EU launches €1.5bn pan-European infra fund

The EU and financial institutions from Spain, Poland, Italy, Germany and France are the founding investors of the fund at €100m each. It will invest in companies that own or operate infrastructure across transport, energy and renewable energy sectors and fulfill the EU’s policy objectives.

The European Union has launched a €1.5 billion equity fund that will invest in transport- and energy-related infrastructure businesses across the continent, according to a statement from the Union’s banking arm.

The fund, nicknamed “Marguerite”, was officially set up last week in Luxembourg after representatives from six EU financial and government institutions each committed €100 million apiece toward the fund, for total seed capital of €600 million.

The founding institutions included the European Investment Bank, France’s Caisse des Dépôts, Italy’s Cassa Depositi e Prestiti, Germany’s KfW, Spain’s Instituto de Crédito Oficial and Poland’s PKO Bank Polski.

The European Investment Bank said in a statement that the fund will aim to serve as a “catalyst” for infrastructure investments that implement key EU policies on climate change, energy security and Trans-European Networks. These include the EU’s goals for its member nations to reduce their greenhouse gas emissions by 20 percent, raise their share of renewable energy consumption to 20 percent, and decrease overall energy use by 20 percent.

The EU has also made it a priority to foster greater transportation, energy and communication network connectivity across its member states to foster economic growth, often referred to as “Trans-European Networks”.

Within these policy goals, the fund will provide equity or “quasi equity” to companies which own or operate infrastructure across transport, energy and renewable energy sectors. The goal will be to provide them with capital for greenfield, or new construction projects, according to the statement.

A separate debt co-financing pool of up to €5 billion will also be created, the statement said, to provide Marguerite with a source of debt for the projects that it invests in.

An advisory team for the fund is currently being selected, the statement said, and is expected to begin work in the first quarter of 2010.

Fundraising is ongoing and a first closing is expected by 3 March, 2010. A final closing is scheduled for 2011.