Andrea Ferjenčíková, EIB Group Representative in the Czech Republic
Three decades of the EIB Group’s presence in the Czech Republic
With more than EUR 24 billion invested in the national economy since 1992, this year we are celebrating three decades of being one of the most reliable sources of more affordable long-term financing and advisory support for the Czech Republic. Our investments supported almost all key sectors of the Czech economy – transport, energy, urban development and climate action innovation projects. Since the beginning, we are supporting all segments of the local economy, state, regions, and municipal projects, but also corporates, banks, and SMEs. For illustration, almost one third of our financing (EUR 7.2 billion) has been dedicated to supporting small and midsize companies since 1992 – one of the main sources of employment in the country.
At the heart of each of these projects is to make life and business in Czechia more attractive, efficient, and comfortable. To improve the infrastructure in the country, we have financed projects such as a Prague metroconnection between Dejvice and Motol, an upgrade of the Facilities of the Masaryk University in Brno, construction of a pavilion for the central emergency and acute care in Pardubice Hospital, urban renewal in Pilsen, including the construction of a theatre, which prepared the city to host the EU Capital of Culture, or a reconstruction of the School of Pedagogy in Litomyšl, where the Czech EU Presidency has been launched on July 1st this year.
In the last ten years, the EIB has invested EUR 10 billion in the Czech Republic, with EUR 1.8 billion going toward energy upgrades and EUR 1.3 billion going toward national transportation modernization.
We support the Czech economy and its ecosystem also via our investment arm, the European Investment Fund (EIF). Since its inception, EIF has leveraged more than EUR 6 billion of the investments in the country, especially by providing guarantees, equity, and capacity building investment products to deliver financial support for SMEs and midcaps, mainly via venture capital and private equity funds or commercial banks. The EIF began investing in Czechia in 2002 and has since invested nearly EUR 300 million. A great example of this was last year’s investment in I&I Biotech Fund I, one of the first EIF-supported technology transfer funds across all of CEE, to boost the commercialization of scientific research projects and the EU economy’s competitiveness in biomedicine.
Support brought to Czechia undeniably includes our advisory services. We are able to deploy our global know-how in various fields and to offer it in the region’s only advisory form because we are the leading International financial institution having an internal capacity of hundreds of projects and sectoral experts, engineers, and economists who are evaluating the investments from a technical point of view. As a result, the EIB provides technical advice for the project and investment program planning. In addition, the financial advisory aids local financial players or states in creating financial instruments to better combine and blend different sources of funding, such as grants, loans, and equity.
Additionally in Czechia, we collaborate with our clients – typically at no cost – to ensure that they can generate bankable projects efficiently. One of our advisory services, ELENA, which focuses on soliciting investments in energy efficiency, alone developed projects that will draw EUR 126 million in funding for energy efficiency measures just last year. This assistance is being benefited by the Central Bohemian Region, the Ministry of Trade and Investments, and small municipalities via the National Development Bank’s scheme.
European Investment Bank Group – the Investment arm of the European Union
The EIB, as the Bank of the EU, is owned and governed by the EU Member states, the Czech Minister of Finance is the Member of the EIB’s Board of Governors. Another main task of the Bank is to mobilise and crowd in the investments of the private sector, as we know the investment gaps can’t rely on the shoulders of the taxpayer’s money solely. We are an impact-oriented EU institution, and we support investments in the policy areas that are the priority for the EU family. Hereby, we work very closely with the European Commission, which is entrusting us with various mandates, such as the InvestEU, to enable the EIB to diversify its portfolio of clients and to finance and support EU priorities through the assumption of higher risk. We are not policy makers, but policy takers.
Interestingly, our role is to act and support the economies during the crisis, to play an anticyclical role in the economy. There is no need to look that far back in history to see how the EIB Group’s instruments such as the EFSI – European Fund for Strategic Investments under the Juncker plan, helped to boost the economies after the financial crisis 10 years ago, or the EGF – the pan-European Guarantee Fund, created to help businesses get through the crisis and recover from the economic impact of COVID-19.
Aside from the previously mentioned role of the EIF, we have recently established a new branch of the EIB – EIB Global – dedicated to development finance, to support our activities outside the EU.
EIB Group activities in Czechia – supporting the resilience and economic growth of the Czech Republic in times of crisis
Two years of pandemic and war in Ukraine introduced new elements to our priority list, and we had to ensure support for EU economies and health sectors alike. Since the energy and global food crisis emerged as a direct consequence of the Russian invasion, we found ourselves in an even more complex situation with constantly increasing requests for support.
The EU has been hastening its energy transition plans, including through REPowerEU, where we believe the EIB can assist in meeting these objectives while increasing support for renewables, energy efficiency, and energy innovative projects.
In Czechia, we see more requests from partners looking for help to accelerate the preparation of investment portfolios under energy efficiency programs. Our priorities in the country are to ensure SMEs and mid-caps have access to financing, and to support the modernization of the national green and transport sectors, for the benefit of citizens.
Europe as a Task: Czech EU Presidency priorities and the synergies with the EIB Group
To reflect on the historic message which, alongside “Rethink, Rebuild and Repower” has been adopted as the motto of the Czech Presidency, we can only reiterate that as the Investment arm of the EU, the raison d’etre of the EIB has, since its inception over sixty years ago, been to invest not only in assets but in a common and better future, in the European project and in support of EU’s core values across the globe.
Since the beginning of the Czech Presidency, EIB President Werner Hoyer, senior management, and our experts are actively engaging with the Presidency, participating in the discussions at the Informal ministerials devoted to the climate, energy, and economic resilience topics, which clearly signals the readiness of the EIB to play an instrumental role in these files.
Furthermore, alongside our EU partners and the Presidency, our support and solidarity with Ukraine remain strong. Within three weeks of the invasion, we released EUR 668 million to Ukraine, in May we endorsed the EUR 4 billion package to respond to displaced people’s needs in the regions of the EU, including Czechia, and in summer, approved an additional Ukraine Solidarity package of EUR 1.59 billion. The funds will help the Ukrainian government cover priority short-term financing needs, and ensure urgent repairs of damaged roads, bridges, and railway infrastructure. At the Lugano conference, we announced EIB’s offer to set up an EU-Ukraine Gateway Trust Fund that would form part of the wider EU support for Ukraine’s reconstruction, beyond the horizon of urgent short-term needs.
Andrea Ferjenčíková, EIB Group Representative in the Czech Republic
