The InvestEU program – the new EU investment program for 2021-2027 perspective
Last year in May, the European Commission presented to the European Parliament and the Council a new draft of the program regulation. The current draft in the wording of the compromising text of the German Presidency worked out at the Council level as of 14th December has been submitted to the European Parliament and should be adopted soon.
Purpose of the Program
The overall aim of InvestEU is to provide financing to economic entities with a risk profile that is not always acceptable to private financial entities, thus contributing to increasing the competitiveness of the EU economy. The planned scale of the fund is to generate investments of EUR 372 billion thanks to an EU budget guarantee of more than EUR 26 billion. The provisioning ratio for the EU guarantee was set at 40%.
The main pillar of the Program will be the InvestEU Fund. It is to integrate many currently implemented EU financial instruments under one brand in the future perspective and be the only starting point for EU investment support, among others in the form of loans, guarantees, counter guarantees, capital market instruments. The model for the new solution is the European Fund for Strategic Investments (EFSI) implemented under the Investment Plan for Europe, which initiated investments worth more than EUR 0.5 trillion.
The next part of the program will be the InvestEU Advisory Hub, which will bring together 13 different consulting services currently available into a single one-stop shop to assist with project development. It will provide technical support and assistance in the preparation, development, structuring and implementation of projects.
The European Investment Project Portal under the InvestEU program, on the other hand, had the task of ensuring visibility of investment projects across the EU, bringing together investors and project promoters. This creates an easily accessible and user-friendly database.
The InvestEU Fund will be based on an EU guarantee which is to secure financial products offered by implementing partners. The main partner will be the European Investment Bank group, which will use the EU guarantee in 75%, with an additional own contribution of EUR 4.9 billion, and other implementing partners, i.e. pro-development banks and pro-development institutions, will be able to apply for another 25% of the EU guarantee and they will also be required to provide the financial contribution specified in the guarantee agreements.
Main areas of program intervention
InvestEU will focus on those areas where the EU can generate the most added value by providing a budgetary guarantee to mobilize private and public investment.
Four main areas of program activity have been identified:
- sustainable infrastructure – financing projects, among others in the field of renewable energy sources, digital communications, transport, circular economy, water and environmental infrastructure – assigned value of the EU guarantee of EUR 9.9 billion.
- research, innovation and digitization – financing projects, among others in the field of research and innovation, transfer of research results to the market, digitization of industry, artificial intelligence – assigned value of the EU guarantee of EUR 6.6 billion.
- small and medium-sized enterprises – facilitating access to finance for small and medium-sized enterprises and mid-caps – assigned value of the EU guarantee of EUR 6.9 billion.
- social investments and skills – financing of projects, among others relating to: skills, education, training, schools, universities, hospitals and healthcare, social housing, social innovation, social enterprises and the integration of migrants, refugees and socially excluded people – assigned value of the EU guarantee € 2.8 billion.
Legislative work on the Regulation of the European Parliament and of the Council establishing the InvestEU Program can be followed at: