Three pillars
InvestEU presents many opportunities for social economy actors to improve their access to finance. For this purpose, the programme stands on three legs: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund will mobilise public and private investment using a €75 billion guarantee that will support four policy areas: sustainable infrastructure; research, innovation and digitisation; small and medium businesses; and social investment and skills. It is estimated that investments worth €650 billion will be generated. Similar to the Juncker Plan, the InvestEU Fund will be accompanied by the InvestEU Advisory Hub which will provide advisory and technical support on investment projects that need financing. The hub will assist national promotional banks and institutions with financial support for the development of their own advisory capacity or for the provision of such services to ensure that financial instruments are adapted to local and regional needs. The InvestEU Portal will present itself as an accessible database of mature projects, giving them more visibility. It will bring together project promoters and investors, enabling them to find investment opportunities in the sector or location of their interest.
How does the Fund work?
The Fund will be invested through diverse financial partners. The main partner will be the European Investment Bank Group (EIB) who will deploy 75% of the EU guarantee; the remaining 25% will be open to other partners, such as Member States’ national and regional promotional banks and other institutions that can offer specific expertise and experience. This should ensure that smaller projects will also be eligible for funding and that the investments consider local and sectorial particularities. Additionally, the InvestEU Fund will feature a Member State compartment for each policy area which gives the Member States the possibility to use part of their funds under shared management through a dedicated compartment in the EU guarantee. The two compartments within each window will share the same InvestEU Fund rules, which will allow a clearer and simpler framework for the use of different sources of EU funds. This means that when blending grants from other programmes like Horizon Europe, InvestEU rules will apply for the entire project, which is a major simplification compared to today.
The Programme will have a single, coherent governance structure and reporting requirements. A single fund will integrate the many different EU-level financial instruments and the subsequent applicable rules that accompany them. Yet, what advantages await the final beneficiaries using a single instrument? Creating one coherent programme benefits from economies of scale, which results in higher investment mobilised per euro spent. It achieves greater risk diversification by undertaking riskier activities and introducing higher risk products to support a wider range of beneficiaries. It has a more integrated governance and is able to mainstream cross-sectorial policies, bringing a multitude of instruments under one single structure. Using a budget guarantee – and not only financial instruments or grants - can help increase the impact of public funds.
The Coronavirus pandemic has been, and still is, a major shock to the global and EU economy. A strong response is needed at the EU level, in particular to bolster the resilience of economic actors. This can only be achieved based on a strong Single Market and a level playing field. It is thus crucial that the economies of Member States hit hardest by the impact of the pandemic benefit from the support of programmes under the EU budget like InvestEU, which will play a key role in supporting the economic recovery from the pandemic.
For more information about the Programme, you can visit the InvestEU website and read the Commission Proposal.
