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The Multiplier
52. The 1:15 multiplier is considered by the Commission as "a prudent
average, based on historical experience from EU programmes and the
EIB". What is the concrete experience you are referring to?
As representatives of the EIB have said on several occasions, the multiplier effect is
considered to be "conservative", based on the EIB experience. The risk-department of the
EIB has a long track-record of lending activities in different sectors. By way of example, the
EIB capital-increase from 2012-13 is generating a multiplier effect of 1:18. On the
Commission side, experience from the COSME programme (SME-financing), suggests a
multiplier effect of at least 1:20.
53. What is the concrete data available? Is this historical experience relevant
to the current situation with squeezed national budgets?
The multiplier effect is an estimated average and there is no direct link to national budget
situations. An important element of the multiplier factor is the crowding-in of private
investors. By contrast to some years ago, there is today a high level of liquidity in Europe,
meaning that private investors have available liquidity which they can mobilise for
investments.
54. What kind of financial vehicles will the EFSI's activities rely on to attract
private/public investors in the financing of a project? Debt and Risk
enhancement vehicles? Project-bonds? Equity instruments? Other types of
financial instruments?
The EFSI will work with a wide range of financial instruments and will be flexible in terms of
which instrument to use, depending on the project in question, to ensure the most efficient
financing solutions. The EFSI can for example use debt instruments, guarantees, equity,
quasi-equity instruments, credit enhancement tools or venture capital. It will be able to
finance projects directly or participate in funds that finance various projects.
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52. The 1:15 multiplier is considered by the Commission as "a prudent
average, based on historical experience from EU programmes and the
EIB". What is the concrete experience you are referring to?
As representatives of the EIB have said on several occasions, the multiplier effect is
considered to be "conservative", based on the EIB experience. The risk-department of the
EIB has a long track-record of lending activities in different sectors. By way of example, the
EIB capital-increase from 2012-13 is generating a multiplier effect of 1:18. On the
Commission side, experience from the COSME programme (SME-financing), suggests a
multiplier effect of at least 1:20.
53. What is the concrete data available? Is this historical experience relevant
to the current situation with squeezed national budgets?
The multiplier effect is an estimated average and there is no direct link to national budget
situations. An important element of the multiplier factor is the crowding-in of private
investors. By contrast to some years ago, there is today a high level of liquidity in Europe,
meaning that private investors have available liquidity which they can mobilise for
investments.
54. What kind of financial vehicles will the EFSI's activities rely on to attract
private/public investors in the financing of a project? Debt and Risk
enhancement vehicles? Project-bonds? Equity instruments? Other types of
financial instruments?
The EFSI will work with a wide range of financial instruments and will be flexible in terms of
which instrument to use, depending on the project in question, to ensure the most efficient
financing solutions. The EFSI can for example use debt instruments, guarantees, equity,
quasi-equity instruments, credit enhancement tools or venture capital. It will be able to
finance projects directly or participate in funds that finance various projects.
21
