Brussels, 13/04/2015 (Agence Europe) - The European Investment Bank (EIB) says that the guarantee from the EU budget for the future European Fund for Strategic Investments (EFSI) has to be robust and available as soon as the fund comes onstream in the summer.
EIB vice-president with responsibility for climate and energy Jonathan Taylor told a handful of reporters on Monday 13 April that there has to be a guarantee that is 100% available or at least robust, when the EFSI starts up. He said the money markets need to be assured that projects backed by the EFSI that they're investing in will have the highest public guarantees against any losses because otherwise they will demand a higher return for the money they invest.
In the initial proposal, the European Commission suggests withdrawing money from cash already allocated to the Horizon 2020 research budget and for the Connecting Europe mechanism in order to establish a public guarantee for the EFSI of €16 billion. The member states at the EU Council of ministers take the same view, but the European Parliament, which is fine-tuning its negotiating position ahead of a committee vote by the end of April, fears that this would damage the four budget lines in question, that are in themselves designed to boost investment potential in Europe. The EP is looking at the idea of gradually setting up a guarantee or using the 'flexibility' budget lines (see EUROPE 11283).
On Tuesday, the EP's industry committee will vote on its own initiative position on the Juncker Plan. One thing that will be discussed is the idea of reserving some of the EFSI financing for projects to promote energy efficiency but Taylor said it was better to give as much flexibility as possible in the way the funding can be used as there was the danger that if there were not enough projects in a particular area, then the money couldn't be used in other areas.
In 2014, the EIB granted more than €20 billion in loans (25% of the total) to projects to tackle climate change. If the EFSI, that will help riskier projects that would find it difficult to find finance, doesn't achieve a similar ratio of 25% of financing, then other EIB financing tools would have to be used to meet the target. (Mathieu Bion)