Investment Plan for Europe Delivering on the European Fund for Strategic Investments (EFSI) Jukka Luukkanen Head of Helsinki Office Helsinki 12/04/2016 1
EIB at a Glance We are the world s largest International Financial Institution 1958 Established to support long-term investments primarily in the European Union. We have over 50 years experience in financing sustainable projects. Shareholders Owned by the 28 Member States of the European Union. Source of funds We raise long-term funds on the international capital markets and as a non-profit organisation we pass favourable borrowing conditions to our clients. AAA-rated We re triple-a rated by all major rating agencies and have a sizeable capital of 242.4 bn. 2
The EIB Group Providing finance and expertise for sound and sustainable investment projects Leading developer of risk financing for innovative SMEs 3
The EIB Group in 2015 EIB in 2015: EUR 77.5bn Record for the EIB Group: EUR 84.5bn EIF in 2015: EUR 7bn 4
KEY PRIORITIES - 2015 ENVIRONMENT INFRASTRUCTURE INNOVATION SME EUR 19.6bn EUR 18.9bn EUR 18.7bn EUR 29.2bn 5
EIB LENDING IN FINLAND IN 2015 Signatures in Finland 2011-2015 (in EUR m) EIB lending in 2015 amounted to 0.8% of Finnish GDP (vs. 0.55% on average in EU) 6
Why an Investment Plan Europe? Investment & competitiveness gap High liquidity in the market Public budget constraints Financial and non-financial barriers to investment EU Investment Plan EU and Member State policy action EU budget guarantee EIB capacity to mobilise additional investment 7
3 ways to tackle the investment gap Investment Plan for Europe Mobilise finance for investment European Fund for Strategic Investments Cooperation with National Promotional Banks Support investment in real economy European Investment Advisory Hub European Investment Project Portal Create an investment friendly environment Improving the regulatory environment Structural reforms Aim: to mobilise at least 315 billion in investment across the EU 8
EFSI setup and governance EFSI EIB Group All EFSI operations are within the EIB Group (EIB&EIF) On the EIB s balance sheet (no separate entity) Subject to standard due diligence EIB & EIF governing bodies approve each operation Additional EFSI governance: Steering Board Investment Committee, headed-up by a Managing Director Operations already started in spring 2015 9
Mobilising new investment 10
Making a difference Our value added Addressing market failures or sub-optimal investment situations Financing operations not possible to same extent otherwise Absorbing part of the risk to trigger additional investments Impact orientation Maximising growth Supporting employment Attracting other sources of finance 11
With targeted products Continuously adapting to market needs 12
Key areas Targeting strategic public and private investment Infrastructure: including transport, energy and digital Innovation: Education and training, health, research, development and innovation Renewable energy: Expansion of renewable energy generation and support of energy and resource efficiency Environment: Projects in the environmental, urban development and social fields SMEs and midcaps: Financing support through local partner banks and institutions 13
Who can benefit? Eligible counterparts Corporates of all sizes Utilities and public sector entities (non-sovereign) SMEs (up to 250 employees) or midcaps (up to 3 000) National Promotional Banks or other banks for intermediation Dedicated Investment Platforms Contact EIB Group directly via InfoDesk or relevant Operations Department www.eib.org www.eif.org 14
What kind of operations? Operations need to be: Commercially sound, economically and technically viable Underpin EFSI objectives Support growth and jobs Mature enough to be bankable Priced in a manner commensurate with the risk taken Covering EU28 countries or cross-border operations 15
SME financing under EFSI 16
First operations financed Financing for a Finnish bio-mill enhancement SME guarantee agreement EUR 75m introducing renewable energy generation to make the plant fossil fuel free Unlocking EUR 100m of loans for 1 000 SMEs in Bulgaria Driving clean energy investment For more sustainable industries Backing midcap modernisation Supporting smaller businesses Equity-type financing for an innovative fund EUR 75m for investment in offshore wind, biomass and transmission projects Funding cutting-edge steel production facilities EUR 100m for innovative and competitive steel products 17
EIF investment in Open Ocean Fund IV In 2011, EIF played a crucial cornerstone role in helping a team of former MySQL founders to raise their debut venture capital fund, Open Ocean Fund III with EUR 44.6m in total commitments. Fund III has performed well with promising value drivers in the unrealized portfolio (e.g. Truecaller, Nosto Solutions, EyeEm) with blue-chip syndication partners like Atomico, Balderton Capital, Holtzbrinck Ventures, KPCB and Sequoia. EIF is the largest investor in Open Ocean Fund III. Since EIF s initial support in 2011, the team of Open Ocean has positioned itself as the investor of choice for entrepreneurs in the software space whose business model relies on open source or community components, and it is a sought-after co-investor for European and American generalist VC funds investing in that sector. The specialized skillsets that the Open Ocean team brings to the entrepreneurial ecosystem are highly appreciated by the market. By investing in Open Ocean IV, EIF saw an opportunity to further contribute to the consolidation of a reputed European VC firm with a specialized focus and a key role in the development of European software start-ups. Consequently, EIF made a commitment of EUR 30m at the first closing, hence allowing Open Ocean Fund IV to reach a viable minimum closing size. EIF s commitment in Open Ocean Fund IV will constitute a transaction to be reported under European Fund for Strategic Investment (EFSI), in line with the call from the European Council of December 2014. 18
EIF and Pohjola Bank sign EUR 150m InnovFin agreement for innovative companies in Finland, Estonia, Latvia and Lithuania On 30 March 2016 the European Investment Fund (EIF) and Pohjola Bank (as part of the OP Financial Group), signed a guarantee agreement to increase lending to innovative small and medium-sized enterprises (SMEs) and small mid-caps in Finland, Estonia, Latvia and Lithuania This transaction benefits from the support of the European Fund for Strategic Investments (EFSI) The new agreement will allow OP Financial Group to provide EUR 150m of loans to innovative companies in Finland and the Baltic states over the next 2 years. The loans will be supported by an EIF guarantee under the EU InnovFin finance for Innovators initiative with financial backing from the European Commission's Horizon 2020 programme. 19
Results dashboard (EIB group) (as of 10 March) 20
Timeline and investment period 2015 2016 2017 2018 2019 2020 4 July 4 July 4 July 30 June Entry into force of EFSI Regulation Third anniversary of signing the EFSI Regulation 1st deadline for signature of EFSI operations Deadline for approval of EFSI Operations 2 nd deadline for signature of EFSI Operations Investment period to achieve EUR 315bn of total investments Extended investment period EFSI operations to target EUR 315bn of total investment by 2018 Actual investment period runs until 30 June 2020 21
Thank you! 22