The InvestEU Programme: Questions and Answers - Main contents

The InvestEU Programme will bring together under one roof the multitude of EU financial instruments currently available to support investment in the EU, making EU funding for investment projects in Europe simpler, more efficient and more flexible.

The InvestEU Programme consists of the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. It will further boost job creation and support investment and innovation in the EU.

InvestEU will run between 2021 and 2027 and it builds on the success of the Juncker Plan's European Fund for Strategic Investments (EFSI) by providing an EU budget guarantee to support investment and access to finance in the EU. InvestEU aims to trigger €650 billion in additional investment.

The InvestEU Fund will support four policy areas: sustainable infrastructure; research, innovation and digitisation; small and medium-sized businesses; and social investment and skills. InvestEU will also be flexible: it will have the ability to react to market changes and policy priorities that change over time.

The InvestEU Advisory Hub will provide technical support and assistance to help with the preparation, development, structuring and implementation of projects, including capacity building.

The InvestEU Portal will bring together investors and project promoters by providing an easily-accessible and user-friendly database.

See our factsheet: What is the InvestEU Programme?

Why do we need InvestEU?

The investment conditions in Europe have improved since the Investment Plan for Europe, the Juncker Plan, was launched, thanks to structural reforms carried out by the Member States, a more a favourable economic situation and interventions such as the EFSI. However, there is still a sizeable investment gap in Europe. InvestEU will continue to mobilise public and private investment in the EU, addressing market failures and investment gaps that hamper growth and helping to reach EU policy goals such as sustainability, scientific excellence and social inclusion.

How will the InvestEU Fund work?

The InvestEU Fund will mobilise public and private investment through an EU budget guarantee of €38 billion that will back the investment projects of financial partners such as the European Investment Bank (EIB) Group and others, and increase their risk-bearing capacity. The financial partners are expected to contribute at least €9.5 billion in risk-bearing capacity. The guarantee will be provisioned at 40%, meaning that €15.2 billion of the EU budget is set aside in case calls are made on the guarantee.

The InvestEU Fund will be invested through financial partners. The main partner will be the EIB Group which has successfully implemented and managed the EFSI since its launch in 2015. In addition to the EIB Group, international financial institutions active in Europe - such as the European Bank for Reconstruction and Developments (EBRD), the World Bank and the Council of Europe Bank - and national promotional banks, working jointly in groups so that they can cover at least three Member States, will have direct access to the EU guarantee.

The InvestEU Fund will also feature a Member State compartment for each policy area, meaning that Member States may add to the EU guarantee's provisioning by voluntarily channelling up to 5% of their Cohesion Policy Funds to these compartments. Like this, Member States will benefit from the EU guarantee and its high credit rating, giving national and regional investments more firepower.

What's the advantage compared to the status quo, especially for the final beneficiaries?

Creating one coherent programme benefits from economies of scale. It achieves greater risk diversification, 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. In this way we can do more with less.

Under the current set of programmes, final beneficiaries and financial intermediaries often face uncertainty about which instrument is the best for them. They also need to deal with different eligibility, monitoring and reporting requirements under the different programmes.

Under the InvestEU Fund, there will be a single programme with a strong identity and a single set of coherent requirements, which will apply throughout the financing chain to the benefit of final beneficiaries and financial intermediaries. Thanks to its centralised nature, InvestEU will be able to minimise overlaps and ensure synergies both when it comes to financing as well as when providing advisory services. The InvestEU Advisory Hub will integrate different 13 advisory services into a one-stop-shop.

Also, when blending grants from other programmes like Horizon Europe, the Single Market Programme or the Connecting Europe Facility with support from InvestEU, InvestEU rules will apply for the entire project. This is a major simplification compared to today.

The investment approach and diversification of different debt and equity products in one large portfolio brings additional benefits of lower overall need for provisioning as compared to a number of isolated financial instruments, where each individual instrument would need specific provisioning amounts.

What will InvestEU finance?

The InvestEU Fund will be a market-based and demand-driven instrument. However, it will also be policy-focused. By crowding-in private investors, it will help achieve the EU's ambitious goals in terms of sustainability, scientific excellence and social inclusion. Investments will come under four policy areas which represent important policy priorities for the Union and bring high EU added value: sustainable infrastructure; research, innovation and digitisation; small and medium-sized enterprises (SMEs) and small mid-caps; and social investment and skills. The budget guarantee is divided between the policy areas as follows:

Sustainable infrastructure: €11.5 billion

Research, innovation and digitisation: €11.25 billion

SMEs: €11.25 billion

Social investment and skills: €4 billion

These amounts can be adjusted by the Commission by up to 15% in each policy window to adapt to evolving policy priorities and market demand.

See our factsheet InvestEU: what will it finance?

Who will choose the InvestEU projects?

The InvestEU guarantee will be a seal of quality, and it will only be granted after a thorough examination process. Just as for the EFSI guarantee fund, the InvestEU Fund will be managed by the Commission with the support of financial partners for its delivery. An Advisory Board will be set up in order to allow the Commission to consult the financial partners and Member States when preparing and designing new financial products, to follow market developments and to share information.

Commission staff will be responsible for verifying the consistency of the proposed operations with EU law and policies. Only projects passing this check will be passed on for further assessment. After this prior compliance test, a Project Team will ensure a quality check of the due diligence, and fill in a scoreboard of indicators. All implementing partners will be requested to second a number of banking and risk management experts to the Commission for this purpose. These experts will not work on projects submitted by their institution of origin to prevent conflicts of interest.

Finally, an independent Investment Committee, composed of external experts selected in an open process and paid by the EU budget, will approve the use of the EU guarantee for financing and investment operations proposed by the implementing partners, taking their decision on the basis of the due diligence presented by the implementing partner and of the scoreboard prepared by the Project Team. There will be an Investment Committee for each policy area, with some experts sitting in all Committees to ensure consistency.

What will be the InvestEU eligibility criteria?

The eligibility criteria are defined in the Financial Regulation. InvestEU projects must:

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  address market failures or investment gaps and be economically-viable
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  need EU backing in order to get off the ground
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  achieve a multiplier effect and where possible crowd-in private investment
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  help meet EU policy objectives

Why does the EFSI cease to exist? Why not just create an EFSI 3.0?

The EFSI was launched in July 2015 to boost investment and stimulate economic growth and employment in the EU, at a time when Europe was still recovering from the financial and economic crisis. It was originally foreseen to have a short investment period to maximise the impact, until July 2018. Due to its success, EFSI was expanded in size and extended in duration in December 2017. Its investment period now lasts until end-2020, the end of the current Multiannual Financial Framework (MFF). No new investments can be undertaken under EFSI after 2020 but - as with most EU financial instruments - the liabilities run for much longer.

The InvestEU Programme builds on the success of the EFSI, and will continue to create and support jobs across the EU by following the same model.

Is InvestEU taking budget from other financing programmes? What will happen to programmes like COSME and InnovFin?

The InvestEU Fund will bring a large number of financing instruments under one roof with a single, strong brand. The InvestEU Fund will not only capture the objectives of existing instruments such as COSME and InnovFin, but it will be able to boost investments even further thanks the larger scale and efficiencies of the single InvestEU Fund. The four InvestEU Fund policy areas place emphasis on areas of strategic importance for the EU, with €11.25 billion of the guarantee earmarked for small businesses and a further €11.25 billion earmarked for research, innovation and digitisation. The precise internal make-up of the future instruments will be set out in the Investment Guidelines which the Commission will adopt in the form of a delegated act once a political agreement is reached on InvestEU.

Can InvestEU financing be blended with EU grants?

Yes. Blending can be necessary in some situations to underpin investments in order to address particular market failures or investment gaps. The InvestEU Fund can be combined with grants or financial instruments, or both, funded by the centrally managed Union budget or by the EU Emissions Trading System (ETS) Innovation Fund. Such combinations can create advantages for project promoters in sectors such as transport, research and digital. When a project uses EU grants and InvestEU, the InvestEU rules will apply for the entire project. This means a single rulebook and a major simplification.

What will be the risk profile of investments? What type of investments will the InvestEU Fund be targeting compared to today's financial instruments?

The InvestEU Fund will target economically viable projects in areas where there are market failures or investment gaps. The InvestEU Fund instruments will seek to attract commercial financing to a wide range of operations and beneficiaries and will aim to only support projects where financing could not be obtained at all or not at the required terms without InvestEU Fund support. It will also target higher risk projects in specific areas.

In addition, InvestEU places more emphasis on social investment and skills. The allocation for budgetary guarantees and financial instruments in the social sector under the current MFF amounts to €2.2 billion whereas InvestEU allocates €4 billion of the EU guarantee to this policy area, almost doubling what is currently available.

What is the expected multiplier effect for InvestEU? How do you expect to reach €650 billion?

Due to InvestEU targeting higher risk innovation projects and SMEs, as well as the greater focus on EU policy objectives, we expect a slightly more conservative multiplier effect than under EFSI: 13.7 rather than 15.

The €15.2 billion budget earmarked for InvestEU allows the Commission to provide a guarantee of €38 billion, provisioned at 40%. In addition, each financial partner will be expected to contribute some resources to each deal, adding an estimated total of €9.5 billion so the total guarantee will be around €47.5 billion. This in turn will be leveraged by each financial partner, meaning they can lend more than the guarantee amount. Finally, each InvestEU-backed project will attract other private and public investors, as we have seen under the Juncker Plan, and we expect to trigger €650 billion in total investment.

Why is the InvestEU Fund open to other financial partners? Why not work exclusively with the EIB Group, like with the EFSI?

Given its role as the EU's public bank, its capacity to operate in all Member States, and its experience in managing the EFSI, the European Investment Bank (EIB) Group will remain the Commission's main financial partner under InvestEU. In addition, Member States' national and regional promotional banks and other institutions which can offer specific expertise and experience may become financial partners, subject to conditions.

Opening up the possibility to benefit from the EU guarantee to other institutions is driven by the fact that there are other experienced potential financial partners in the EU, which have specific financial or sectorial expertise, enhanced knowledge of their local market or greater capacity to share risk with the EU in some areas. This approach will enlarge and diversify the pipeline of projects and increase the potential pool of final beneficiaries.

The Commission wants to ensure that the beneficiaries of InvestEU can get the best possible support and with easiest access. The InvestEU Fund will therefore be open to other institutions, either multilateral or groups of national institutions jointly covering at least three Member States.

How does a company apply for InvestEU financing?

Project promoters should apply directly to the EIB, to their national or regional promotional banks, or to the national offices of other financial partners such as the EBRD, the World Bank, or the Council of Europe Bank. It is at this stage that the financial partners submit a proposal to the Commission to apply for the EU guarantee. SMEs should continue to apply to their local commercial or public banks whose financial products are covered by the EU guarantee in their country or region. The local intermediary will inform them if a particular financing programme is covered by the InvestEU Fund.

How will the InvestEU Programme ensure geographical balance?

The InvestEU Programme was designed to ensure it benefits all Member States, irrespective of their size or development of their financial market. The access through other financial partners - compared to EFSI - should allow the Fund to better serve local needs and to be complementary to other sources of EU funding under shared management. Technical assistance under the InvestEU Advisory Hub will address the specificities of cohesion countries markets and contribute to build up a project pipeline.

The opening of the guarantee to national and regional promotional banks aims to better understand where the financing needs are and how best to address them. The InvestEU proposal states that at least three countries must be covered by any EU guarantee-backed financial product. This will require national and regional promotional banks to cooperate to develop joint products, which will lead to an international exchange of best practices and expertise.

Finally, the InvestEU Advisory Hub will provide comprehensive project development assistance. It will provide capacity building support to develop organisational capacity and facilitate market-making activities and the collaboration of sectoral actors. The aim is to create the conditions to expand the potential number of eligible recipients in nascent market segments, in particular where the small size of individual projects raises considerably the transaction cost at the project level.

What about State aid control?

State aid rules are essential to ensure effective competition, so that consumers and businesses get fair prices and wider choice in the Single Market. At the same time, in order to match our InvestEU objectives to address market failures and mobilise private investment, it has to be easy to link up Member State money - which may entail State aid and be subject to State aid rules - with EU funds managed centrally by the Commission, which do not constitute State aid.

To further streamline the State aid approval process for such joint funding, the Commission has proposed today to amend one of the Council Regulations governing EU State aid control, which now has to be approved by the Council. If adopted, the proposed extension of this Regulation would allow the Commission to exempt Member State funding that is channelled through the InvestEU Fund or supported by the InvestEU Fund from the requirement to notify such interventions to the Commission prior to their implementation. The funding from Member States would be declared compatible with EU State aid rules, as long as certain clear conditions are fulfilled. The Commission proposal thus ensures that State aid rules can help facilitate a seamless deployment of the InvestEU fund. This continues the spirit of the Juncker Commission, which has already made sure that 97% of state aid can be implemented without any involvement of the Commission.

Who will be accountable for the investments made?

The financial partners in InvestEU will be responsible for the financing and investment operations under the InvestEU Fund since their governing bodies take the final decision on the financing.

The Investment Committee, composed of independent external experts, will approve the use of the EU guarantee under the InvestEU Fund to support those operations ahead of the final decision by the financial partner.

What role will the EP and Council play?

The European Parliament and the Council will decide on the InvestEU Programme in their double capacity as co-legislator and budgetary authority.

They will oversee the implementation of the InvestEU Fund through annual reporting to the budgetary authority and through the discharge procedure.

The Commission also proposes that the implementation of the InvestEU Programme should be evaluated through an interim and a retrospective evaluation. The conclusions of the evaluations will be communicated to the EP and Council so that they can feed into the decision-making process in a timely manner.

How and when will InvestEU be evaluated?

In addition to an annual report, the use of the EU guarantee will be evaluated through an interim evaluation by September 2025 and a final evaluation.

For more information

Press release: EU Budget: InvestEU Programme to support jobs, growth and innovation in Europe

EU budget for the future: https://ec.europa.eu/commission/future-europe/eu-budget-future_en

InvestEU policy package: https://ec.europa.eu/commission/publications/investeu-programme_en

Factsheet: What is InvestEU?

Factsheet: InvestEU - what will it finance?

Proposal for a Regulation establishing the InvestEU Programme

MEMO/18/4010