The European Commission Action Plan: An assessment of the reform areas for PRI signatories provides an overview of reforms for PRI signatories. Action 3 focuses on fostering investment in sustainable projects.

Key points

  • The European Commission will take measures to improve the efficiency and impact of instruments aimed at sustainable investment in the EU.
  • These will build on existing EU initiatives to mobilise investment in sustainable infrastructure, including the Investment Plan for Europe. Mobilising capital for infrastructure is a prerequisite for the transition to a low-carbon economy.
  • The European Fund for Strategic Investments (EFSI) has been instrumental in crowding in private finance for sustainable infrastructure, mobilising €265 billion.
  • The EFSI has been extended to 2020 and will have a greater focus on green infrastructure, with 40% of its capital directed to sustainable infrastructure and climate action projects.
  • The EU External Investment Plan will leverage more than €40 billion of investments by 2020 in partner countries, initially in Africa and the EU’s southern and eastern neighbours.
  • For the post-2020 period, the European Commission may establish a single investment fund integrating all EU market-based instruments, including those providing technical assistance.

Comment

Increasing the efficiency and impact of instruments for sustainable investment could help attract significant volumes of capital to sustainable infrastructure.

A single investment fund could support investment priorities and simplify interactions between investors, beneficiaries, the European Commission, the European Investment Bank and commercial banks.

Activities to support project development will include technical and project development assistance, which will likely increase the size of the project pipeline and the number of suitable investments.

We note that increasing the capacity of national and local government to deliver investable projects remains essential. Policy stability and related governance frameworks are also essential to attract available capital towards sustainable assets.

The EU already provides significant de-risking and co-investment vehicles to encourage private investment in sustainable assets. This plan should see these vehicles extended.

Download the full report