€50 billion proposed by the Commission to boost the European networks through the Connecting Europe Facility

The European Commission adopted a plan which will fund €50 billion worth of investment to improve Europe's transport, energy and digital networks. This aims at creating jobs and boosting Europe's competitiveness at a time when Europe needs this most. In addition the Commission adopted the terms for the Europe 2020 Project Bond Initiative which will be one of a number of risk-sharing instruments upon which the facility may draw in order to attract private finance in projects.

The plan which will fund €50 billion worth of investment to improve Europe's transport, energy and digital networks has been presented by José Manuel Barroso, President of the Commission. The "Connecting Europe Facility" will finance projects which fill the missing links in Europe's energy, transport and digital backbone. It will also make Europe's economy greener by promoting cleaner transport modes, high speed broadband connections and facilitating the use of renewable energy in line with the Europe 2020 Strategy. In addition the funding for energy networks will further integrate the internal energy market, reduce the EU's energy dependency and bolster the security of supply.

The European Commission also announced that will work closely with the EIB to take advantage of capital market investors' interest in long-term investment opportunities with stable revenues. The Connecting Europe Facility will better mobilise private financing and allow for innovative financial instruments such as guarantees and project bonds to gain maximum leverage from this EU funding injection.

On the other hand, the Europe 2020 Project Bonds Initiative has been also adopted with a double objective: to revive project bond markets and to help the promoters of individual infrastructure projects to attract long-term private sector debt financing. The Project Bond Initiative, which was presented in March 2011, would set up a means to reduce the risk for third party investors seeking long-term investment opportunities. It will thus act as a catalyst to re-open the debt capital market (currently largely unexploited for infrastructure investments following the financial crisis) as a significant source of financing in the infrastructure sector.

The Commission is proposing to launch a pilot phase in the period 2012-2013, still within the current Multiannual Financial Framework. The pilot phase will be based on an amendment of the Trans-European Networks (TEN) Regulation and the Competitiveness and Innovation Framework Programme (CIP) Decision and will draw on the budget lines of these programmes up to a total of €230 million.