Ljubljana, 5th January 2016
The role of the EIB in supporting
transport infrastructure projects
Financial instruments under the CEF and EFSI
Alfredo Diaz
Mobility Department, Projects Directorate
EUROPEAN INVESTMENT BANK
European Investment Bank
1
The EU bank
• Natural financing
partner for the EU
institutions since 1958
• Around 90% of lending
is within the EU
• Shareholders: 28 EU
Member States
Investing in Europe’s growth
06/01/2016
European Investment Bank Group
2
The EIB at a glance
• Largest multilateral lender and borrower in the
world
• Raise our funds on the international capital markets
• Pass on favorable borrowing conditions to clients
• Some 440 projects each year in over 160 countries
• Headquartered in Luxembourg and 30 local offices
• Around 2 400 staff:
• Not only finance professionals, but also engineers,
sector economists and socio-environmental experts
• More than 50 years of experience in financing projects
06/01/2016
European Investment Bank Group
3
EIB Group track record:
almost EUR 500bn lent since 2008
06/01/2016
European Investment Bank Group
4
EIB in Slovenia
• EUR 4.979 bn worth investments approved by the
EIB in the last ten years (2006-2015)
• From which EUR 1.708 bn approved in the last
three years (2013-2015)
• Activity Sectors
•
•
•
•
•
SMEs: EIB grants attractive funding to Slovenian banks for them to finance SMEs.
TRANSPORT: Highway (DARS), Railway (TEN-T), Port of Koper (Luka Koper).
ENERGY: Electricity generation, transmission and distribution; gas transmission and
EE/RE.
EU FUNDS CO-FINANCING 2014-2020: Loan to co-finance investments supported
by EU structural funds.
ADVISORY: Post natural disaster – sleet February 2014 (project definition).
European Investment Bank
5
Financial Instruments: What are them?
 EC Financial Instruments combine EU risk capital and EIB
resources
 Target privately or commercially financed investments by
corporates or project companies or via financial intermediaries
 Typically higher risk operations using a wide range of
products – loans, guarantees, credit enhancement and equity
 Focus is on mobilising/supporting access to financing
 Development of tailored products to meet identified market
gaps (Shipping, SESAR, Broadband, ERTMS, etc)
European Investment Bank
6
Increased role for financial instruments
 Public sector budget constraints vs infrastructure needs means
greater need for private financing
 Policy focus on financial instruments reflects:
 Limited amount of grants available (no grants under EFSI)
 Leverage effect of financial instruments which makes them a highly efficient
use of budgetary resources
 Financial instruments have proven effective in encouraging long
term competitive external financing
 Financial Instruments may also be blended with grants to optimise
public sector support
European Investment Bank
7
New context: Investment Plan for Europe
The IPE consists of three legs:
1.
Improved investment environment: regulatory and structural
reforms at EU and national levels for predictability, removing
obstacles, aiming at a friendlier investment environment
2.
Making finance reach the real economy: stepped-up
technical assistance/advisory by establishing European
Investment Advisory Hub (EIAH) in EIB, enhanced EIB-EC-MS
cooperation on project identification (the “Project Directory”)
3.
Mobilizing finance for investment: The EFSI, via EIB, to
better address the shortage of (higher) risk-financing in EU
European Investment Bank
8
CEF and EFSI financial instruments
Main benefits:

expanded risk bearing capacity of EIB Group

new products (notably subordinated debt/equity-type
financing: risk sharing, contingent loans, equity-type)

scalable risk sharing instruments with commercial banks
as well as national promotional banks

financing to new client groups
European Investment Bank
9
Identifying projects for financial instruments
 Project identification:
 Focussed on project maturity/readiness/level of preparation
 Key features of financeable projects:
 Revenue generating potential
 Affordability of the project to users/public authority
 Performance based outputs
 Project where the commercial, legal and political risks are quantifiable
 Bankable project based on realistic projections of both costs and revenues
 Technical assistance to projects with potential
 Financial structuring support to projects
 Support to procuring authority in using financial instruments
European Investment Bank
10
Diversification of Financial Instruments
 Initially FI development focused on products geared to Project Financed projects.
 Broader, more scalable and diversified product range is needed and being actively
developed.
Products
Application
Greenfield Infra
PBCE
Capital markets
LGTT II
Banking market
Project
Finance
EFSI-CEF
Financial
Instruments
Corporates
Corporate
9/07/2015
Senior
Airports
Bond partial
guarantee
Ports
Hybrid Debt
products
Regulated entities
First Loss
Guarantee on
Portfolio
Transport
Authorities
European Investment Bank
11
Putting the money to work: what is needed?
 Need well prepared and bankable projects
 Apply structures to accommodate private financing i.e.
non-grant based model
 Need visible pipelines of future projects
 Member States streamlining/improving the permitting
and procurement framework
Need to expand pipeline of projects to avail of financing
European Investment Bank
12
Making it happen: Engagement with project counterparts

Contacts with EC and national counterparts to identify
projects suitable for financial instruments

Engagement with Project Sponsors and Investors:
identification of needs and scope for financial instruments at
project level

Interface with PCI/Corridor Groups and coordinators: focus
linked to corridor priorities and project readiness

Relationships with industry associations and fora: identifying
market needs and developing pilot programmes
European Investment Bank
13
Support Actions for CEF Debt Instrument
 Input to promoters and sponsors on the financial structuring of
projects
 e.g. TAP; France-Italy interconnector; LNG Krk
 Development of new tailored financial instruments for sector needs





CEF Broadband
SESAR
Green Shipping
ERTMS
Alternative Fuels
 Pipeline Development and selection of Pilot Projects
 Upstream Support Actions for promotion and implementation of
Financial Instruments
 EPEC; Meetings with Member States
European Investment Bank
14
What is the Advisory Hub?
DEMAND
Delivery channels
Access point
Project promoters
Public authorities
Member States
Private sector
Web content + Web portal + Support team
European Investment Advisory Hub
(EIAH)
Existing
advisory
programmes
and activities
Additional
advisory and
technical
assistance
EIAH’s
partner
institutions’
expertise
SUPPLY
15
European Investment Bank
What type of support is available?
TYPE OF SUPPORT
DESCRIPTION
PROGRAMMES
Support for projects
and investments
Advisory and technical support in
identification, prioritisation,
preparation, structuring and
implementation of investment projects
JASPERS, ELENA,
EPEC, Implementation
support programmes
Enhance use of EU
funds
Advisory and capacity building support
in the implementation of ESIF financial
instruments
fi-compass, bilateral
services to Managing
Authorities
Access to finance
Enhancement of the overall conditions
for financing for public and private
beneficiaries
Innovation Finance
Advisory
Access to the
expertise of the Hub’s
local partners
Access to new
advisory services
Advisory and technical support from
the Hub’s local network
Continuous development of the Hub’s
advisory offer to address unmet needs
A 360 degrees advisory offer
European Investment Bank
16
Thank you for your attention
[email protected]
European Investment Bank
17