Broadband - plans for the Connecting Europe Broadband Fund
The European Commission and the European Investment Bank (EIB) announced their plans to launch the Connecting Europe Broadband Fund.
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This fund, which will lead to an investment platform combining private and public commitments, is announced together with three National Promotional Banks and Institutions (NPBIs) that aim to participate in the initiative as anchor investors: KfW Bankengruppe from Germany, Cassa Depositi e Prestiti from Italy and Caisse des dépôts et consignations from France. The Connecting Europe Broadband Fund will invest in broadband network infrastructure across underserved areas of Europe.
The launch of the investment platform was planned in the Commission's strategy "Connectivity for a Competitive Digital Single Market – Towards a Gigabit Society". It is an important step towards the deployment of the very high-capacity networks that Europe needs for its digital economy and society.
The Connecting Europe Broadband Fund should raise at least €500 million at first closing through commitments from private and public investors, including the EIB and the European Commission. The European Commission will invest €100 million into the Fund from the Connecting Europe Facility. This fund will be open to participation of NPBIs. KfW Bankengruppe, Cassa Depositi e Prestiti and Caisse des dépôts et consignations, the three largest European NPBIs, have already expressed their interest in a possible contribution to the fund as anchor investors at first closing.
The Fund should be the first investment platform to support broadband infrastructure under the EFSI, the heart of the Investment Plan for Europe. The EFSI Regulation facilitates the establishment of investment platforms under the EFSI as a tool to pool investment projects with a thematic or geographic focus. The establishment of this investment platform responds to the growing demand for financing of smaller-scale, higher-risk broadband projects across Europe, which currently do not have access to EU finances. The Fund will be additional to other sources of funding from the market, from other EU instruments, or financing of projects by its anchor investors.
The Connecting Europe Broadband Fund aims to invest in equity and quasi-equity, including mezzanine and subordinated debt, in some 7 to 12 broadband projects each year from 2017 to 2021. The Fund's investments will be of a size between €1 million and €30 million, for projects representing total costs of €150 million or less. Overall, the Fund is expected to unlock additional investments between €1 billion and €1.7 billion in broadband deployment in underserved areas, where very high-capacity networks are not deployed yet. The Fund aims to have invested in 20 countries by 2021.
The operational launch of the Fund is expected to take place mid-2017. Cube Infrastructure Managers S.A., a reputable investment firm with extensive experience in infrastructure and ICT projects, has been selected as the approved applicant to manage the Fund through a public procurement process carried out by the EIB over the summer of 2016. Subject to successful negotiation on the terms, EIB plans to formally appoint the fund manager early next year. 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.
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