Implementation of the European Fund for Strategic Investments: From EFSI 1.0 to 2.0 and beyond

18-12-2018

The European Fund for Strategic Investments (EFSI), one element of the ‘Juncker Plan’, was proposed in 2015 with the aim of covering part of the investment gap that occurred as a consequence of the global financial and European sovereign debt crises. In the absence of adequate public investment, the plan would mobilise private investment in specific areas through the use of first-loss guarantees provided from the EU budget. It was estimated that, through the provision of €21 billion in guarantees, a total investment of €315 billion would be generated by end-2017. Given its promising start as well as the broadly positive overall evaluations by the European Commission, the European Investment Bank and EY, it was soon decided to extend EFSI's duration and guarantees, allowing the fund to unlock additional investment of at least €500 billion by the end of 2020. EFSI – now called 'EFSI 2.0' – was also amended with a view to improving its governance and transparency. Four years after its inception, EFSI seems to be fulfilling its promise. Indeed, figures from October 2018 show €67.3 billion worth of approved EFSI financing, which is expected to mobilise €344.4 billion in investment. Furthermore, while the total funding generated will only be visible after a few more years have elapsed, the additionality and complementarity of the projects signed bode well. Nevertheless, the picture will be more complete after the end of the ongoing audit by the Court of Auditors. For the period of the next multiannual financial framework (2021-2027), EFSI 2.0 will be replaced by a yet broader programme, InvestEU (subject of a separate EPRS briefing), which is expected to generate an additional €650 billion over the period.

The European Fund for Strategic Investments (EFSI), one element of the ‘Juncker Plan’, was proposed in 2015 with the aim of covering part of the investment gap that occurred as a consequence of the global financial and European sovereign debt crises. In the absence of adequate public investment, the plan would mobilise private investment in specific areas through the use of first-loss guarantees provided from the EU budget. It was estimated that, through the provision of €21 billion in guarantees, a total investment of €315 billion would be generated by end-2017. Given its promising start as well as the broadly positive overall evaluations by the European Commission, the European Investment Bank and EY, it was soon decided to extend EFSI's duration and guarantees, allowing the fund to unlock additional investment of at least €500 billion by the end of 2020. EFSI – now called 'EFSI 2.0' – was also amended with a view to improving its governance and transparency. Four years after its inception, EFSI seems to be fulfilling its promise. Indeed, figures from October 2018 show €67.3 billion worth of approved EFSI financing, which is expected to mobilise €344.4 billion in investment. Furthermore, while the total funding generated will only be visible after a few more years have elapsed, the additionality and complementarity of the projects signed bode well. Nevertheless, the picture will be more complete after the end of the ongoing audit by the Court of Auditors. For the period of the next multiannual financial framework (2021-2027), EFSI 2.0 will be replaced by a yet broader programme, InvestEU (subject of a separate EPRS briefing), which is expected to generate an additional €650 billion over the period.