 
with  the  Digital  Agenda  given  the  documented  successes  of  Digital  Social  Innovation.  Hence, 
the  Fund  will  help  tackling  market  failures  that  exist  at  the  European  level  and  that  can  be 
addressed at varying degrees at the national level. 

The InvestEU Fund would complement the social cohesion and integration action of European 
Structural  and  Investment  Funds  and  of  their  managing  authorities  willing  to  contribute  to  the 
InvestEU Fund on a voluntary basis. The window's EU-level compartment would help develop a 
pan-European market in a systemic way, capitalizing  on the pooled  expertise of intermediaries 
such as the EIB group. Depending solely on the cohesion compartment to achieve the EU goals 
of boosting access to finance for microfinance recipients and social enterprises, however, would 
be  counter-productive.  It  would  entail  a  risk  of  losing  the  impetus  and  benefits  gained  from 
centrally-managed  financial  products,  including  the  greater  geographical  agility  to  support 
intermediaries  in  locations  where  they  are  really  needed.  For  example,  certain  cities  with  high 

160 The  report  of  the  "High-Level  Task-Force  on  Investing  in  Social  Infrastructure  in  Europe"  (commissioned  by  ELTI  and 
chaired by former European Commission President Romano Prodi) estimated the minimal investment gap for Education, health 
& long-term care, and affordable housing at EUR 100-150 bn annually. 
See: http://ec.europa.eu/info/publications/economy-finance/boosting-investment-social-infrastructure-europe_en  

111 

 
 
                                                 
unemployment  in  non-Cohesion  Member  States  do  not  necessarily  benefit  from  sufficient 
Structural Funds support. In the medium term, this type of support will contribute to generate a 
true  EU  social  investment  market,  where  global  capital  would  flow  into  the  European  market 
irrespective of  the location  of  the  final  beneficiaries  and  of  the  maturity/capacity  of  their  local 
capital markets. 

A single fund for a heterogeneous sector with a common purpose 

The InvestEU support can be used in multiple sectors under the scope of this window. While all 
the  projects  will  have  to  be  ultimately  economically  viable  and  generate  a  revenues  for  the 
investors, the financial products in use, their investment guidelines, pricing and return conditions 
will  change  according  to  the  specific  policy  sector,  the  market  gap  to  be  addressed  and  the 
specific  project  structure.  In  the  area  of  education,  training  and  non-formal  learning  for  young 
and adults to improve educational attainment and skills, provide easier access to labour market 
and minimize the risk of poverty/social exclusion. For education and training providers, projects 
in  this  field  help  to  upgrade  their  infrastructure  and  develop  and  deploy  innovative  business 
models,  teaching  methods  and  engaging  technologies.  Supporting  investment  projects  in  this 
field  will  result  in  more  vibrant  education  and  training  systems  and  markets,  enabling  easier 
professional transitions for people and being responsive to  the lifelong need  for upskilling and 
reskilling.  It  may  complement  and  enhance  the  investment  opportunities  for  SMEs  161 and 
organisations  from  cultural  and  creative  sectors:  while  the  access  to  debt  finance  (guarantees) 
remains  the  main  objective,  there  is  a  potential  for  strengthening  EU  Investment  on  micro-
financing or other financial products orientated towards social enterprises involved in the Culture 
and Creative sectors. 

For  knowledge-intensive  institutions  (such  as  universities,  research  &  innovation  centres)  the 
combined support under several of the InvestEU windows may provide a welcome boost towards 
a knowledge-intensive society. Support can be extended also to the area of (social) innovation to 
develop community-based solutions to social problems. For several of the areas mentioned above 
the financial support by the window will be complemented by the offer of technical assistance 
and capacity building to “grow” the respective market players, including social innovators, social 
entrepreneurs, social impact investors, and philanthropists and create a pan-European network of 
social  impact  and  social  innovation  relay  and  coaching  centres.  See  the  section  below  on 
capacity building for more details. In order to maximize its impact, the InvestEU fund may also 
be complemented by other measures such as, e.g. exploring the possibility to create markets for 
social outcomes. The establishment of an EU Outcome Payments Fund to pay out on outcomes 
achieved by schemes such as Social Impact Bonds (SIB), while taking in account experience and 
evidence to leverage capital from markets into underserved areas by offering a tranche of junior 
capital  to  social  impact  investors  or  setting  up  mechanisms  to  ensure  sufficient  supply  of 
working capital to social enterprises including socially innovative SMEs. 

While the use of EU-level financial intervention is not totally new in some of the areas covered 
by  this  InvestEU  window,  a  dedicated  Social,  Skills  &  Human  Capital  window  supported  by 
targeted  project-related  technical  assistance  could  help  build  scale  and  integration  of  existing 

161 Also covered under the SME window of the InvestEU Fund 

112 

 
 
                                                 
markets while creating new markets in adjacent sectors. As an example, around EUR 1.2 bn of 
EFSI financing was channelled to health and life-science projects between mid-2015 and 2017, 
but this support has mostly covered hospital infrastructure and medical/life science technologies 
(such as medicines, imaging and diagnostic technologies and medical devices). However today's 
health  systems  are  embarking  on  reforms  to  adapt  to  the  challenges  they  face:  an  increasing 
demand for healthcare due to population ageing and the rising burden of chronic conditions, and 
an environment of constrained public resources for health.162 Up-front investments are required 
to  set-up  the  new  care  models,  followed  by  sustained  investments  over  a  period  of  time  to 
facilitate the complete implementation of the reforms163. Return on investment may only come in 
the medium-long term; and consequently, investments in reformed care models are of high risk.  

Moreover, InvestEU in the post-2020 MFF would also pursue efforts made under the financial 
instruments of the EaSI programme. It would bridge financing gaps through the provision of a 
complementary  toolbox  of  financial  products  (guarantees,  debt  and  equity)  tailored  for 
microfinance  and  social  enterprise  and  innovation  finance  and  support  new  systemic 
developments  in  an  emerging  social  investment  ecosystem  which  takes  time  to  develop.  This 
specific window would also support the development of all kind of business models which have 
the primacy of the individual and the social objective over capital (cooperatives, mutual societies 
or associations), while ensuring the viability of the underlying investments.  

An  EU-level  investment  fund  with  a  Social,  Skills  &  Human  Capital  window  would  further 
contribute to develop and share best practices in terms of financial structuring for these sectors 
where there is less experience or scale in using financial products. As an example, in the area of 
education and training a substantial track record of financial products being used is available164. 
Furthermore, a recent study has identified the potential for new avenues using (i) payment-by-
results  projects  in  which  the  service  provider  receives  payments  only  if  the  education  and 
training  service  achieves  pre-agreed  outputs/outcomes,  paid  by  a  commissioner  (usually, 
government), (ii) loan funds to students and adult learners to increase participation and skill level 
or  (iii)  public-private  partnerships  (PPP)  to  leverage  investment  into  the  supply  and 
refurbishment of education buildings or fixed assets.165 Another advantage stemming from EU-
level action is that it would stimulate the pan-European recognition of different business models, 
for instance supporting the financial community to boost financial products dedicated to them.166  

162 

These  health  reforms  require  significant  investments  on  various  fronts,  such  as:  (i)  new  primary  care  and  community  care 
centres;  (ii)  IT  systems  to  support  back-end  organisation,  implementation  of  integrated  care  pathways  and  decision  support 
systems;  (iii)  new service  models  and  new tools,  e.g. eHealth and  mHealth,  to facilitate  remote management  of chronically ill 
people at their homes; (iv) new organisational models, education of the health workforce in new roles and skills. 
163 See  also:  The  case  for  investing  in  Public  Health,  World  Health  Organization,  Regional  Office  for  Europe  (  2015) 
http://www.euro.who.int/__data/assets/pdf_file/0009/278073/Case-Investing-Public-Health.pdf 
164

the  EIB  had  a  2.5  billion  project  pipeline 

in  Education  and  Training 

 As  an  example, 

in  2017 

http://www.eib.org/projects/sectors/education-and-training/index.htm 

165 Study  on  the  feasibility  of  an  education  and  training  investment  platform  (2017)  ICF  study  contracted  by  DG  EAC  - 
Executive 
https://publications.europa.eu/en/publication-detail/-/publication/2b3f33c9-b21c-11e7-837e-
summary: 
01aa75ed71a1/language-en     
166 As an example (it could help create pan-European co-operative capital funds that are socially responsible investment fund 
that invests  in  cooperative  businesses  in  the  form  of  "patient  capital,”  or  equity-like  financing.  Such  funds  could  assist  the 
cooperative industry to grow and flourish by providing capital that acts like equity without requiring co-ops to give up control 
over their own management and destiny, as traditional venture capital might). 

113 

 
 
                                                 
Finally, a dedicated Social, Skills & Human Capital window may be relevant to cover new and 
emerging  policy  challenges  where  action  at  Member  State  level  is  difficult  to  achieve.  As  an 
example, significant support is also needed in the area of migration. Reception of asylum seekers 
and  integration  of  refugees  and  other  regular  migrants  require  considerable  investments  in  the 
short  and  long-term  perspectives.  A  wide  range  of  interventions  foreseen  in  the  scope  of 
InvestEU  can  be  envisaged  in  this  respect.  As  examples,  social  infrastructure  and  financing 
schemes to upskilling actions or qualifying training for migrants167 could be replicated, bundled 
and  upscale  in  the  framework  of  the  Fund,  in  synergies  with  investments  under  other  EU 
frameworks.  

Capacity building and monitoring 

For  a  successful  implementation  of  the  InvestEU  Fund  in  the  policy  areas  covered  by  this 
window,  a  strong  grant-based  capacity  building  programme  will  be  indispensable  given  the 
varying degrees of market maturity in the social sector. The capacity building programme will 
need to take into account the different needs of financial intermediaries and procuring authorities 
in accordance with their investment portfolio and the long-term needs of market development as 
well as the geographical coverage of financial intermediaries throughout the EU. Access to these 
measures  may  be  extended  beyond  a  specific  project  and  being  bundled  into  a  portfolio. 
Technical  assistance  supporting  the  preparation  of  Social,  Skills  &  Human  Capital  investment 
shall ensure full support for sustainability proofing of investment projects from the grant or pre-
investment  stage  onwards,  and  can  also  be  based  on  self-assessment  diagnostic  methods 
supported by advisory services helping beneficiaries in structuring their project and tailoring it to 
the target group in question. Also a solid monitoring framework, based on output, outcome and 
impact indicators will be needed to track the project and programme progress and to report to the 
investors  that  will  join  InvestEU  sponsored  projects  and  platforms.  The  framework  may  be 
based, among others, on the Pillar's social scoreboard168 for the social dimension of the window, 
and on the monitoring system of current programmes in cultural and creative sector169 or under 
the ESF170.  

B.  Policy drivers and public sector stakeholders to be involved and their role 

The important change in the economic and social landscape across the Union since the late 2000s 
has been the main driver for major policy redirection as regards labour market, social inclusion 
and  education  policies  at  both  the EU  and  Member  State  levels.  Policy  focus  has  shifted  from 
labour security aspects and flexibility to limiting social disparities and social exclusion. Looking 
ahead, a number of factors will most likely limit the capacity of Member States to increase their 
social expenditures, such as large fiscal consolidation plans under way in most Member States, 

167 For example, the UK or Sweden offers humanitarian migrants' loan programmes for vocational training and for work-based 
learning leading to a qualification. EU financial or organisational support for such schemes is not available today. 
168 https://composite-indicators.jrc.ec.europa.eu/social-scoreboard/# 
169 https://composite-indicators.jrc.ec.europa.eu/cultural-creative-cities-monitor/about 
170 Annex 1 “Common output and result indicators for ESF investments”:  
https://ec.europa.eu/digital-single-market/en/news/regulation-eu-no-13042013-european-parliament-and-council 

114 

 
 
                                                 
 
strong deleveraging needs in highly-indebted Member States and increasing population ageing-
related  expenditures.  It  is  more  important  than  ever  to  co-create  social  (integration,  individual 
skills  etc.)  and  societal  impact  (a  healthy  environment;  knowledge  creation  etc.)  within  one 
project. The EU can play an important role in ensuring a coordinating approach to support the 
requisite reforms at Member State level.  

A  distinctive  feature  of  the  social  window  is  the  support  to  investment  projects  that,  although 
socially  and  economically  viable,  do  not  generate  the  level  of  returns  that  an  investor  looking 
after profit maximization would accept. The window should act as a catalyst for investors willing 
to  finance  well-structured  projects  with  measurable,  positive  impacts,  considered  as  of  high 
added-value for their contribution to the Social Dimension of the EU. The logic of the window is 
to support nascent social economy market structures in addition to addressing market failures. 

The support provided under the Social, Skills & Human Capital window of the InvestEU Fund 
shall address the multi-focal needs of social policy stakeholders and multiple cross-sector issues 
covering  the  domain  of  health,  ageing,  education,  culture,  employment,  innovation  etc.,  while 
maintaining  a  certain  degree  of  flexibility  necessary  to  respond  to  new  investment  needs  that 
may emerge in time. 

The following areas have been identified as the focus of intervention for the Fund support: 

  Skills, integration and education: investment in all levels of education, including digital 
skills, necessary for building a knowledge-based society, support to increase vocational 
training  and  lifelong  learning,  including  non-formal  learning  investment  in  human 
capital  (inter  alia  focused  on  improving  the  integration  of  young  people  in  society,  of 
refugees  and  asylum  seekers  who  are  undertaking  upskilling  actions  or  qualifying 
training); 

  Supporting  social  economy  and  social  enterprises  and  microfinance  recipients:  support 
to  promote  inclusive  entrepreneurship,  improve  access  to  employment  (including  self-
employment), job creation, labour market integration, social inclusion by increasing the 
availability  of  and  access  to  micro-finance 171 ,  and  access  to  finance  for  social 
enterprises.  It  also  includes  support  for  the  upscale  or  development  of  new  business 
models focusing on social return on investment. 

  Social  infrastructure  and  services:  investments  in  the  construction,  expansion  or 

refurbishment of buildings and in the provision of related services for  

-  Education and training (i.e. educational facilities and digital equipment) 
-  Social housing  
-  Healthcare  (i.e.  clinics,  hospitals,  primary  care  centres,  health  promotion 

programmes, integrated care services, etc.) 

-  The  circular  economy  and  nature  protection  where  certain  activities  of  high 
public  interest  are  not  yet  commercially  viable  but  offer  opportunities  for  job 
market integration and education. 

171 With specific regard to vulnerable groups including refugees micro-enterprises and young adults. 

115 

 
 
                                                 
Support to physical infrastructure developments could be complemented with funding for social 
economy  and  social  service  provision,  including  through  outcomes-based  projects,  in  an 
integrated way. 

  Social  innovation,  creation  of  markets  for social  outcomes,  expertise  and  capacity 
building:  tools  may  be  developed  to  help  national/regional/local  authorities  develop 
skills for configuring investment strategies, blending financing and bundling projects; to 
grow social innovators, social entrepreneurs, social impact investors and philanthropists; 
to  facilitate  agreement  on  operational  definitions,  etc.  Capacity  building  also  include 
promoting  innovation  by  and  for  the  European  society,  in  particular,  targeting  new 
products,  services  and  organizational  models  that  meet  social  needs,  foster  new  social 
relationships or collaborations, and empower citizens. 

With  regard  to  the  public  sector  stakeholders,  the  involvement  of  national  and  regional  level 
authorities, municipalities, associations of public education and training providers will be needed 
to  establish  a  permanent  dialogue  between  different  levels  of  government  and  thus  bring  the 
priorities  of  the  Union  closer  to  the  citizens.  Regional  and  local  authorities  have  different 
competences  across  the  Member  States;  local  health  units  or  regional  educational  authorities 
often act as contracting bodies and work in close contact with financial intermediaries. 

C.  Financial intermediaries to be involved and their role 

The EIB Group 

The EIB Group (i.e. EIB and EIF) currently acts as the main implementing partner for the EU 
budgetary funds  in  the current  MFF. The EIB group  has  a remarkable experience in  the social 
sector;  it  has  financed  health  care,  healthy  ageing,  affordable  housing  and  higher  education 
infrastructure  projects,  while  the  EIF  has  been  involved  in  microfinance  and  social 
entrepreneurship  under  the  EaSI  programme  and  the  EFSI  SMEW.  The  EIB  institute  has  been 
active in the field of social innovation projects. The EIB group also provides access to financing 
through its financial intermediaries which are often the first port of call for smaller organisations.  

It  is  therefore  likely  that  the  EIB  Group  would  continue  to  be  one  of  the  main  Implementing 
Partners in the Social, Skills & Human Capital window, but the Commission should also keep its 
options open whereby  access  to  the EU  guarantee should also be envisaged for other  financial 
institutions. In addition, the social sector may see an offspring of ad-hoc investment platforms, 
where the EIB group joins forces with other NPBs, MDBs and local financial intermediaries. 

The National Promotional Banks (NPBs) 

NPBs may play a dual role under the InvestEU Fund insofar as the social sector is concerned. On 
the one hand, they can be a direct beneficiary of the budgetary guarantee (also jointly with the 
EIB for areas where  the  risk exposure is  higher  such  as  financing social  enterprises and social 
economy),  improving  the  conditions  of  their  financing  in  terms  of  cost  and  maturity. 
On  the  other  hand  the  NPB  could  also  play  a  bridging  role  with  Member  States  in  blending 
grants to support projects with high socio-economic benefits, the costs of which are higher than 
their potential financial revenues. Any such contribution would represent additional resources for 
the  Fund,  creating  specific  Member  State-focused  (or  even  region-specific)  guarantees  with  an 

116 

 
 
increased impact. This could be helpful for tackling country-specific social problems and exploit 
the  local  knowledge  and  presence  of  the  NPBs  to  the  largest  possible  extent.  Such 
complementarity  of  InvestEU  with  national  investments  could  also  help  increase  leverage  and 
justify EU added value. 

Other potential implementing partners  

The  Council  of  Europe  Development  Bank  (CEB)  and  the  European  Bank  for  Reconstruction 
and  Development  (EBRD)  could  also  be  included  as  one  of  the  InvestEU  Fund  implementing 
partners for the Social, Skills & Human Capital window. CEB’s investments already contribute 
to delivering affordable and sustainable essential services and social infrastructure. Furthermore, 
the Bank responds to emergency situations (such as refugee/migrant crises and natural/ecological 
disaster  events)  and  helps  improve  the  living  conditions  of  the  most  vulnerable.  The  EBRD  is 
already active in the field of microfinance through thematic bond issues.  

Last, but  not  least, dedicated investment platforms,  which may be financed  by the EIB Group, 
NPBs  and  other  investors,  including  foundations  and  donors,  could  be  also  an  option  for 
implementing  partners  of  the  Social,  Skills  &  Human  Capital  window.  These  implementing 
partners may potentially play double role in the window: as both the entrusted entities and the 
intermediaries. Their potential role as an implementing partner will however need to be reviewed 
in consideration of the decision on the implementation strategy defined for the overall InvestEU 
structure. 

Other intermediaries  

Other  intermediaries  which  will  be  playing  an  important  role  in  the  Social,  Skills  &  Human 
Capital window are: 

-  private banks including those operating in the social economy and  social enterprise 

sector (such as ethical or alternative banks, cooperative banks); 

-  non-banking financial institutions including loan funds, patient capital providers such 
as  a  cooperatives,  microfinance  institutions,  credit  unions,  guarantee  institutions, 
insurance companies, pension funds, Private Equity/Business Angel funds, funds-of-
funds and co-investment funds or schemes; 

-  social  investment  market  enablers  including  investment  readiness  and  capacity-
building  intermediaries  active  in  the  micro-finance  and  social  enterprise  finance 
sectors; 

-  FinTech companies172; 
-  Universities, research centres and Knowledge and Innovation Communities; 
-  foundations;  
-  equity crowdfunding platforms; and 
-  various  groups  of  investors  including  corporate  investors,  social  impact  investors, 
(social)  business  angels,  educational  entrepreneurs  (e.g.  MOOCs),  venture 
philanthropists and philanthropists. 

172 See the EC consultation on the potential role of FinTech companies. 
https://ec.europa.eu/info/sites/info/files/2017-fintech-consultation-document_en_0.pdf 

117 

 
 
                                                 
In order to ensure a successful implementation of the Window, every effort should be made to 
ensure  complete  EU  coverage  by  financial  intermediaries,  including  by  securing  cross-border 
cooperation in the absence of competent, local, national financial intermediaries. The degree of 
maturity of financial intermediaries varies across Europe, creating sometimes a bottleneck to the 
take-up of financial instruments at the local level. Capacity building programmes have addressed 
this problem, but the costs have proven significant.  

Private sector stakeholder organisations, associations or business groups to be involved and 
their role 

Pan-EU private stakeholder organisations which are active in the social sector have basically an 
interest in the support and use of financial products. A large number of specialised organisations 
are active in different sectors; for instance: 

  Education: representatives of education and training providers, Student Unions (e.g. ESU); 
Teachers  Unions  (e.g.  ETUCE);  non-profit  (e.g.  Education  International)  &  international 
organisations (e.g. UNICEF); 

  Health:  Stakeholder  collaboration  networks  and  NGOs  (e.g.  EIT  Health,  European 
Innovation  Partnership  on  Active  and  Healthy  Ageing,  AEIP  (European  Association  of 
Paritarian  Institutions),  GIRP  (European  Healthcare  Distribution  Association),  EPHA 
(European  Public  Health  Alliance),  EHMA  (European  Health  Management  Association), 
HOPE  (European  Hospital  and  Healthcare  Federation),  UEPH  (European  Union  of  Private 
Hospitals), EPF (European Patients' Forum), EUROCARERS, etc. 

  Affordable  and  social  housing:  Housing  Europe  (dealing  with  the  setup  of  inclusive 
communities,  fostering  urban  regeneration,  reviving  rural  communities)  as  well  as  private 
associations  or  cooperatives  at  national  level  and  other  stakeholders  whose  mission  is  to 
build inclusive communities such as NGOs or public administrations.  

  Cross sector: networks of social enterprises and/or joint social projects undertakings with a 
European  dimension,  active  in  cross-border  fund-raising,  innovation  and  implementing 
activities,  etc. Also  European level organisations with  a cross-sector  approach like EASPD 
(representing  service  providers  for  people  with  disabilities)  or  ENSI  (European  network  of 
social integration enterprises) are topical. Also given recent technological developments with 
impact on the social sector (e.g. e-learning, e-health and the need for more energy efficient 
buildings) also organisations from these fields can be relevant. 

Regarding  financing,  organisations  dealing  with  specific  financial  areas  are  relevant.  Among 
them are:  

-  for  the  loan  and  guarantees  segment,  AECM,  NEFI,  EAPB,  UEAPME,  FEBEA  and 

EMN/MFC (microfinance),  

-  for  equity  instruments,  organisations  like  InvestEurope  (private  equity  and  VC),  the 
European  Venture  Philanthropy  Association  (EVPA),  Business  Angels  Europe  (BAE) 
and European Business Angels Network (EBAN), FEBEA. 

118 

 
 
Also institutional investors (as insurance companies) including umbrella organisations like ILPA 
or  LTIIA  could  play  an  important  role  in  financing  of  social  projects.  It  is  also  considered  to 
reach out to non-European potential investors, e.g. those from Asia. 

Project  promoters  that  already  gained  experience  in  the  social  field  might  bring  forward  their 
expertise also regarding feasible financing solutions. 

Further,  foundations  and  philanthropic  organisations  could  play  a  catalytic  role  in  capacity 
building  and  market  development  in  the  social  sector  to  achieve  the  critical  mass  needed  to 
justify action at the EU level, further they could also act as investors in the social field. They are 
represented  by  organisations  like  DAFNE  (European  Network  of  Foundations’  and  Donors’ 
Associations) and the European Foundation Centre (EFC) or EVPA. 

In addition, crowdfunding might become more important to provide financing in the social field; 
topical  organisations  are  the  European  Crowdfunding  Network  (ECN)  and  European  Equity 
Crowdfunding Association.  

Summary  of  role  of  stakeholders:  Consultations  can  be  undertaken  in  the  context  of  idea 
development,  data  collection  and  financial  product  development  including  market  testing,  in 
terms of impact assessment, evaluations and setting up the legal base, for raising awareness and 
–  importantly  -as  investors  in  projects  and  funds.  They  could  also  help  in  establishing  of 
dedicated investment vehicles, capacity building and technical assistance. 

D.  Final beneficiaries and target groups  

As the Social, Skills & Human Capital window will encompass interventions in various sectors, 
a  wide  range  of  beneficiaries  will  be  targeted.  Firstly,  the  success  of  the  EaSI  instruments  has 
demonstrated a strong need to continue supporting its target group:  

-  Disadvantaged  and  vulnerable  persons  e.g.  unemployed,  youth,  elderly,  homeless, 

migrants; 

-  Micro-enterprises, in particular those employing disadvantaged and vulnerable persons; 
-  Social enterprises,  
-  Associations, foundations, mutual and cooperatives.  

In this way, continuity will be provided and the Commission will build on the achievements of 
Progress  Microfinance  and  EaSI.  In  order  to  implement  the  EU  policy  objectives  in  the  social 
field,  an  extension  to  the  scope  of  targeted  beneficiaries  beyond  the  EaSI  groups,  such  as 
innovators,  can  be  explored  for  the  InvestEU  legal  base.  For  example,  education  and 
development of skills should be targeted since investment in education and training over the life 
course is crucial to ensure Europeans have the skills they need to find and maintain their place in 
the job market and society as a whole and to deliver essential social services (as is the case of 
healthcare  workforce).  The  achievements  and  lessons  learnt  from  the  Erasmus+  Master  loan 
scheme  should  be  taken  on  board.  In  addition,  the  need  for  patient  capital  for  these  kinds  of 
investments should be recognised. 

Given  the  integrated  functioning  of  skills  development  and  labour  markets,  the  support  via 
financial  products  (potentially  complemented  by  grants  or  other  types  of  support)  could  be 

119 

 
 
provided for three main target groups: (i) companies; (ii) learners; (iii) the providers of education 
and  training,  with  a  role  also  for  regional  and  national  authorities  in  case  where  specific 
framework  conditions  would  be  required  to  effectively  deploy  education  support  or  in  cases 
where  public  authorities  stand  to  benefit  directly  from  a  workforce  with  the  right  skill-mix. 
Therefore, it is proposed that a sufficiently integrated/coordinated approach is taken in designing 
the measures.  

This could be achieved through improved access to up-to-date educational and training offer (i.e. 
labour-market oriented education and training programmes) for students, apprentices, young and 
adult learners; through the support for education and training providers to upgrade their training 
offer  and  facilities  as  well  as  through  the  support  for  companies  to  provide  training  and 
apprenticeships placements as well as improve skills utilisation.  

In  addition  to  the  areas  listed  above,  the  Social,  Skills  &  Human  Capital  window  will  also 
encompass  EU  support  in  the  different  branches  of  the  education  sector  where  the  potential 
targeted beneficiaries would be children, parents, teachers and school administrators as well as 
such as schools and childcare facilities.  

Investments in health will also be supported. The targeted beneficiaries will typically be: health 
authorities,  health  service  providers,  technology  providers,  healthcare  professionals,  patients, 
citizens.  In  the  field  of  social  infrastructure,  the  targeted  beneficiaries  could  be  project 
promoters, operators of buildings/facility managers, affordable housing providers, public-private 
partnerships.  

As  a  crosscutting  issue  an  advantage  from  EU-level  action  would  be  to  stimulate  the  pan-
European  recognition  of  different  business  models  by  providing  access  to  funding  and  proper 
capacity  building  with  respect  for  their  variety  and  characteristics.  Consequently,  InvestEU 
should be in a good position to connect existing social innovation and social economy networks 
and initiatives such as the social innovation platform and competition. This allows the InvestEU 
fund to create and channel its own access and enlarge its reach. 

120 

 
 
ANNEX 5: LIST OF FINANCIAL INSTRUMENTS AND EFSI UNDER THE CURRENT MFF  

Investment 
focus 

Infrastructure 
and Innovation 
& SME - 
demand driven 
support 

Programme 

Budgetary 
Guarantee/Financial 
instrument 

DG in 
charge 

Manager 

Overall budget 
envelope 
(EUR m) 

Total 
commitments (as 
of end 2016) (EUR 
m)* 

Target 
Investment to 
be mobilised 
in EUR m)* 

Infrastructure  and  Innovation 
Window 

EIB 

6.825 

EFSI 2.0 

SME Window 

ECFIN 

GROW 

GROW 

EIF 

EIF 

EIF 

2.275 

490,00 

970,00 

6.113,00 

172,90 

375,50 

375.000 

125.000 

2.450 

24.250 

COSME 

Competitiveness, 
innovation, and, 
support for 
SMEs 

Horizon 2020 

facility 

for  Growth 

Equity 
under COSME-EFG 
Loan  Guarantee  Facility  under 
COSME 
InnovFin  Equity  -  risk  finance 
for investing R&I 
InnovFin Equity - leadership in 
ICT 
InnovFin 
microfinance 
entrepreneurship 
InnovFin SME and Small Mid-
caps  R&I  Loans 
service 
(InnovFin SME guarantee) 
InnovFin  Loan  Services  for 
R&I Facility  

Equity 
and 

- 
social 

RTD 

EIF 

495,00 

256,10 

2.970 

RTD 

EIF 

1.060,00 

534,50 

9.540 

RTD 

EIB 

1.060,00 

796,00 

13.250 

SME Initiative 

Contributions 
Horizon2020 and COSME 

from 

NA 

EIF 

175,00 

23.3 

875 

121 

 
 
 
 
 
Investment 
focus 

Programme 

Budgetary 
Guarantee/Financial 
instrument 

DG in 
charge 

Manager 

Overall budget 
envelope 
(EUR m) 

Total 
commitments (as 
of end 2016) (EUR 
m)* 

Target 
Investment to 
be mobilised 
in EUR m)* 

Connecting 
Europe Facility 
(CEF) 

CEF Equity instrument 

CNECT 

CEF  Risk  Sharing  Debt 
Instrument 

MOVE, 
ENER, 
CNECT 

Direct 
Management 

500 

100,00 

750,00 

EIB 

400 

4.200 

Infrastructure, 
energy, and 
climate action 

Environment 
and Climate 
Action (LIFE) 

PF4EE 

NCFF 

Employment and 
social innovation 

Education and 
culture 

Employment and 
Social 
Innovation 
("EaSI") 
Erasmus+: 
education, 
training, youth 
and sport 

CLIMA 

EIB 

155,00 

ENV 

EIB 

EMPL 

EMPL 

EIF 

EIF 

60,00 

16,00 

96,00 

70,00 

50,00 

12,70 

68,80 

1.240 

180 

32 

528 

Building 

Capacity 

EaSI 
Investments  
EaSI  Microfinance  and  Social 
Enterprise Guarantees 

Student 
Facility 

Loan  Guarantee 

EAC 

EIF 

221,00 

115,70 

1.260 

Creative Europe 
Programme 

Cultural  and  creative  sectors 
Guarantee Facility CCSG 

CNECT, 
EAC 

EIF 

123,00 

Total 

14.521 

14,80 

9.080 

701 

562.226 

* Total commitments are based on Article 140.8 Report as of 31 December 2016. Investment mobilised for Financial Instruments is calculated based 
on the target multiplier indicated in Article 140.8 Report.

122 

 
 
 
 
 
 
ANNEX 6: TECHNICAL ASSISTANCE 

Existing TA initiatives: Commonalities and differences 

Most EU advisory services focused on investment are currently delivered through the EIB and 
cover a wide range of EU policy objectives. In some cases, the Commission builds synergies in 
order  to  optimise  the  use  of  existing  TA  services  for  different  policy  objectives.  For  example, 
ELENA  expanded  from  energy  efficiency  to  cover  also  innovative  urban  mobility.  Likewise, 
JASPERS was used not only to cover the preparation of projects under ESIF but also to support 
the  preparation  of  CEF  transport  projects.  Most  of  the  Technical  Assistance  is  targeting  final 
beneficiaries  in  all  Member  States,  in  particular  but  not  exclusively  supporting  public  project 
developers.  

Initiatives  for  Investment  support  available  at  EU  level  differs  in  terms  of  size,  coverage, 
provider of the assistance, delivery mode, application of the FAFA provisions and the pricing to 
final beneficiaries. The size of the initiatives ranges from very small initiatives (pilots) to well 
established ones. Some of the TA available has been put in place to underpin the deployment of 
innovative  financing  instruments  and  test  the  market's  response.  Some  other  TA  services  are 
already at a mature stage and clearly known by the beneficiaries. Some TA services provided are 
very specific (e.g. PF4EE, NCFF), based  on targeted  needs  while  others are providing  broader 
services (e.g. EIAH, JASPERS). In general, these specific TA actions are in place to reinforce a 
regional  or  sector  coverage.  A  better  coordination  between  those  two  types  of  TA  has  to  be 
developed. 

TA providers: 

  EIB  is  the  main  provider  of  centrally-managed  TA.  In  some  cases,  the  EIB  is  the  TA 
provider  (e.g.  JASPERS),  whereas  in  other  cases,  the  EIB  is  indirectly  managing  a  TA 
facility on behalf of the European Commission (e.g. ELENA). 

  Executive agencies have a specialised role in some sectors such as the SMEs or TA provided 

to support medium-size energy efficiency projects (e.g. H2020 EE11 PDA, EASME) 

  Other IFIs have developed specific initiatives/ sector knowledge (e.g. EBRD Small Business 

Support) 

  The  Commission  services  can  also  provide,  upon  request  from  the  Member  States,  legal 
assistance  on  the  public  procurement  aspects,  through  the  voluntary  ex  ante  assessment 
mechanism for large infrastructure projects.  

  There are currently no initiatives undertaken through NPBs/NPIs (in the past, KfW provided 

EU-supported TA; in the future, cooperation with NPBs is sought under the EIAH). 

TA delivery mechanism: 

  The  initiatives  currently  implemented  are  using  several  delivery  mechanisms:  executive 
agencies, the EIB and other implementing partners which are directly (own staff or external 
consultants  under  service  contracts)  providing  the  advisory  services  to  the  beneficiaries  or 
providing grant support for the beneficiary's technical assistance needs. Moreover, the EIB is 
also using indirect delivery mechanisms through other implementing partners. 

  The pricing  for beneficiaries is  also different from one initiative to  the other.  A significant 
part of the EU supported TA is free of charge for the final beneficiaries (especially if these 

123 

 
are public project promoters). Experience shows that beneficiaries who cover at least part of 
the  costs  of  the  services  obtained,  as  for  example  for  ELENA  technical  assistance,  often 
demonstrate  a  greater  sense  of  ownership,  leading  to  clearer  roles  and  responsibilities, 
increased involvement/ enhanced collaboration and better focus on tangible results. 

  The  request  for  TA  can  be  triggered  (at  individual  project  level)  on  a  different  basis:  for 
specific policy priorities (e.g. PF4EE, ELENA, H2020 PDA) or demand driven (e.g. EIAH, 
JASPERS). 

124 

 
 
Table: Technical Assistance Costs across the Different Existing and Upcoming Initiatives in the current MFF 

TA costs 

Delivery 
mode 

TA manager 

TA provider(s) 

Fee basis 

Cost sharing 
EU/EIB 

Cost coverage by 
beneficiary 

EU budget 
(EUR) 

Period of 
implementation 

JASPERS 

FPA/ SGAs  EIB 

EIB 

EIAH 

FPA/SGAs 

EIB 

ELENA 

DA 

EIB 

EIB/other 
financial 
institutions 
(EBRD/NPBs)/ 
External 
consultants 
External 
consultants 

FPA/SGA 

EIB 

EIB 

InnovFin 
Advisory 

EEEF 
European 
Commission 
Technical 
Assistance 
EEEF 
Technical 
Assistance 
Facility  

External 
consultants 

EEEF  Issue 
Document  

DA 

sub-

EIB 
delegation 
agreement  with 
EEEF 
Fund 
manager (DB) 
EEEF 
manager 

Fund 

EU 
coverage 

EIB 

80%  20% 

0 

233,650,000 

2014-2020 

75%  25% 

only private; of 
which SMEs up to 
33% 

110,000,000 

2015-2020 

100% 

100% 

0 

0 

10% of the TA 
provided 

279,000,000  

2014-2020 

0 

28,000,000 

2014-2020 

100% 

0 

10% of the allocated 
TA 

20,000,000 

2012-2017 

cost 
coverage 
(FAFA 
rates) 
cost 
coverage 
(FAFA 
rates) 

6%  of 
the 
TA provided 

cost 
coverage 
(FAFA 
rates) 
6.5%  of  the 
TA provided 

External 
consultants  hired 
by EEEF 

 20%  of  the 
TA 
disbursed 

- 

- 

0 

subject on 
availability of 
funds (EEEF 
income waterfall) 

2017+ 

125 

 
TA costs 

Delivery 
mode 

TA manager 

TA provider(s) 

Fee basis 

Cost sharing 
EU/EIB 

Cost coverage by 
beneficiary 

EU budget 
(EUR) 

Period of 
implementation 

CEF 

FPA/SGA 

EIB  

/  External 

EIB 
consultants 

CEF - MSs 

Grant 
agreement 

Rail 
manager/ 
Ministries 

infra 

External 
consultants 

H2020 
PDA) 

NCFF 

(EE11 

Agency 

EASME 

DA 

EIB 

External 
consultants 

External 
consultants 

PF4EE 

DA 

EIB 

EIB/ 
intermediaries 

Financial 

EU 
coverage 

EIB 

90%  10% 

100% 

0 

cost 
coverage 
(FAFA 
rates) 
real costs 

0 

0 

1,262,170 

2015-2017 

11,644,862 

2014-2020 

- 

- 

100% 

- 

0 

0  

H2020 grants  

2011-2020 

0 (Beneficiary may 
be asked for a 
financial 
contribution on case 
by case basis) 
0  

10,000,000 

2015-2019 + 
(extension under 
consideration) 

3,200,000 

2014-2019 

100%  

0  

the 

5%  of 
EU 
contribution 
committed 

the 

6%  of 
EU 
contribution 
committed 

Service 
contract 

GROW 

External 
consultants 

100% 

n/a 

1,500,000 

2018-2020 

Grants 

ENER/EASME  Executive Agency 

Islands Facility  Grants 

ENER 

External 

126 

n/a 

n/a 

11,000,000 

10,000,000 

2018-2020 

2018-2020 

Smart 
Specialisation 
Platform 
industrial 
modernisation 
City Facility  

for 

 
 
 
 
 
 
 
 
 
 
TA costs 

Delivery 
mode 

TA manager 

TA provider(s) 

Fee basis 

Cost sharing 
EU/EIB 

Cost coverage by 
beneficiary 

EU budget 
(EUR) 

Period of 
implementation 

consultants 

EU 
coverage 

EIB 

Commission 
services 

GROW 

Commission staff 

- 

n/a 

0 

- 

2017- onward 

Service 
contract 

EMPL 

External 
consultants 

13,000,000 

731,257,032     

Internal Market 
-  Voluntary  ex 
ante 
mechanism 
EaSI 

TOTAL 

127 

 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
 
 
ANNEX 7: LIST OF POTENTIAL INDICATORS FOR THE INVESTEU FUND 

1. Volume of InvestEU financing (broken down by policy window) 

1.1 Volume of operations signed 

1.2 Investment mobilised 

1.3 Amount of private finance mobilised 

1.4 Leverage and multiplier effect achieved 

2. Geographical coverage of InvestEU financing (broken down by policy window) 

2.1 Number of countries covered by projects 

3. Impact of InvestEU financing 

3.1 Number of jobs created or supported 

3.2 Investment supporting climate objectives 

3.3 Investment supporting digitalisation 

4. Sustainable Infrastructure  

4.1 Energy: Additional renewable energy generation capacity installed (MW) 

4.2 Energy: Number of households with improved energy consumption classification 

4.3  Digital:  Additional  households  with  broadband  access  of  at  least  100  Mbps 
upgradable to Gigabit speed  

4.4 Transport: Investment mobilised in TEN-T of which: TEN-T core 

4.5  Environment:  Additional  population  served  by  improved  water  supply  and/or 
improved wastewater treatment 

5. Research, Innovation and Digitisation  

5.1  Contribution  to  the  objective  of  3%  of  the  Union's  GDP  invested  in  research, 
development and innovation.  

5.2 Number of enterprises supported carrying out research and innovation projects 

6. Reinforcement  of  SME  (broken  down  by  micro,  small,  medium  sized  and  small 
mid-caps and stage) 

6.1 Number of enterprises supported 

6.2  Number  of  enterprises  supported  by  stage  of  supported  enterprises  (early, 
growth/expansion) 

7. Social Investment and Skills  

7.1 Social infrastructure: Capacity of supported social infrastructure by sector: housing, 
education, health, other 

7.2  Microfinance  and  social  enterprise  finance: Number  of  social  economy  enterprises 
supported 

7.5  Skills:  Number  of  individuals  acquiring  new  skills:  formal  education  and  training 
qualification 

128 

 
 
 
 
 
ANNEX 8: EXAMPLES OF INDICATORS FOR THE SME WINDOW  

Initial two years of the 
programme 

Medium-term 

Long-term 

1.  Signature  of  agreement  with 

implementing partner 

the  agreement  for 

(As  the  SME  guarantee  facility 
will  be  implemented  through  the 
SME  Window  of  the  Single 
Fund, 
the 
single fund will have been singed 
and  the  respective  product  annex 
covering 
the  SME  guarantee 
facility will have been included) 

Target: within first year of 
the programme 

How is this monitored: 
Annual operational report 
from implementing partner 

N/A 

N/A 

2.  Launch 

calls 
expression of interest173  

of 

for 

How is this monitored:  

  Annual operational report 
from implementing partner 

3.  Signature 

agreements 
of 
with financial intermediaries  

How is this monitored:  

  Annual operational report 
from implementing partner 
reports on transactions 
signed 

  DG GROW to track 

financing gap for SMEs per 
Member States on a regular 
basis (at least once per year) 
through continuously 
integrating latest available 
data174 

4.  Additionality  of  transactions 
/ no crowding-out of existing 
national/regional 
support 
schemes 

How is this monitored:  

  Annual operational report 

Target: within first year of 
the programme 

N/A 

N/A 

Target: 
first  agreement 
signed  within  first  year  of 
the programme 

Target: within the first 
three years guarantee 
agreements signed in 
at least half of the 
countries identified to 
have a significant 
financing gap which is 
not covered through 
national/regional 
interventions 
(measured in % of 
GDP) 

Target: by the end of 
the programme 
period guarantee 
agreements signed in 
all of the countries 
identified to have a 
significant financing 
gap which is not 
covered through 
national/regional 
interventions 
(measured in % of 
GDP) 

Target:  no 
complaints 
about  clearly  identifiable 
crowding-out  effects  from 
national/regional  support 
schemes  

Target:  no  complaints 
clearly 
about 
identifiable  crowding-
out 
from 
effects 
national/regional 

no 
Target: 
about 
complaints 
clearly 
identifiable 
crowding-out  effects 
from 

173 In accordance with Article 208 (4) of Financial Regulation 2018  
174 In accordance with Article 209 (2) (h) of Financial Regulation 2018 

129 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Initial two years of the 
programme 

Medium-term 

Long-term 

support schemes 

national/regional 
support schemes 

from implementing partner 
(implementing partner to 
report how existing support 
schemes have been taken 
into consideration when 
deciding on the scope of the 
guarantee agreements 
signed) 

COM 

to  monitor 

official 
complaints received by any of 
the Commission services175 

Target:  No  guarantee 
agreements 
identified 
which  would  allow 
financial 
intermediaries 
finance 
within 
business practices 

to 
activities 
normal 

its 

No 

which 
allow 

Target: 
guarantee 
agreements 
identified 
would 
financial 
intermediaries 
finance 
within 
business practices 

to 
activities 
its  normal 

Target: 
Identified 
deadweight  not  more 
than 35% 

Target: Identified 
deadweight not more 
than 35% 

5.  Additionality  of  transactions 
/  no  support  of  activities 
which 
financial 
intermediaries  would  have 
undertaken  also 
the 
absence  of  the  guarantee 
support  according 
its 
business practices176 

to 

in 

guarantee 
Target:  No 
identified 
agreements 
which 
allow 
would 
financial  intermediaries  to 
finance activities within its 
normal business practices 

How is this monitored:  

  COM to establish 

mechanism which allows 
monitoring of portfolio 
criteria established in the 
agreements with the 
implementing partner, 
compliance to be verified 
before signature takes place  
  Regular monitoring visits to 
financial intermediaries 
(COM may accompany 
implementing partner) 

6.  Additionality  of  transaction 
at  the 
level  of  the  final 
recipients  (would  the  final 
recipient  have  received  the 
same 
for 
financing 
amount  and  under  the  same 
conditions  in  the  absence  of 
the guarantee?)  

the 

175 In accordance with Article 209 (2) (b) of Financial Regulation 2018  
176 In accordance with Article 209 (2) (b) of Financial Regulation 2018  

130 

 
 
 
 
 
 
 
 
 
 
                                                 
Initial two years of the 
programme 

Medium-term 

Long-term 

How is this monitored:  

  On a survey/sample basis as 
part of the mid-term and ex-
post evaluation 

for  a 

number 

that  an  ex-post 
Please  note 
monitoring  or  a  detailed  ex-ante 
assessment  for  each  individual 
very 
transaction  or 
significant 
of 
transactions  is  unrealistic  and 
significant 
would 
for 
administrative 
financial 
final 
recipients  and  the  Commission 
services involved.  

burden 
intermediaries, 

create 

7. Number of SMEs supported 

How is this monitored:  

  Through regular operational 

reports from the 
implementing partner 

8.  Financing  made  available  to 

SMEs supported 

How is this monitored:  

  Through regular operational 

reports from the 
implementing partner 

(Assumptions made:  

target range 1:10 – 1:20 

Average 
size 
transaction: EUR 100,000) 

of 

financing 

Target: 
in 
to  be 
function  of  the  available 
budget 

set 

Target:  to  be  set  in 
the 
function 
available budget 

of 

Target:  to  be  set  in 
the 
function 
available budget 

of 

Target: to be set in 
function of the available 
budget  

Target: to be set in 
function of the 
available budget 

Target: to be set in 
function of the 
available budget  

(Formula to be used: 
Available budget * target 
range * average size of 
financing transactions) 

(Formula to be used: 
Available budget * 
target range * average 
size of financing 
transactions)  

(Formula to be used: 
Available budget * 
target range * average 
size of financing 
transactions) 

9.  Jobs 

maintained/employment 
created in supported SMEs 

How is this monitored:  

  Annual employment/growth 

reports from the 
implementing partner. 
Report to be submitted for 

N/A 

131 

Target: Employment 
growth in supported 
SMEs to exceed 
employment growth of 
the overall SME 
population 

Target: Employment 
growth in supported 
SMEs to exceed 
employment growth 
of the overall SME 
population 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Initial two years of the 
programme 

Medium-term 

Long-term 

the first time in the fourth 
year of the programme with 
data as per end of the third 
year of the programme. 
  COM to monitor the general 
employment growth in the 
overall SME population 
(currently Commission 
established the annual report 
on European SMEs) 
  As part of the ex-post 

evaluation: econometric 
study to determine how 
employment has grown in 
supported SMEs compared 
to non-supported SMEs.  

10. Turnover 

growth 

in 

N/A 

supported SMEs 

How is this monitored:  

  Annual employment/growth 

reports from the 
implementing partner. 
Report to be submitted for 
the first time in the fourth 
year of the programme with 
data as per end of the third 
year of the programme. 
  COM to compare turnover 
growth in supported SMEs 
to general GDP growth 

  As part of the ex-post 

evaluation: econometric 
study to determine how 
turnover has grown in 
supported SMEs compared 
to non-supported SMEs.  

132 

Target: Turnover 
growth in supported 
SMEs to exceed overall 
GDP growth  

Target: Turnover 
growth in supported 
SMEs to exceed 
overall GDP growth  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 9: EXAMPLES OF INDICATORS FOR SOCIAL INVESTMENT AND SKILLS WINDOW 

The table below illustrates an example of monitoring indicators developed for the Student Loan 
Guarantee, one of the products currently in place in the field of education. Specific indicators 
will be developed at the product level under the Social Investment and Skills Window.  

What 

How 
collected 

Where 
does it 
stem 
from 

When 

Detail 

Target 

Number 
students 
supported 

of 

Legal 
base 
indicator 
(headline) 

Financial 
Intermediary  

Quarterly  Annex  II  (3)  (a)  the  number 
of students in receipt of loans 
, 
backed  by 
including  data  on 
their 
completion rates 

the  Facility 

200,000 

-  number  of  students  with 
loan 

number 

- 
finishing their programme 

of 

students 

Volume 
lending 

of 

Legal 
base 
indicator 
(headline) 

Financial 
Intermediary 

Quarterly  Annex  II  (3)  (b)  the  volume 
lending  contracted  by 

of 
financial intermediaries  

EUR 
3.2 bn 

Leverage 

EIF calculate 

 Average size of 
loan  

EIF calculate 

Geographic 
coverage  

Legal 
base  

EIF 

calculated  from  the  volume 
of  lending  committed  and 
EU contribution 

x6.17 

calculated  from  the  volume 
and number of students  

Number 
financial 
of 
intermediaries,  from  which 
countries  

35 

Article 20 legal base 

students 

financial 
each 

EIF shall endeavour to select 
intermediary 
a 
Programme 
from 
country,  in  order  to  ensure 
that 
all 
Programme  countries  have 
access  to  the  Student  Loan 
in  a 
Guarantee  Facility 
consistent 
non-
discriminatory manner 

from 

and 

+  

Annex  II  (1)  (c)  +  Annex  II 

133 

 
 
 
 
 
 
 
 
 
 
 
What 

How 
collected 

Where 
does it 
stem 
from 

When 

Detail 

Target 

(3) (h) 

to 

finance  by  all 
Access 
residents 
of  Programme 
countries  as  referred  to  in 
Article 24(1) 

Amount 
of 
guarantee  drawn 
down 

Level of interest 
rates 

Financial 
indicator  

Legal 
base 
indicator 

EIF calculate 

Financial 
Intermediary 

Quarterly  

Annex  II  (3)  (c)  the  level  of 
interest rates 

Ave  interest  rate  for  their 
portfolio 
financial 
by 
intermediary 

The  call  for  expression  of 
a 
include 
to 
interests 
requirement  for  banks 
to 
demonstrate how they intend 
to  pass  on  the  benefit  of  the 
EU  guarantee  in  terms  of  a 
reduction on the interest rate. 
Banks  should  monitor  and 
report on how they are doing 
this  –  the  actual  level  of 
interest that they are offering 
and 
it 
represents on the interest rate 
they would otherwise charge 

reduction 

the  % 

Outstanding  debt 
and default 

Legal 
base 

Financial 
Intermediary 

Quarterly 

Annex II (3) (d) Outstanding 
levels, 
debt  and  default 
any  measures 
including 
taken 
financial 
by 
intermediaries  against  those 
who default on their loans 

Fraud  prevention 
measures 

Legal 
base 

Financial 
Intermediary  

Business 
Plan  

(+  quarterly 
update 
if 
appropriate) 

134 

(3) 

(e) 
II 
Annex 
prevention  measures 
by financial intermediaries 

fraud 
taken 

 
 
 
 
 
 
 
 
 
 
 
 
What 

Student sex 

Student age 

Student origin 1 

Student origin 2 

Student 
destination 

Study field 

Where 
does it 
stem 
from 

Legal 
base 
Annex 
(3) (f) 

Legal 
base 
Annex 
(3) (f) 

II 

II 

Legal 
base 
Annex 
(3) (f) + 

II 

Eligibility 
criterion 

Legal 
base 
Annex 
(3) (f) + 

II 

Eligibility 
criterion 

Legal 
base 
Annex 
(3) (f) + 

II 

Eligibility 
criterion 

Legal 
base 
Annex 
(3) (f) 

II 

How 
collected 

When 

Detail 

Target 

Financial 
Intermediary  

Quarterly 

Financial 
Intermediary 

Quarterly 

Financial 
Intermediary 

Quarterly 

Financial 
Intermediary 

Quarterly 

Financial 
Intermediary 

Quarterly 

Financial 
Intermediary 

Quarterly 

135 

Information  to  be  collected 
loan  application 
once  at 
stage by student 

Question: male/female 

Information  to  be  collected 
once  at 
loan  application 
stage by student 

Question: date of birth 

Information  to  be  collected 
once  at 
loan  application 
stage by student 

Question: What is your home 
country or country of normal 
residence? 

Information  to  be  collected 
loan  application 
once  at 
stage by student 

Question:  In  which  country 
did you obtain your Bachelor 
degree  (or 
the  equivalent 
qualification) which qualifies 
you  to  apply  to  the  masters 
programme  that  you  want  to 
follow? 

Information  to  be  collected 
loan  application 
once  at 
stage by student 

Question:  In  which  country 
is the Master programme (or 
equivalent)  which  you  wish 
to follow 

Information  to  be  collected 
loan  application 
once  at 
stage by student 

Which of the following study 
corresponds  most 
fields 
closely 
chosen 
to  your 
programme: 

1.  Education  

 
 
 
 
 
 
 
 
 
What 

How 
collected 

Where 
does it 
stem 
from 

When 

Detail 

Target 

2.  Arts and Humanities 
3.  Social Sciences, 
Journalism and 
information  

4.  Business, Administration 

and Law 

5.  Natural sciences, 
Mathematics and 
statistics 

6.  Information and 
Communication 
Technologies  
7.  Engineering, 

Manufacturing, 
Construction 

8.  Agriculture, Forestry, 

Fisheries and Veterinary 

9.  Health and Welfare 
10.  Other  
To  have  no  influence  on  the 
loan decision 

Information  to  be  collected 
loan  application 
once  at 
stage by student 

Address, 
number, email 

contact 

phone 

Needed by banks  

Student  contact 
details 

Financial 
Intermediary 

Quarterly 

Statement:  By  signing  this 
application  you  confirm  that 
you  are  content  with  your 
contact  details  being  passed 
on 
independent 
research  body  contracted  by 
the  European  do  conduct  an 
loan 
of 
evaluation 
facility. 

the 

an 

to 

Socio-economic 
background 

Legal 
base 
Annex 
(3) (f) 

II 

Financial 
Intermediary 

Quarterly 

Question:  Does  either  of 
your  parents  have  a  higher 
education 
qualification 
(yes/no/don’t  know  or  prefer 
not to say) 

136 

 
 
 
 
 
 
What 

How 
collected 

Where 
does it 
stem 
from 

When 

Detail 

Target 

Geographical 
balance 
uptake 

of 

Legal 
base 
Annex 
(3) (g) 

II 

EIF 

Calculated 

Legal Base Annex II (3) (f) – 
this  is  to  be  drawn  from  the 
student 
and 
destination data 

origin 

137 

 
 
 
 
 
 
ANNEX 10: DEFINING AND ASSESSING ADDITIONALITY 

Additionality is a key principle underpinning EU support whether provided as grants or in the 
form  of  financial  instruments.  The  general  principle  of additionality as  set  out  in  the  EU 
Financial  Regulation177,  stipulates  that  EU  financial  instruments  should  not  crowd-out  or 
substitute existing sources of funding (whether EU, national or private). In other words, if a 
project  or  investment  can  be  financed  with  own  means,  private  sources  of  finance  or  by 
means of another public intervention (whether EU or national) at affordable conditions, the 
support  from  EU  financial  instrument  is  not  additional,  but  a  substitution.  Additionality 
therefore  represents  the  extent  to  which  a  project  or  investment  can  be  carried  out  in 
reasonable terms as a result of support from the EU financial instrument in consideration. A 
similar concept is expected to be laid out in the amended Financial Regulation.  

Empirical evidence on additionality of existing EU central financial instruments and EFSI is 
mostly  based  on  small  sample  sizes  of  beneficiaries  and/or  opinions  of  stakeholders. 
Gathering data evidence for the purpose of assessing the additionality of EU support ex-ante 
has proven difficult. Therefore when designing new financial interventions, it is critical that 
attention is paid to the ex-ante assessment of potential substitution or cannibalising effect of 
the  new  instrument  on  existing  financing  initiatives.  Furthermore,  evidence  and  analysis  of 
additionality  should  be  systematically  collected  and  reviewed  ex-post,  for  the  operations 
under support. 

Although additionality cannot be ‘proven’ or ‘exactly measured’, it is possible to enhance its 
assessments in practical ways, with the aim to enable the relevant EU programme to improve 
its effectiveness. 

Suggested additionality criteria for the InvestEU Fund 

General  principles  of  additionality  have  been  adopted  by  all  key  multilateral  and  bilateral 
agencies  working  in  the  area  of  private  sector  development.  In  line  with  their  collective 
agreements  on  common  concepts  guiding  their  work  with  the  private  sector,  and  building 
upon the lessons learned from past experience in implementing EU financial instruments and 
EFSI,  one  can  distinguish  between  financial  and  non-financial  additionality.  The  particular 
terms and structuring of a financing operation (including not only pricing but also other key 
aspects  such  as  tenor,  grace  period,  repayment  schedule),  together  with  the  risk  mitigation 
and  mobilisation  of  private  resources  constitute  the  financial  aspects  of  additionality.  Non-
financial  additionality  is  represented  by  all  other  features  that  the  InvestEU  Fund  support 
brings into the project, including economic additionality (i.e. whether the envisaged support 
addresses market failures or sub-optimal investment situations), specialist advice or expertise, 
etc.  

Given the above, the following non-exhaustive list of criteria can be drawn up potentially for 
the  assessment  of  the  additionality  of  the  InvestEU  Fund  support  both  at  portfolio,  and  at 

177 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 

138 

 
 
                                                 
project  level.  These  criteria  and  the  underlying  indicators  could  then  be  considered  as 
positive  factors  when  assessing  additionality.  In  all  circumstances,  however, 
the 
implementing partner should demonstrate that the proposed operation tackles a market failure 
or suboptimal investment situation.  

The main criteria could be the following: 

 

Identified  market  failures  (for  example  information  asymmetry  or  difficult  access  to 
market  or  resources)  which  constrain  the  availability  of  finance  or  the  terms  on  which 
finance is available for projects; 

  The  project  or  investment  is  expected  to  deliver  a  significant  societal  return,  but  the 

financial return is not in line with the expectations of the market; 

  Underdeveloped capital markets restricting the volume and/ or type of finance available; 

  High levels of perceived or actual risk in certain sectors or countries, beyond levels that 

private financial actors are able or willing to accept; 

  Support from the InvestEU Fund is provided through a subordinated position within the 
funding structure or for long tenors, which allows for a high risk absorption capacity; 

  Regulatory constraints; 

  Public/private support will be made available as a result of the financing support provided 

under the InvestEU Fund 

  EU  intervention  can  significantly  enhance  the  environmental  benefit  or  will  have  a 

positive impact on social integration  

  Cross-border projects or related services. 

These criteria are further elaborated in the table below. Moreover, the table below also sets 
out  a  series  of  proxy  indicators  which  could  be  used  to  assess  additionality  of  the  activity 
undertaken  by  the  implementing  entity  receiving  EU  support.  At  a  very  basic  level,  EU 
support  should  enable  the  implementing  entity  to  take  higher  risks  to  address  the  above 
conditions  (for  example,  by  creating  new,  riskier  products  or  adjusting  pricing  levels  of 
existing products) and/ or create higher volumes of activity. 

139 

 
 
Table1 : Indicative additionality criteria for support to be provided under the InvestEU Fund 

Type of 
additionality 

Additionality 
criteria  

Explanation 

Financial 

Market failures – 
information failures 

Although  the  project  /  business  is  viable,  it  encounters 
difficulties  to  obtain  financing  from  the  market  for  the 
to 
requested  volume  on 
information  asymmetries  e.g.  in  the  case  of  SMEs, 
specific 
time 
borrower, first time VC team)  

transaction  characteristics  (e.g.  first 

terms  due 

reasonable 

Market failures - 
gap between private 
and social returns 
(public goods, 
externalities) 

Market 
imperfections – 
under-developed 
markets 

The  project  or  investment  is  expected  to  deliver  a 
significant societal return, but the financial return is not 
in line with the expectations of the market 

The benefits expected from the positive externalities of 
the  projects  (such  as  emissions  reductions,  enhancing 
biological  diversity,  research  and  development  and 
deployment  of  innovative  technologies,  or  affordable 
provision  of  basic  infrastructure  services)  may  not  be 
fully  monetized  by  investors  immediately.  This  could 
make  the  private  financial  internal  rate  of  return  lower 
than the true economic rate of return for society. 

Financial  players  or  products  or  certain  features  of 
products  (e.g.  long  tenors,  loan  amount)  not  being 
available in certain countries 

140 

Suggested indicators for verifying additionality of 
InvestEU Fund support 

  Development of riskier financing products to cover 

under-served market segments 

  Share of operations representing first time 

counterparts 

  Share of investment going to first time VC teams 

  Increase in volume of financing provided to sectors 

with high positive externalities e.g. 

-  Microfinance 
-  Climate change 
-  Environment  
-  Research and innovation 

Applies to implementing partner only 

 

Increase in volume of financing to countries 
with under-developed capital markets 

  Development of specific products (possibly with 

 
 
 
Table1 : Indicative additionality criteria for support to be provided under the InvestEU Fund 

Type of 
additionality 

Additionality 
criteria  

Explanation 

Suggested indicators for verifying additionality of 
InvestEU Fund support 

higher levels of subordination) for under-
developed financial markets 

High sector or 
country risk  

/  activity  would  not  be  otherwise 
The  project 
undertaken  because  of  their  relative  novelty,  high 
perceived risk, or high initial cost of an undemonstrated 
market  behaviour,  currently  adverse  or  as  of  yet  still 
untested regulatory framework, or untested technology  

 

 

Increase in volume of financing to specific high 
risk sectors 

Increase in volume of financing to high risk 
countries 

Although the project is considered viable, the political 
risks in the country deter private investors. 

  Development of specific products / product 

features for high risk sectors 

  Development of specific products / product 

features for high risk countries 

Capacity to attract 
further financing 

The financing provided with support from the InvestEU 
Fund  allows  to  attract  resources  from  long  term 
investors through its subordinated features 

  Deployment of subordinated products  

Regulatory 
constraints 

Regulatory  constraints  limiting  FIs’  capacity  to  lend to 
certain  sectors  /  segments  (e.g.  exposure  limits  or 
capital requirements imposed by banking regulations) or 
undertake certain types of investment (e.g. cross-border 
investment) 

Applies to implementing partner only 

 

 

Increase in volume of financing to sectors / 
segments affected by regulatory constraints  

Increase in certain types of activity e.g. SME 
securitisation, cross-border VC activity 

141 

 
 
 
Table1 : Indicative additionality criteria for support to be provided under the InvestEU Fund 

Type of 
additionality 

Additionality 
criteria  

Explanation 

Non-
financial 

Social or 
environmental 
impact additionality  

for 

EU financing helps enhance the social or environmental 
impact  of  the  project  beyond  what  was  originally 
higher 
envisaged, 
environmental or energy efficiency considerations in the 
design  and  implementation  of  supported  projects  or 
supporting  the  adoption  of  latest  and  more  expensive 
technology  

fostering 

example 

by 

Suggested indicators for verifying additionality of 
InvestEU Fund support 

Incremental societal or environmental impacts expected 
in return 

Cross border 
dimension 

The  project  /  investment  is  of  a  strategic  cross-border 
nature e.g. energy or transport infrastructure connecting 
several Member States  

Increase in financing of cross border projects 

142 

 
 
 
 
 
Table 2: Relevance of additionality criteria per policy window 

Policy window 

Type of additionality  Additionality criteria 

SME 

Research & 
Innovation 

Social, skills & 
human capital 

Sustainable 
infrastructure 

Financial 

Market failures – information 
failures 

Market imperfections – 
missing or under-developed 
markets 

Market failures - gap between 
private and social returns  

Capacity to attract/mobilise 
further financing 

Sector or country risk too high 

Regulatory constraints 

√ 

√ 

√ 

√ 

√ 

Non-financial 

Social or environmental impact  

Cross border dimension 

(partly, e.g. 
Microfinance) 

√ 

√ 

√ 

√ 

(partly e.g. Social 
Housing) 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

143 

 
 
 
 
 
 
 
 
 
 
 
ANNEX 11: ACCESS OF NON-EU MEMBER STATES TO EU FINANCIAL INSTRUMENTS 

Category 

Country 

COSME 

Creative 
Europe  EaSI 

Erasmus 
+ 

Horizon
2020 

LIFE 

Candidates, potential 
candidates and 
acceding countries 
to the Union 

Albania 

EU Neighbourhood  Algeria 

EU Neighbourhood  Armenia 

EU Neighbourhood  Azerbaijan 

EU Neighbourhood  Belarus 

Candidates, potential 
candidates and 
acceding countries 
to the Union 

Bosnia and 
Herzegovina 

EU Neighbourhood  Egypt 

EU Neighbourhood  Georgia 

EFTA which are part 
of EEA, European 
Environmental 
Agency 

Iceland 

EU Neighbourhood 

Israel 

EU Neighbourhood 

Jordan 

Candidates, potential 
candidates and 
acceding countries 
to the Union 

Kosovo 

EU Neighbourhood  Lebanon 

EU Neighbourhood  Libya 

EFTA which are part 
of EEA, European 
Environmental 
Agency 

Liechtenstein 

EU Neighbourhood  Moldova 

Candidates, potential 
candidates and 
acceding countries 
to the Union 

Montenegro 

EU Neighbourhood  Morocco 

EFTA which are part 
of EEA, European  Norway 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

144 

 
 
 
 
 
 
 
 
 
 
 
 
Category 

Country 

COSME 

Creative 
Europe  EaSI 

Erasmus 
+ 

Horizon
2020 

LIFE 

Environmental 
Agency 

EU Neighbourhood  Palestine 

x 

Candidates, potential 
candidates and 
acceding countries 
to the Union 

Serbia 

Swiss 
Confederation, 
EFTA 

Switzerland 

EU Neighbourhood  Syria 

Candidates, potential 
candidates and 
acceding countries 
to the Union 

FYR 
Macedonia 

EU Neighbourhood  Tunisia 

Candidates, potential 
candidates and 
acceding countries 
to the Union, 
European 
Environmental 
Agency 

Turkey 

EU Neighbourhood  Ukraine 

x 

x 

x 

x 

x 

x 

26 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

23 

9 

23 

x 

x 

27 

x 

x 

27 

145 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 12: ASSESSMENT OF DUPLICATION, SYNERGIES AND OVERLAPS 

Avoiding overlaps among programmes and exploring synergies requires careful attention 
and coordination among a number of Commission DGs under the current MFF.  

For  example,  in  the  area  of  SME  financing,  the  current  MFF  has  at  least  14  different 
instruments focusing on SMEs under internal, centrally managed EU financial instruments 
and  the  EFSI,  see  the  tables  on  potential  overlaps  below.  They  are  implemented  by  4 
different  Commission  DGs  and  two  implementing  partners.  Coordination  taking  place 
through  the  FIIEG  (Financial  Instruments  Independent  Expert  Group)  and  Steering 
Committees  for  each  of  the  instruments  as  well  as  Joint  Steering  Committees  for  equity 
and guarantee instruments. Such setup is not perfect and there is indeed evidence of partial 
overlap, e.g. between COSME Loan Guarantees and EaSI Guarantees. 

Overlaps exist also in other areas, in particular having arisen following the establishment 
of the EFSI, as recognised by the external EFSI evaluation and the EIB evaluation carried 
out in 2016. For instance the target group of EFSI support to innovation financing by the 
EIB  could  also  be  partially  served  by  the  InnovFin  financial  instruments  under  Horizon 
2020.  In  the  areas  of  infrastructure,  projects  potentially  eligible  under  the  Connecting 
Europe Facility Debt Instrument could also be targeted by the EFSI. 

While  coordination  among  Commission  DGs  (through 
inter-service 
consultations and Steering Committees, as well as informal coordination among DGs, can 
help  avoiding  overlaps  and  make  instruments  work  in  synergy,  there  are  still  however 
partial  overlaps  among  programmes.  In  addition,  the  coordination  requires  significant 
effort.  

the  FIIEG), 

The InvestEU Fund with its centralised approach, a single fund, a single Steering Board, a 
single  approval  process  of  the  operations  by  the  Investment  Committees,  a  single 
agreement  with  each  implementing  partner  and  participative  involvement  of  all  relevant 
policy  DGs  in  the  Policy  Boards  and  the  Inter-Service  Coordination  Committee  would 
ensure that EU financing is channelled in a coordinated and harmonised manner, without 
overlaps. 

146 

 
 
 
 
 
 
Potential overlaps - DEBT PRODUCTS SUPPORTING LENDING TO SMEs, 2014-2020 
DGs in 
Product name 
charge 
GROW  EIF 

Budget 
(EUR mln) 
840 

Manag
er 

Target 

SMEs 

Specific focus 

COSME LGF (Loan 
Guarantee Facility) 

InnovFin SMEG (SME 
Guarantee) 

EaSI Guarantee Instrument 

1.060 

RTD 

EIF 

SMEs and Small 
Mid-Caps 

96 

EMPL 

EIF 

Social enterprises, 
micro-enterprises 
and vulnerable 
groups 
SMEs 

CCS (Cultural and Creative 
Sectors) Guarantee Facility 

121 

CNECT  EIF 

1.137 

REGIO 
GROW 
RTD 

EIF 

SMEs 

SME Initiative 

SMEs with a high-risk 
profile 
Innovative and 
research-intensive 
SMEs and Small Mid-
Caps 
Implemented through 
microcredit providers 
and social enterprise 
investors 
Cultural and creative 
sectors 
Developed as an anti-
crisis measure. No 
specific target groups, 
but focus on 
participating 
Countries.  

Comment 

Potential overlap178 

Contributing to 
SMEI 
Contributing to 
SMEI 

Joint governance and loan size 
differentiation. 
Possible overlap with the SMEI 

Guarantee  

EASI Sub-fund 
Possibly with COSME LGF 

- 

Operational in BG, 
FI, MT, RO, IT and 
ES. 
InnovFin and 
COSME resources 
form part of SMEI 
resources. 
Funded product 

COSME LGF 
InnovFin SMEG 
InnovFin SMEG 
COSME LGF 

EaSI Guarantee Instrument 

EASI Sub-fund (under 
development) 

EMPL 

EIF 

67 EASI + 
133 from 
EIB/EIF 

Social enterprises, 
micro-enterprises 
and vulnerable 
groups 

  COSME LGF Frontloading 
I
S
F
E

Top-up  
InnovFin SMEG 

550 

880 

ECFIN 

ECFIN 

178 In terms of targeted final beneficiaries and expected policy achievements. 

Implemented through 
microcredit providers 
and social enterprise 
investors 
Cfr. COSME LGF 

Cfr. InnovFin SMEG 

147 

 
 
 
 
 
 
 
 
 
 
                                                 
Frontloading Top-up  
EaSI Guarantee 
Frontloading Top-up  
CCS Guarantee 
Top-up  
Securitisation instrument 
(under development) 

100 

60 

ECFIN 

ECFIN 

Cfr. EaSI Guarantee 

Cfr. CCS Guarantee 

100 + 100 
from 
EIB/EIF 

ECFIN 

EIF 

SMEs and Mid-Caps 
(to be finalised) 

Development of the 
securitisation market 

- 

COSME LGF securitisation 

Potential overlaps - EQUITY PRODUCTS TO SUPPORT CAPITAL INVESTMENT IN SMEs, 2014-2020 
Product name 

Manager  Target 

Specific focus 

Comment 

Potential overlap179 

COSME EFG (Equity 
Facility for Growth) 

EIF 

SMEs 

Companies in expansion 
stage 

Contributes to Pan-EU 
VC FoF 

Budget 
(EUR mln) 
490 (including 
fees) 

DGs in 
charge 
GROW 

EaSI Capacity Building 
Investments Window 

16 (including 
fees) 

EMPL 

EIF 

ESCALAR (under 
development) 

tbd 

GROW
ECFIN 

tbd 

Micro-credit and 
social finance 
providers 
SMEs and mid-
caps (to be further 
specified) 

Build up of the 
institutional capacity of 
financial intermediaries 
Expansion & growth 
phase, pre IPO 

In exceptional cases 
providing also loans 

Innovative support to 
VC funds through 
guaranteed loans 

RCR 

9.500 (of which 
2.500 from EFSI) 

- 

IFE (InnovFin Equity) 

495 (including 

RTD 

EIB 
(mandate 
to EIF) 
EIF 

179 In terms of targeted final beneficiaries and expected policy achievements. 

SMEs and mid-
caps 

Companies from pre-seed 
to expansion. 

- 

SMEs and Small 

Companies in their pre-

No longer stand alone, 

(see SMEW Equity 

148 

SMEW Eq. Instr. 
Pan-EU VC FoF 
ESCALAR 
RCR 

COSME EFG 
SMEW Eq. Instr. 
Pan-EU VC FoF 
EIB-EIF MFF 
RCR 
Potentially any other 
product. 

 
 
 
 
 
 
 
 
 
 
 
                                                 
 
SMEW Equity 
Instrument 

I
S
F
E

Pan-European 
Venture Capital Fund 
of Funds 

EIB-EIF SME FIF 
(Funds Investment 
Facility) (under EFSI 
IIW) 
EIB-EIF MFF 
(Midcap Funds 
Facility) (under EFSI 
IIW) 
EIB-EIF CIF (Co-
investment Facility 
under IIW)  

1.270 (including 
fees) + 458 from 
IFE + 290 from 
EIF 

Up to 300 from 
SMEW Equity 
Instr. + up to 100 
from COSME 

500 

ECFI
N 
RTD 

ECFI
N 
RTD 
GRO
W  
- 

500 

- 

100 + 100 EIB 

- 

fees) 

Mid-Caps 

seed, seed, and start-up 
phases in H2020 sectors 

EIF 

EIF 

SMEs and Small 
Mid-Caps 

SMEs and Small 
Mid-Caps 

Companies from pre-seed 
to expansion. Specific 
envelopes foreseen for: 
tech-transfer, business 
angels, social investment 
Companies from pre-seed 
to expansion 

being fully integrated 
with SMEW Eq. Instr. 
(see below) 
EFSI resources are 
combined with IFE and 
EIF resources into a 
single product 

Instr.) 

Potentially any other 
product. 

Falling under the 
SMEW Equity 
Instrument, it combines 
COSME resources 

COSME EFG 
ESCALAR 
RCR 

EIB 
(mandate 
to EIF) 

EIB 
(mandate 
to EIF) 

EIB 
(mandate 
to EIF) 

SMEs 

Companies from pre-seed 
to expansion 

Mid-caps 

Expansion & growth 
phase 

Co-investment in funds 
where EIF is already 
present with non-EFSI 
resources 
- 

SMEs and Mid-
Caps 

Companies from pre-seed 
to expansion 

Co-investment alongside 
funds where EIF is 
already present 

COSME EFG 
SMEW Eq. Instr. 
RCR 

COSME EFG 
SMEW Eq. Instr. 
ESCALAR 
RCR 
COSME EFG 
SMEW Eq. Instr. 
ESCALAR 
RCR 

149 

 
 
 
 
ANNEX 13: INVESTEU FUND – GOVERNANCE 

Figure: Visual representation of the current governance arrangements for EFSI and centrally managed FIs

150 

 
 
 
 
  
Figure: Proposed InvestEU Programme Governance 

151