As you know, two years ago we started this process. The Investment Plan for Europe consists of three different elements: EFSI, which is the topic of the day; and then advisory services plus the Investment Project Portal, the second pillar; and then the third one is deepening our internal market and addressing the investment gaps or barriers at the national level. But today's topic is EFSI.
Almost 380,000 European SMEs can already now benefit from EFSI financing. It basically means that we have 243 agreements between EFSI and intermediary banks. The banks can be commercial banks, nationwide banks or local banks, or then in some countries in which they have national promotional banks, they also are transmitting SME financing. I must say that the demand has surprised us a bit: 380,000 SMEs are already in a position to benefit from EFSI financially. If you add these 151 large-scale infrastructural projects, we get the final figure of today, which is 154 billion euros in new investments. This covers both SME financing and those bigger infrastructure projects. Sixty percent of the mobilised investments come from private investors. So, EFSI functions as planned. It crowds in private resources from the market. We are not lacking of liquidity—Europe is full of liquidity—but for instance, because the banking regulation has changed, banks' risk bearing capacities are lower than they used to be, and that's why, EFSI, when it's providing risk financing, or it guarantees the loans, or it's providing loans or it's doing equity investment, it addresses the market failure, which we have in our markets.
Let me give you some examples of projects financed by EFSI. All the projects which have been signed, you can find from EIB's website. But here are just three examples:
In France, EFSI financing will enable 40,000 homeowners to access long-term loans and technical assistance in order to retrofit their homes and save energy. So, the asset value, in other words the home value or building value, is getting higher and home owners will save every month a significant amount of money as their homes are getting more energy efficient. This particular project creates 6,000 jobs during the construction phase and saves energy consumption roughly equivalent to 9,600 households. So, close to 10,000 households are using energy we can save because of the project.
Another example is in Bulgaria and Slovakia, a guarantee agreement to enhance access to finance to innovative SMEs and midcap companies allows CIBANK to provide loans at favourable terms for two years, worth 65 billion euros.
The third one, in Belgium, urban regeneration project of former industrial sites will help cleaning up contaminated sites, using environmentally friendly techniques, and converting them into homes and offices. The project is expected to create around 5,000 housing units as well as providing 8,500 full-time equivalent jobs. So, EFSI functions on the ground.
Today, the Commission adopted a Communication on the evaluation of EFSI. The Communication takes stock of the three evaluations foreseen in the original Regulation on the EFSI and the European Investment Advisory Hub. There is one assessment done by us, the Commission; another one from EIB, European Investment Bank; and the third one is an independent evaluation done by Ernst and Young.
In line with the requirements of the EFSI Regulation, the European Court of Auditors also issued an opinion on the Commission's evaluation on the 11th of November this year. These three evaluations allow stakeholders to gain a comprehensive overview of the functioning of the EFSI so far and are already feeding into the ongoing legislative discussions on EFSI 2.0. The Communication concludes that the three evaluations strengthen the case for extending and reinforcing the EFSI.
This is very much in line with the Commission Proposal for EFSI 2.0, which was announced by our President Juncker in his State of the Union speech. We will double EFSI in terms of duration and its financing capacity.
As you probably know, EFSI 1.0 allows the EIB to finance projects worth 63 billion euro, and is supposed to mobilise additional investment worth 315 billion euro in 3 years' time. Now the new Proposal will allow the EIB to finance projects, instead of 63 billion euro, 100 billion euro in five years' time. This will lead us to a situation where the amount of additional investment will be approximately 500 billion in 5 years' time. EFSI 2.0 addresses the evaluations' main recommendations whilst ensuring continuity. Regarding the recommendations, the EFSI 2.0 proposes, for example:
First, to address the geographical balance by providing more targeted, local, technical assistance all across the EU. Second, to simplify how EFSI can be used together with other EU funding sources, like the Structural and Investment Funds. We are calling this sub-lending. Third, to enhance transparency in investment decisions and governance procedures by requiring the Investment Committee of EFSI to make its decisions public.
I have heard many times claims that the EFSI would only be useful for larger Member States. But if you look at these couple of charts you may get a slightly different view on the issue. If looking at EFSI's influence in the Member States, meaning that how much EFSI has contributed to their GDP, you get a different view on EFSI's functioning than if only looking at how many projects per country there are. The biggest beneficiary of EFSI per GDP is Estonia. Number two is Bulgaria, number three Spain, four Italy, fifth Greece, sixth Lithuania, seventh Latvia, eighth Portugal, ninth Slovakia and then Slovenia. There is only country so far which has not used EFSI, and that is Cyprus. I know that there are some projects in the pipeline which hopefully we can finalise as soon as possible. Romania, Austria, Netherlands, Malta, Sweden and Germany are the countries in which EFSI has contributed the least relative to their GDP.
Just to give you something to think about: if you compare Bulgaria and Romania, Bulgaria is number two and Romania is down on the list. Why is it like this? There are several reasons. First of all, in Bulgaria private banks have been quite active users of EFSI, so private banks have made an agreement with the European Investment Fund, which is backed by EFSI, and they are providing financing to small- and medium-sized enterprises in Bulgaria, whereas in Romania, this hasn't happened. I met CEOs of the biggest banks in Romania and they said that there is no demand for this kind of SME financing. I do not know whether this is true or not, but this is what they told us. So this is one of the reasons why Bulgaria and Romania are so far from each other in this respect.
Also, not directly linked to the two countries, but in some countries they have a well-developed project pipeline which is already there, whereas in other countries, because of differences in administration for instance, there is no solid project pipeline. That is why once you start preparing infrastructure projects it always takes some time. This is another encouragement for Member States to have a solid project pipeline which goes over time and which goes over the election terms.
Our aim is to convey this message and make sure that especially SMEs know what EFSI is about, and to make sure that EFSI can be used in all parts of Europe. Our number one challenge with EFSI is to raise awareness because there are still too many companies and public authorities who don't know what EFSI is about and how it functions. We advertise EFSI all the time and we try to use good examples to show what others have done and by doing so encourage other countries and regions and companies to look at this opportunity.
Final point: if somebody is interested in looking at EFSI's opportunities, you do not need to call the European Commission or the government. The only thing you need to know is the phone number of the EIB's office in your own capital. The EIB is establishing more and more offices in our Member States and upgrading existing offices, and all the information which investors need can be given in your own countries.
Thank you very much.
General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email
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