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European Fund for Strategic Investments (EFSI)


Photographs: © European Union 2014 - European Parliament" (CC BY-NC-ND 2.0 - https://flic.kr/p/pVaFbL & https://flic.kr/p/pfXPUT )

Facing protracted economic downturn in Europe, the European Commission in 2015 launched with great fanfare an Investment Plan for Europe with its financial arm, the European Fund for Strategic Investments (EFSI).

Under the auspices of the European Investment Bank, the EFSI aims to stimulate the European economy and mobilise private investments by providing funding for projects with a higher risk profile than ordinary EIB activities.

Yet although the fund has been tasked specifically with financing, among others, energy efficiency and renewable energy projects and with promoting cohesion, it may not live up to this promise.

There is a risk that, being managed by the EIB, the EFSI either follows standard EIB lending practices or that ‘greener’ EIB loans are shifted to the EFSI category - with very limited additional green finance overall.

 

Assessments after one year of operation

Highlights from the study "Best laid plans. Why the Investment Plan for Europe does not drive the sustainable energy transition".

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An in-depth examination by Bankwatch of the EFSI's operations after one year suggested that cash that should be flowing into projects that boost environmental sustainability is instead fuelling outdated carbon-intensive projects like motorways, airports, and fossil-fuel infrastructure.

An opinion by the European Court of Auditors confirms that evidence for the EFSI's added value is scarce at best, as Reuters reported in November 2016.

Also beneficiaries and national promotional banks were in doubt about the added value of the fund, as an independent report by the consultancy Ernst & Young showed in November. The report also warned that the EFSI may even crowd out existing investments.

 

Background: funding set-up

Based on a guarantee of EUR 16 billion from the EU budget and complemented by a EUR 5 billion allocation of the EIB’s own capital, the EFSI’s investment target is EUR 315 billion until 2018.

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Latest developments


 

Press release | May 16, 2017

Today in Strasburg, the European Parliament lead committees have brought the European Fund for Strategic Investments (EFSI) closer to compliance with the Paris Climate Agreement. However, they have once again fallen short of eliminating fossil fuel subsidies, which stand in the way of climate action.

Blog entry | September 28, 2016

Europe is hemorrhaging cash in deeply unsustainable projects like motorways, airports and gas infrastructure.

Press release | September 28, 2016

Cash that should be flowing into projects that boost environmental sustainability is instead fuelling outdated carbon-intensive projects like motorways, airports, and fossil-fuel infrastructure, according to a new report on Europe’s investment plan released today

Press release | September 15, 2016

What should have been two significant contributions to Europe’s war chest in the fight against climate change will in fact leave the planet short-changed and open the door to even more polluting fossil fuel projects, argue campaigners at Bankwatch, Friends of the Earth Europe and Climate Action Network Europe.

Bankwatch in the media | July 14, 2016

Začiatkom júla začalo Slovensko predsedať Rade Európskej únie. Uprostred politických turbulencií nielen u nás doma, ale aj v Európe sa slovenská vláda rozhodla podporiť zaznamenaniahodné nástroje ekonomickej politiky.

Publications

Briefing | May 5, 2017

There have been a number of irregularities with the planning of the Bratislava D4/R7 project that have stirred public criticism about the imprudent spending of public money. This briefing presents a summary of the facts and allegations that can be seen as corrupt and fraudulent practices which threaten the misuse of the European Bank for Reconstruction and Development's funds and jeopardise the bank’s reputation.

Study | December 19, 2016

In this report, Bankwatch and Counter Balance trace the murky story of the Bratislava bypass, a EUR 1.76 billion project supported by the Slovak government and promoted as the biggest project in central eastern Europe that was guaranteed through the European Fund for Strategic Investments (EFSI).

Briefing | June 8, 2016

The so-called European Fund for Strategic Investments (EFSI) should unlock additional investment of at least EUR 315 billion over a three year period (2015-2017). One of the projects benefiting from the financing concerns the design, construction, operation and maintenance of about 27km of a motorway around Bratislava. The project will come with high costs, will damage biodiversity and likely not solve local transport problems.

Briefing | June 6, 2016

The so-called European Fund for Strategic Investments (EFSI) should unlock additional investment of at least EUR 315 billion over a three year period (2015-2017). One of the projects benefiting from the EU financing is a program that aims to promote energy efficiency in the housing stock through the funding of certain regional/local initiatives supporting energy renovation of private residential buildings in France.