The InvestEU programme has inched closer to becoming reality following approval, last month, by a large majority of Members of the European Parliament. With €26 billion set aside in the EU budget as a guarantee, InvestEU is expected to mobilise €400 billion in investments across the European Union from 2021 to 2027.

The new programme is part of the €750 billion Next Generation EU recovery package, and will target four policy windows: the Sustainable Infrastructure Window with a budgetary guarantee of €9.9 billion; the Research Innovation and Digitisation Window with €6.6 billion; the SME Window with a fund of €6.9 billion; and the Social Infrastructure and Skills Window with a dedicated budget of €2.8 billion. Strategic investments will be possible under all four windows, to cover areas of European strategic importance. MEPs made sure that InvestEU contributes to achieving the target of spending at least 30% of EU funds on climate objectives by 2027 and that it provides support for SMEs negatively affected by the pandemic and at risk of insolvency.

The concept of propping up recovery through the provision of guarantees builds on the successful model of the Investment Plan for Europe, the Juncker Plan, which mobilised more than €500 billion in the period 2015-20. That plan had been conceived in 2014, when Europe was emerging from the worst financial crisis since the Great Depression. 

This has allowed Member States to provide millions of euro in guarantees through the European Investment Bank, using public funds to mobilise additional private investment and giving credit protection to the financing provided by the EIB and the European Investment Fund.

The guarantee available under the InvestEU Fund will be implemented via selected financial institutions, known as implementing partners. The main partner is the EIB Group, which amongst other funds, has successfully implemented and managed the European Fund for Strategic Investments since its launch in 2015, and will be responsible to implement 75% of the EU guarantee under InvestEU.

For the first time, the EU guarantee is also open to national promotional banks and international financial institutions, such as the European Bank for Reconstruction and Development (EBRD), the Council of Europe Development Bank (CEB) and the Nordic Investment Bank (NIB), as long as they become an entrusted entity on the basis of EU Budget rules.

As Malta’s only national promotional bank, the Malta Development Bank (MDB), has initiated the process to be entrusted as an implementing partner of the InvestEU. Eligible applicants must complete a screening process, known as a Pillar Assessment, to ensure EU funds are properly managed. 

With direct access to Invest EU, implementing partners are better placed to roll out and implement EU market-based financial instruments, tailored to specific local circumstances and targeting national priorities. 

The MDB is therefore committed to gear up in order to be in a position to possibly act as one of the implementing partners of the EU budget. Over the past months the Bank has invested significantly in capacity building and training, even with the support of European partners, including institutions and other promotional banks to ready itself for this important process.

MDB CEO Rene Saliba explained: “InvestEU will be a fundamental tool in supporting Malta’s economic recovery and transformation over the next years, allowing the implementation of projects which reflect the country’s priorities, such as the environmental and digital transition. The Bank has gained significant experience in its first years of existence in offering a number of financial instruments that address market gaps in Malta. We are now readying ourselves to be in a position to mobilise guarantees under Invest EU and to strengthen the Bank’s role as an enabler of growth”.

Saliba added that besides preparing itself for this new role, the MDB is already working to identify how best to use such guarantees to provide a strong and innovative stimulus in the upcoming recovery. For this reason, he stated that, “the Bank is looking at potential initiatives, analysing market developments and originating new ideas.” 

This article is part of a content series called Ewropej. This is a multi-newsroom initiative part-funded by the European Parliament to bring the work of the EP closer to the citizens of Malta and keep them informed about matters that affect their daily lives. This article reflects only the author’s view. The European Parliament is not responsible for any use that may be made of the information it contains.

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