Page 19 - ePaper
P. 19
In addition, the Parliament will be regularly informed about the activities of the EFSI (see
question and can invite its Managing Director and the Commission to answer specific
questions (see question 7).
44. By providing the first-loss guarantee, might the Fund not be saddled with
some loss making projects for decades? Will the EFSI enable financing of
projects that would be too risky for the EIB?
The EIB is a public bank whose activities are not guided towards making profit. The
characteristics of what it can do are limited by the fact that it is a bank that needs to repay
the funds which it uses to lend money and manage the risk of its portfolio. Having said that,
the EFSI will play the role of absorbing some of the risk so as to allow the bank to lend to
additional projects with higher risk profiles.
The intention is that the EFSI should not end up being the only financing source. The
objective is that the EFSI protects other investors against the first loss, making investments
more attractive for these investors. Projects will only be selected if - with the EFSI's
involvement – an appropriate multiplier effect can be achieved in terms of attracting private
investors and if the projects are viable. Obviously, some projects will generate higher
returns than others.
Projects will be selected by an independent board of experts – the Investment Committee –
based on their quality. There may be losses in certain projects, but the overall Fund
performance shall provide long-term returns to public and private investors and thus,
positive returns on taxpayer's money.
45. Where does the €5 billion EIB guarantee come from? The capital increase
of 2013? Money raised in the markets? Other resources?
The €5 billion come from the EIB’s own resources. The asset quality of the EIB’s outstanding
loans has improved in line with the economic environment. This has allowed reserves to be
freed that may be used to support this new initiative.
46. How can it be then that the EFSI doesn't crowd out other investment
projects of the EIB?
With the €16 billion EU guarantee the EIB will have substantially more firepower to finance
additional projects.
47. Does the same principle apply to the €8 billion guarantee from the EU
budget?
Yes. The €8 billion will be put in the EU guarantee fund. This will come from existing EU
funds: the budget reserve as well as the Connecting Europe Facility and the Horizon 2020
programme.
Thanks to the EFSI, the impact of these EU programmes on the real economy will be
multiplied, compared to what they would have achieved otherwise. The EFSI will invest in,
and finance, projects in the areas covered by these two instruments but, by multiplier the
resources, allows for far higher amounts to be used than the original intention. It is,
19
question and can invite its Managing Director and the Commission to answer specific
questions (see question 7).
44. By providing the first-loss guarantee, might the Fund not be saddled with
some loss making projects for decades? Will the EFSI enable financing of
projects that would be too risky for the EIB?
The EIB is a public bank whose activities are not guided towards making profit. The
characteristics of what it can do are limited by the fact that it is a bank that needs to repay
the funds which it uses to lend money and manage the risk of its portfolio. Having said that,
the EFSI will play the role of absorbing some of the risk so as to allow the bank to lend to
additional projects with higher risk profiles.
The intention is that the EFSI should not end up being the only financing source. The
objective is that the EFSI protects other investors against the first loss, making investments
more attractive for these investors. Projects will only be selected if - with the EFSI's
involvement – an appropriate multiplier effect can be achieved in terms of attracting private
investors and if the projects are viable. Obviously, some projects will generate higher
returns than others.
Projects will be selected by an independent board of experts – the Investment Committee –
based on their quality. There may be losses in certain projects, but the overall Fund
performance shall provide long-term returns to public and private investors and thus,
positive returns on taxpayer's money.
45. Where does the €5 billion EIB guarantee come from? The capital increase
of 2013? Money raised in the markets? Other resources?
The €5 billion come from the EIB’s own resources. The asset quality of the EIB’s outstanding
loans has improved in line with the economic environment. This has allowed reserves to be
freed that may be used to support this new initiative.
46. How can it be then that the EFSI doesn't crowd out other investment
projects of the EIB?
With the €16 billion EU guarantee the EIB will have substantially more firepower to finance
additional projects.
47. Does the same principle apply to the €8 billion guarantee from the EU
budget?
Yes. The €8 billion will be put in the EU guarantee fund. This will come from existing EU
funds: the budget reserve as well as the Connecting Europe Facility and the Horizon 2020
programme.
Thanks to the EFSI, the impact of these EU programmes on the real economy will be
multiplied, compared to what they would have achieved otherwise. The EFSI will invest in,
and finance, projects in the areas covered by these two instruments but, by multiplier the
resources, allows for far higher amounts to be used than the original intention. It is,
19
