The European Fund for Strategic Investments

Chapter 1
What is it?
The financial arm of the Investment Plan for Europe, 
the European Fund for Strategic Investments, tackles 
three pressing issues–economic, environmental 
and non-financial barriers to investment, capacity 
constraints and subdued investment activity. The 
plan was designed by the European Commission and 
the European Investment Bank in 2014 and launched 
for a five-year period in the summer of 2015.
It was born from the diagnosis that following the 2008 financial 
and economic crisis, investment activity in Europe was far too low 
and that the competitiveness gap between Europe and other parts 
of the world was growing rapidly. These problems were driven by 
a credit crunch for private sector financing (despite ample liquidity), 
a fragmented banking system, underdeveloped capital markets and 
severely limited public resources, as well as other non-financial 
investment barriers.
As the financing arm of the Investment Plan for Europe, EFSI 
enables and challenges the European Investment Bank Group to 
increase support for viable projects with risk profiles that go beyond 
the EIB’s own risk-bearing capacity. As a public policy instrument, 
it also has to address market failures and suboptimal investment 
situations.

From the beginning, EFSI had three clear objectives: additionality, 
mobilised capital and impact. The eligibility of each project for 
the EFSI guarantee is assessed based on these three criteria. The 
EIB Group remains the lender or financier, with all related activities 
performed by the EIB (such as due diligence, funding, risk 
management, legal and contractual requirements towards the client, 
monitoring, governance, etc.). That allows EFSI governance (as the 
guarantor) to focus solely on the crucial decision as to whether the 
EU guarantee should be made available, based on the assessment 
of the EFSI eligibility criteria. This keeps the process lean and 
efficient.
The EIB Group has a detailed reporting obligation towards the 
European Commission (which provides the guarantee) and the 
European Parliament (which legislates the EFSI regulation). 

Wilhelm Molterer, Managing Director
Here’s how I would describe EFSI to someone who 
knew nothing about it. You have two big machines. 
One is called the EIB Group. The other is the EU budget. As 
long as the two machines are running in parallel and not 
interconnected, their efficiency is no more than acceptable. 
But if you put the strength of these machines together, you 
are not just doubling the effort—you are making three to five 
times more out of what you put in. EFSI has an even higher 
level of multiplication. If you have a budget guarantee of €1, 
you make €15 in terms of the investment volume supported 
in the real economy. That is the real story. 

The European Fund for Strategic Investments