European funding for
broadband 2014-2020
Contents 1
INTRODUCTION
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EUROPEAN STRUCTURAL AND INVESTMENT FUNDS (ESI FUNDS)
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2.1 European Regional Development Fund (ERDF)
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2.2 European Agricultural Fund for Rural Development (EAFRD)
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EUROPEAN FUND FOR STRATEGIC INVESTMENTS (EFSI)
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CONNECTING EUROPE FACILITY (CEF)
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CONNECTING EUROPE BROADBAND FUND
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TOOLS TO DETECT INVESTMENT OPPORTUNITIES
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Acknowledgements : Authors, Layout : Broadband Competence Offices Support Facility More Information on the European Union is available on : http://ec.europa.eu/broadband The information and views stated in this brochure are those of the authors and do not necessarily reflect the official opinion of the European Union. Neither the European Union institutions and bodies nor any person acting on their behalf may be held responsible for the use which may be made of the information contained therein.
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1
Introduction
Years of crisis have posed a threat to Europe’s potential for innovative growth and competitiveness. At the same time the economy and society of Europe need to make the most of digital evolution. The Commission’s strategy on connectivity for a European Gigabit Society, sets a vision of Europe where availability of very high capacity networks enable the widespread use of products, services and applications in the Digital Single Market. This objective is even more challenging in rural areas and other disadvantaged regions (remote, mountainous or sparsely populated areas) where depopulation and a lack of economic opportunities are higher. Today, broadband projects in the Member States are struggling to find grants and funds for investment. In order to support Member States and private investors, as well as to promote economic growth and opportunities, the European Union has made available financial tools that can boost broadband investment. This guide will help understand the broadband investment tools provided by the European Union. The purpose of all these funds is to invest in job creation and a sustainable and healthy European economy.
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ESI Funds
European Structural and Investment Funds What are ESI Funds ? ESI Funds are the biggest EU public funding source supporting broadband investments. The purpose of the funding is to invest in job creation and a sustainable and healthy European economy and environment. European Structural and Investment Funds (ESI Funds) include five different funds : • the European Regional Development Fund (ERDF) • the European Social Fund (ESF) • the Cohesion Fund (CF) • the European Agricultural Fund for Rural Development (EAFRD) • and the European Maritime and Fisheries Fund (EMFF) throughout 2014-2020. Two funds provide dedicated budgets for broadband rollout: European Regional Development Fund (ERDF) and European Agricultural Fund for Rural Development (EAFRD).
more info : https://ec.europa.eu/info/fundingtenders/european-structural-andinvestment-funds_en
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6.146 million € supporting broadband investments 22 out of the 28 Member States have decided to include broadband investments into their 2014-2020 programmes Austria 26.45 Bulgaria 25.50 Cyprus 19.31 Croatia 203.50 Czech Republic 521.38 Estonia 43.08 Finland 12.60 France 670.08 Germany 371.64 Greece 319.27 Hungary 399.91 Ireland 75.00 Italy 1,161.12 Latvia 43.97 Lithuania 46.81 Poland 1,020.22 Romania 100.00 Slovakia 117.91 Slovenia 57.51 Spain 463.56 Sweden 234.96 UK 212.84 2014 - 2020 Overall EU budget for broadband deployment (MEuro)
2.1
ERDF European Regional Development Fund
What is it ? In the Information and Communications Technology area, ERDF can support extension of broadband deployment and the rollout of high-speed networks, as well as the adoption of emerging technologies and networks for the digital economy. The majority of European Structural Investment funds dedicated to broadband deployment are supported by ERDF. ERDF investments in the Member States have the form of non-refundable grants.
5,2 million € *
Allocated for broadband across 19 of the 28 Member States Who benefits ? ERDF is supporting projects at national/regional level and is managed by the Member States. Countries have different ways to support broadband investment. Funds can support investments from Municipalities, national schemes, Telcos, or associations. more info : http://ec.europa.eu/regional_policy/ en/funding/erdf/
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EAFRD
European Agricultural Fund for Rural Development
What is it ?
Who benefits ?
The EU’s rural policy funded through EAFRD aims to support sustainable development of rural areas. Under the Rural development Priority number 6, EAFRD can finance basic services infrastructure and village renewal in rural areas. Member States have included in their programmes actions aimed to mainly support creation, improvement and expansion of broadband infrastructure, passive broadband infrastructure and provision of access to broadband and public e-government solutions.
ICT related projects can be proposed by a broad kind of public, semi-public and private beneficiaries operating in rural areas. Municipalities, Telco operators or interested in EAFRD support can submit their projects in the context of calls opened by the Managing Authorities in charge of national/regional Rural Development Programmes. Calls not only relate to infrastructure, but can also refer to «soft» complementary actions like training, advisory services, cooperation etc. In total, 47 EAFRD funded programmes include broadband related investments in the 14 Member States. Potential beneficiaries should contact the relevant Managing Authorities.
more than 910 million € *
more info : https://ec.europa.eu/agriculture/ruraldevelopment-2014-2020_en
earmarked for broadband across 14 of the 28 Member States
* The numbers indicated are moving targets that may change over time
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EFSI
European Fund for Strategic Investments
What is it ? A joint initiative launched by the EIB Group- European Investment Bank (EIB), the European Investment Fund (EIF) and the European Commission to help overcome the current investment gap in the EU by mobilizing private financing for strategic investments. Most of these funds will be disbursed in the forms of loans or equity.
Who benefits ?
21 Billion € risk-capital initiative
One of the eligible investment sectors is dedicated to development and deployment of information and communication technologies, notably telecommunications infrastructures of high speed broadband networks. Eligible operations are : • Projects economically and technically sound (including projects with a higher risk profile than ordinary EIB activity)
About 1 B€ has been approved under the EFSI triggering around 3.2 B€ of total EFSI related investments for broadband related projects by April 2017
• Operations contributing to EU objectives • Operations mature and bankable
Disbursed through two windows :
• Projects priced in a manner commensurate with the risk taken
• Infrastructure and Innovation Window - 15.5 B€ deployed by EIB
• Operations located everywhere in the EU, including cross-border projects
• Small and Medium Enterprises Window - 5.5 B€ deployed by EIF
more info : http://www.eib.org/efsi/
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Who can apply for EFSI financing ?
Private sector entities Large corporates, special purpose vehicles or Midcap companies (up to 3.000 employees) can apply for project loans.
Midcap companies or SMEs (less than 250 employees) can apply for : growth finance, intermediate lending from partner financial institutions, EIF’s intermediate equity or guarantee products.
Public sector entities Local authorities, public sector companies or other government-related entities can apply for : • Project loans. • Smaller projects can be financed through intermediate lending.
Banks, national promotional banks and other financial institutions EIB provides loans to financial institutions acting as financial intermediaries to support small investments of SMEs and midcaps or for local authorities.
Financial intermediaries can also apply for EIB portfolio guarantee instruments and EIF products.
Funds and other forms of collective investment vehicles Investments in equity, hybrid or debt funds with a focused investment strategy in eligible sectors, including infrastructure and environment Support through the EIF, in funds focusing on SMEs.
Investment platforms EIB may co-invest or provide co-financing to eligible projects alongside third parties.
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CEF
Connecting Europe Facility What is it ? An instrument to promote the development of high-performing and environmentally sustainable interconnected transport, energy and communications networks across Europe. The main objective is to extend the reach of private investment in areas of market imperfection to stimulate the deployment and modernization of broadband networks and to reduce the need for direct (grant based) public intervention in areas of market failure.
Available budget :
170 million € (15 % of CEF) Who benefits ? • Projects with targets of the Digital Agenda for Europe • Operations with sufficiently mature project development and preparation stages • Operations with effective implementation mechanisms • Operations to address market failures or sub-optimal investment situations • No market distortions or crowding out of private investment • Operations with most suitable technology for the geographic area in question and technological neutrality • Operations with technology best suited for the specific project • Projects with best balance between state of the art technologies • Projects with high potential for replicability and/or be based on innovative business models
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Which are the potential financial instruments ?
Equity instrument
Debt Instrument
Voucher scheme
Connecting Europe Broadband Fund
Joint instrument implemented with the EIB
WIFI4EU Initiative
Investment platform announced with EIB and 3 National Promotional Banks and Institutions
Budget : 100 million €
Type of support : credit enhancement (CEF), loans, guarantees, or contributions to the project bond instruments (EIB) Project promoters (both public and private) can directly apply to the EIB Can be combined with grants (e.g. ESIF)
Budget : 16.48 million €
Established in 2016 Launched in 2017
Established in 2014 Launched in 2015
Applicants : local public authorities (municipalities or groups of municipalities) Simple online application process
Budget : 120 million € EU investment, out of which 40 million € from CEF
First call for projects to be launched in 2017
more info : https://ec.europa.eu/inea/en/connecting-europe-facility
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Connecting Europe Broadband Fund
What is it ? It’s the first investment platform to support broadband infrastructure under the EFSI, set up by the European Commission (EC) and the European Investment Bank (EIB). Its main objective is to bridge the market gaps so that the underserved, less populated or rural European areas develop their broadband network infrastructure. A main objective of the fund is to unlock also additional investment between 1 billion and 1.7 billion EUR. Anchor investors of the fund are : KfW Bankengruppe (DE), Cassa Depositi e Prestiti (IT), Caisse des dépôts et consignations (FR).
500 million € from private and public investors 100 million € from CEF
Open to participation of National Promotional Banks and Institutions (NPBIs)
Implementation between 2017 and 2021 • The Connecting Europe Broadband Fund plans to invest in equity and quasi-equity, including mezzanine and subordinated debt, in some 7-12 broadband projects each year from 2017-2021 • Investments size of 1 million to 30 million EUR for projects representing total costs of maximum 150 million EUR • The funding will be provided also to smaller scale and higher risk broadband projects • Management of the fund : Cube Infrastructure Managers SA • Expected to be launched in 2017 Cube Infrastructure Managers S.A. has been selected as the approved applicant to manage the Fund through a public procurement process carried out by the EIB. The fund manager would identify broadband projects and make investments according to the investment guidelines of the Fund during the whole five-year investment period of the Fund. 10
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Tools to detect investment opportunities
• The European Investment Project Portal (EIPP)
• The European Investment Advisory Hub
The European Investment Project Portal (EIPP) was established by the European Commission in order to provide greater transparency about EU investment opportunities. It is part of the Investment Plan for Europe and is designed to support investment in the real economy. The Portal offers EU based private and public project promoters a convenient way to boost the visibility of their investment projects by simply filling and submitting a project form. EIPP show-cases these projects in a structured user-friendly way and attracts investors worldwide, who are able to reinforce their own pipelines with more European projects.
The European Investment Advisory Hub is Europe’s gateway to support investment. It is a joint initiative by the European Commission and the European Investment Bank under the Investment Plan for Europe. The Hub offers a single access point to a 360 degree offer of advisory and technical assistance services with the aim of strengthening Europe’s investment and business environment. Project promoters, public authorities and private companies can receive technical support to help get their projects off the ground, make them investment-ready, gain advice on suitable funding sources, and access a unique range of technical and financial expertise.
more info : https://ec.europa.eu/eipp/desktop/en/index.html 11
more info : http://www.eib.org/eiah/index.htm
BROADBAND COMPETENCE OFFICES SUPPORT FACILITY The BCO-SF is a European Commission funded project aiming to contribute to the implementation of the EU Digital Agenda targets on broadband roll-out. It provides information and guidance to national and regional stakeholders in charge of broadband deployment. It also aims to promote the setting-up of new BCOs in the Member States. The BCO-SF has started its activities in January 2017, and is working closely with DG Agriculture and Rural Development, DG Communications Networks, Content and Technology and DG for Regional and Urban Policy.
CONTACT US : info@broadbandeurope.eu Rue du Marteau 81, 1000 Brussels, Belgium 0032 (0) 22820918 https://ec.europa.eu/broadband @broadband_eu