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Els Boerhof, Manager Micro and Small EnterpriseFund(MASSIF) - FMO - Netherlands
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1European Investment Bank
TBLI Europe 2007
‘Private Equity Approaches to Renewable Energy Infrastructure and the Environment’
Martin Poulsen
Paris, 15th November 2007
2European Investment Bank
Created by the Treaty of Rome in 1958, to provide long-term finance for projects promoting European integration.
Subscribed capital EUR 165bn.EIB shareholders: 27 Member States of the European Union.Lending in 2006: EUR 45.8bn (EUR 39.8bn within the EU25).‘Promoting European Objectives’
EIB – The European Union’s financing institution
3European Investment Bank
The European Investment Fund (EIF)Venture capital & SME guarantees
Established in 1994Owned by:
EIBEuropean Commission Other European financial institutions
Resources: Own funds – subscribed capitalEU programmesTrust operations (EIB, German Government)
2006 figures (signatures):Venture capital funds: EUR 368m (21 funds)Guarantee operations: EUR 1685m (35 operations)
4European Investment Bank
Private equity backed companies create more jobs
PE-backed companies increased employment by 9% p.a., compared to 1% p.a. for Mid-250 companies. 2.8 million people (19%) in the UK private sector work for PE backed companies.
Private equity backed companies outperform:Sales growth 9% p.a. (vs 5% p.a. Mid-250 companies), export growth 6% p.a. (vs 2%) national growth rate, investment by 18% p.a. (vs 1%) national increase
Annual tax contribution of over £26 billion.Typical areas of added value:
financial advice, guidance on strategic matters, management recruitment purposes, access to contacts and market information.
Why Private Equity in addition to Lending?
5European Investment Bank
Seek to encourage investment in funds addressing new or challenging areas.
Driven by financial return
Develop market capacity for new build renewable energy projects
Catalytic effect in attracting other long-term investors into the asset class
Transfer of best practice between markets
The EIB Approach: Objectives
6European Investment Bank
The EIB Approach: Requirements
Identifiable market demand and appropriate sizing
Management team experience and expertise (existing and new funds)
Focus on primary market transactions in eligible sectors and countries
Coherent investment and divestment strategy
Broadly balanced portfolio
No single controlling investor
7European Investment Bank
EIB Infrastructure Fund Portfolio
Infrastructure Fund investment activity commenced early 2005Investments in 5 infrastructure and 2 renewable energy funds:
Emerging Europe Convergence FundDexia South Europe Infrastructure Equity FinanceDutch Infrastructure FundBarclays European Infrastructure FundFin Opi Fondo ItaliaGreen AllianceEnercap Power Fund
Total fund volume EUR1620m, total EIB commitment EUR195m, 29% drawn down at April 2007.Portfolio remains young, performance expected to be positive.
8European Investment Bank
Environment Oriented Fund Concepts
Forestry FundFirst proposals under evaluation
Ecosystems (Biodiversity) FundOverall objective: demonstrate investments in the sector can be financially sustainable
Sectors: agriculture, forestry, non-timber forest products, fisheries and aquaculture, ecotourism.
Target of EUR50m (subject to market study findings)
European focus, enterprises and land-based assets
Associated technical assistance fund
Target 10%+ IRR
9European Investment Bank
Ecosystems Fund - challenges
Market definition challenging
Dealflow unclear
Traditional fund managers do not understand market
Although comparable funds exist, none are European
Further investor support sought!
10European Investment Bank 36
Thank youThank you
European Investment BankEuropean Investment Bankhttp://www.eib.org
Martin PoulsenEnergy / Environment Private Equity Specialist:
Chris KnowlesAssociate Director – Energy & Environment
11European Investment Bank
Environmental Sustainability
Climate change initiatives, sustainable development and social welfareMinimising adverse environmental impact in all projectsDirect loans of EUR 9.6bn in 2006 for:
mitigating climate changepromoting waste management and sustainable use of natural resourcesimproving the urban environmentreducing pollutionprotecting biodiversity
Total loans of EUR 52.9bn 2002-2006
12European Investment Bank
Sustainable, Competitive and Secure Energy
Five priority areas: Renewable energy Energy efficiencyResearch, development and innovationDiversification and security of internal supply (including TEN-E)External energy security and economic development
Loans of EUR 3.3bn in 2006:EUR 0.5bn to renewable energy projectsEUR 0.3bn to TEN-E projects
Total loans of EUR 15.3bn 2002-2006EUR 2.4bn to renewable energy projectsEUR 3.1bn to TEN-E projects
