EFSI and Investment Platforms: state of play. CDP & EIF initiatives: 2i per l impresa, ENSI, Equity Platform, CEBF

Transcription

1 EFSI and Investment Platforms: state of play CDP & EIF initiatives: 2i per l impresa, ENSI, Equity Platform, CEBF Bruxelles, 26 September 2016

2 CDP: Mission and Ownership CDP is the National Promotional Institution supporting Italy s growth by: Promoting Italy with a particular focus on social and sustainable growth Investing in long-term projects as a market operator Leveraging domestic and international financial resources, as a complement to the banking system Offering a timely response to market limits with a systemic and countercyclical role MEF 18.40% BANKING FOUNDATI ONS 1.50% 80.10% CDP is a joint-stock company under public control: 80.1% owned by the Italian Government 18.4% held by 64 Bank Foundations 1.5% of treasury shares

3 CDP: an evolving role Use of Cassa funds Art. 16 CDP funds will be used for loans to Divisions, Provinces, Towns and Cities, and Charity Institutions for the realization of public works and their debt resolution. Postal savings services were created with law n 2779 of 27 May 1875 «under State guarantee within Cassa Depositi e Prestiti.» NPI - National Promotional Institution Joint-stock company under public control (financing the Country s infrastructures) Leader in financing Local Authorities and PA Key player in supporting SMEs, project finance, export finance, social housing, equity ex Com. CE ex Legge di Stabilità Working together for Growth and Jobs: the role of National Promotional Banks and Institutions supporting the Investment Plan

4 The challenges of the new business plan Funding Priority Areas of development Business Volumes ( ) /bn Business Volumes ( ) /bn Postal Saving Bonds Government e Local Administrations ~13 +22% ~15 Passbook Saving Accounts Infrastracture ~20 +23% ~24 ~117 Other sources Enterprises ~67 +73% Enhancing domestic savings to support the real economy Real estate Total Volumes National, European and International Investors ~2 +100% ~ Catalyzing national and European private and public resources; strenghtening national connection

5 EFSI EIB Group NPIs cooperation

6 EFSI - Investment Plan for Europe - State of play EFSI in Italy (EUR 2.8 bn) Infrastructure and Innovation Window: 13 projects > 1,8 bn > 5,7 bn (3,800 jobs) SMEs Window: 30 agreements > 983 ml > 8,1 ml (59,000 SMEs)

7 CDP & EIF together for SMEs The Investment Plan has promoted the cooperation between the EIB Group and European National Promotional Institutions, among which Cassa Depositi e Prestiti PROMOTIONAL institution with long-term view NPIs SYSTEM APPROACH, anti-cyclical in response to market gaps COMPLEMENTARY to financial system channeling domestic and international resources also considering the key role of investments platforms designed to catalyse resources from the private sector with the aim of aggregating projects, reducing costs and more effectively distributing the risk among investors. SUSTAINABILITY: Investment logic as «market operator» Creating value for TERRITORY and attention to social issues and sustainable growth

8 NPBI Definition of National Promotional Bank and Institution (NPBI) NPBIs are defined as legal entities carrying out financial activities on a professional basis which are given a mandate by a Member State or a Member State s entity at central, regional or local level, to carry out development or promotional activities. This definition comprises BPBIs in very different forms, distinctive promotional products being offered according to country-specific needs.

9 EIB NPI cooperation under EFSI Investment Platforms (IP) Investment Platform (IP) is a tool for pooling investment projects with a thematic or geographic focus. Key topics: EIB Group-NPI cooperation is important for the success of EFSI. NPIs have products offering which are complementary to EIB products and to existing financing alternatives. NPIs have important geographical reach. NPIs can participate in Investment Platforms as: Sponsors, Investors, Implementing entities. EIB will apply to IPs its rules, policies and procedures as applied for its own risk operations. IPs to focus on market failures and crowding in: Provide financing or support to sectors not currently sufficiently serviced by traditional financial intermediaries. Facilitating inclusion (crowding-in) of investors towards the financing of projects and sectors.

10 EIB NPI cooperation under EFSI IP IPs are co-investment arrangements structured to catalyze investments in a portfolio of projects with a thematic or geographic focus. IPs are a means to: Aggregate investment projects Reduce transaction and information costs Provide more efficient risk allocation between investors Structural definition of IP: Special purpose vehicles Managed accounts Contract-based co-financing or risk-sharing arrangements Other structural arrangements

11 EIB NPI cooperation under EFSI IP Characteristics of EIB-NPI ESFI Investment Platforms: Combine resources from EIB, NPIs, inst. investors & swf IPs can benefit from EFSI financing under Infrastructure and Innovation and SME windows Geographic Scope National / Multi-country / Regional / Multi-regional focus Thematic Scope Mono-sector / Multi-sector focus IP Product offering: Equity or quasi equity investment in projects or funds Loans or guarantees to projects Guarantees or counter-guarantees to intermediaries

12 Extension of EFSI (EFSI 2.0) EC Proposal ( ) to extend EFSI until , increasing the overall target to at least EUR 500 ml (EUR 630 ml by 2022). Key topics: EU guarantee to EFSI increased from EUR 16bn to 26bn; Guarantee Fund s provisioning up to 35%. EIB contribution from EUR 5bn to EUR 7.5bn. The guarantee fund increased by EUR 1.1bn reaching EUR 9.1bn (EUR 500ml by CEF, EUR 450ml by EFSI income, EUR 150ml from unallocated margin). Scaling-up of the SME Window, extremely successful and running out of resources in EFSI 1.0 Enhancement of the European Investment Advisory Hub (EIAH) Priority to projects that support COP21 objectives and to cross-border infrastructure projects. Reinforcement of additionality of projects under EFSI, criticized as ambiguous in EFSI 1.0 Take-off of EFSI in less developed regions and transition regions, also combining European Structural and Investment Funds (ESI). Exclusion of motorways (unless in cohesion countries), inclusion of agriculture, fishery and aquaculture as eligible sectors under EFSI. Increased transparency (IC to explain its decisions, accessible; publication of the scoreboard of indicators).

13 CDP-EIB/EIF cooperation under EFSI Some first initiatives: 2i per l impresa ENSI Equity Platform CEBF

14 The first «Juncker» product of CDP Group for SMEs Before Three scenarios, threedifferent products Now 2iperl impresa: Three scenarios, one single product Medium to long-term funding Garanzia Provvista Controgaranzia = + Guarantees up to 50% for financing of SMEs internationalisation + Guarantees covering 50% of the business risk under COSME and InnoVFin (*) target InnovFin: PMI (definizione comunitaria) e Small Mid-Cap (num. dipendenti < 500) «innovative»; target Cosme: PMI (definizione comunitaria) 6

15 Bank creditis transfer Garanzia Provvista Controgaranzia Scheme Funding at «zero weighting» Guarantee at «zero weighting» Agreements BANKS SMEs Platform 2i per l impresa Financing SMEs and Small MID- CAPs Couter-guarantee (InnovFin/Cosme) Commercial «Bundle» CDP funding at zero weighting supported by a SACE guarantee, issued at a lower cost of almost bps compared to the ordinary one. SACE guarantee up to 80%, issued on a loan-by-loan basis (no portfolio) and granted upon eligible criteria of SACE and EIF FEI counter-guarantee at 50% supporting SACE guarantee and backed under Cosme e InnovFin of the Juncker Plan (SME Window) InnovFin CDP Group provides guarantees on bank loans to innovative companies: EUR 600 ml SMEs COSME agreement: EUR 400 ml 500 companies 7

16 Expected benefits + + Without 2iperl impresa Percentage covered Usually 50% 80% for InnovFin Up to 70% for Cosme Maximum amount of financing Security costs And more for the bank Up to 5,0 mln Dependent on the rating of the beneficiary and the tenor mortgage Up to 7,5 mln for InnovFin Up to 5 mln for Cosme On average lower thanks to EIF counter-guarantees CDP Funding cost Usually, the funding at «zero weighting» covers for 50% of the financing issued by SACE Possibility of profiting from a lower cost for the quota guaranteed by SACE Administrative burden and operating risks Reporting burdens and due diligence on the requirements that the firms have to respect and fulfill with SACE Per maggiori informazioni:

17 EIF and NPIs Securitisation Initiative (ENSI) ENSI is an network of NPIs and EIF to stimulate SME lending via the capital markets.

18 EIF & CDP in the Joint Securitisation Initiative ENSI: cooperation between the EIF and the National Promotional Institutions (NPIs) to stimulate SME lending via capital markets Joint activities (investments & guarantees) in order to enanche SMEs financing in securitisation transactions. Tranche Senior Investors Private investors NPIs / EIF / EIB Funding, capital relief, reduction of portfolio concentration to financial intermediaries that can receives these benefits against a committment to extend new SME lending Harmonised and efficient cooperation with streamlined procedures and eligibility criteria Mezzanine Equity Junior Private investors NPIs / EIF / EIB Public funds Private investors or public funds Further informations: ENSI - EIF NPIs Securitization Initiative

19 ENSI implementation ENSI is a framework for EIF and the NPIs to co-invest in securitisation transactions. The investment may take the form of the purchase of notes issued in a cash transaction or the guarantee (counterguarantee) of payments on such notes. Platform products: mainly true sale securitisation and potentially synthetic securitisations ( loan portfolio tranched cover ) Risk appetite: senior and mezzanine tranches Objective: to channel more funding resources to the European SMEs by means of increasing funding to the financial intermediaries and potentially helping them lower capital requirements and reduce portfolio concentrations Requirement: originators commit to provide new lending to SMEs Simplified access to joint support measures of European NPIs and EIF with the lowest possible bureaucratic burden The European Commission envisages the allocation of EU funds under mezzanine tranches under EFSI SME Window

20 EIF-NPI Equity Platform Partnering with national and regional promotional institutions active across the EU Member States to promote best practices in policy-driven equity investments and further enhance access to funding for SMEs and Midcaps. Objectives: share of information and best practices; improve access to VC funding in the EU; avoid dublication of tasks; share investment/pipeline opportunities; promote common practices and standards. Target EU value added investments / sectors Crowd-in private sector, critical mass for European VC Cooperation with NPIs through mutual reliance to achieve: Increased geographic reach Enhanced speed Reduced operational complexity Harmonised standards and processes Simplified access to finance Combine investment capacity Products to complement NPIs current activitites Further informations:

21 DECISION-MAKING EIF as Platform Manager EIF holds sole responsibility / liability vis-à-vis the EU of the operations and investments of the Platform EIF Equity Investments may delegate part of the Due Diligence and Monitoring to NPI(s) better equipped to carry out such duties EIF Risk Management and EIF Compliance to form independent opinions on DD results EIF Board to approve of deal based on EIF DD (potentially together with NPI), and EIF Risk and Compliance opinions Each NPI retains sole responsibility / liability and decision making power of individual (participation in) Platform investments Possibilities for mutual reliance For EIF, this means that at a minimum, EIF Risk Management will have to provide an independent opinion on each investment, and EIF Board take decisions

22 EIF-NPI COOPERATION: EQUITY PLATFORM EIF checks admission criteria NPII apply online The General Forum Meets typically once per year Strategy and policy focused Recommendations to CF Broad NPI participation with EC and EIF The Secretariat (held by EIF) Forum elects Consultative Forum, annually Organs of the Platform: The Consultative Forum Meets regularly Operational and techincal focus with emphasis on best practice, possible cooperation and investment activities Policy and Market gap assessment Standards and methodologies # Investment decisions remain with EFI / NPI Outcome / Objective of the Platform Main Objectives: Framework for EFSI SMEW Equity coinvestments Crowd-in private sector Additional Objectives: Framework for non- EFSI co-investments Harmonised standards Shared practices Coordination of EU/national/regional investment pipelines Collaboration on investment and/or other ad hoc projects

23 Connecting Europe Broadband Fund (CEBF) EU Investment Platform for broadband projects Large telecom operators investments, public subsidies are available, but remain an important investments needs in the less dense areas, which generally show lower returns on investment than urban areas, but, at the same time, are not eligible for subsidies dedicated to nonprofitable rural areas only. To address this investment challenge in less dense areas, the EC together with EIB propose to set up a new commercial fund of a target size of EUR 500 million. NPBIs have also been actively involved in the initiative. The funds coming from the Connecting Europe Facility (CEF), EFSI and the EIB, together with capital from NPBIs and the private sector, will be invested into economically viable broadband projects. The scarcity of financing solutions is particularly pronounced for smaller projects.

24 Connecting Europe Broadband Fund (CEBF) Market assessment: - An Investment opportunity of 34bn in EEA countries; - Strong pipeline in IT, FR and DE; - Equity and quasi-equity financing; - Medium risk range of eligible projects; - Public support to trigger further investment; - No standard PPP formula. Initiative requires attracting an experienced fund manager, with a strong track record in financing infrastructure and ICT projects, and with the ability to work across several EU countries. The European Investment Bank (EIB) published a call for expression of interest for a fund manager, who will be responsible for managing this EUR 500 million investment fund for broadband projects. After the selection of a fund manager, the EIB will prepare for the launch of the fund, expected by the end of 2016.

25 Investment strategy of the Fund (CEBF) Eligible projects according to the legal base of Connecting Europe Facility (CEF), i.e. broadband projects contributing significantly to the achievement of the targets of the Digital Agenda for Europe: at least 30 mbps connections, with priority given to projects contributing to speeds of 1000 mbps and EFSI. Specific focus on less dense areas (white and grey areas). Investment size: max. EUR 30 mln (indicative average EUR 10 mln, min EUR 1mln,). The fund would need to be additional to other sources of funding either from the market or from other EU instruments. Objectives: Geographic diversification (minimum 12 countries, target 20 countries), portfolio diversification and high broadband speeds.

26 Delivery channels Access point European Investment Advisory Hub (EIAH) DEMAND Project promoters Public authorities Member States Private sector Web content + Web portal + Support team European Investment Advisory Hub Existing advisory programmes and activities Additional advisory and technical assistance EIAH s partner institutions expertise Project support throughout the project cycle Support to Financial instruments Enhance access to finance New investment support also in areas relevant to the scope of EFSI (could be delivered by EIB advisory or operational teams) Identification of needs as they arise SUPPLY Network of institutions incl. EIB Group, European Commission, National Promotional Banks and Institutions, etc. Integrated collaboration model 26

27 Building the EIAH Partner Network MoU signatures as of today Situation as at Signed MoUs MoUs to be signed NRWB PMV KfW SFPI NIA Germany Belgium Germany Belgium The Netherlands SID Bank Altum MFB BDB HBOR SBCI CMZRB AWS SZRB AM BPI France CDC BGK Invega Almi VIPA ZBP ICO CDP Slovenia Latvia Hungary Bulgaria Croatia Ireland Czech Republic Austria Slovakia France France Poland Lithuania Sweden Lithuania Poland Spain Italy UIC -

28 Thank you for your attention The document and its contents are for information and illustration purposes only. The current document is not intended to be exhaustive and its contents may not be necessarily interpreted as an official position of CDP or of any other Institutions and entity mentioned in the document. The information and data contained in this document do not constitute a commitment and are subject to modification.