EC and EIB launch €420 billion broadband infrastructure fund
The European Commission (EC) and the European Investment Bank (EIB), together with KfW, Cassa depositi e prestiti and Caisse des Dépôts, have pooled €420 million for the Connecting Europe Broadband Fund.
The fund is the first of its kind fully dedicated to financing broadband network infrastructure across underserved areas in Europe. The Connecting Europe Broadband Fund is managed by Cube Infrastructure Managers and aims to generate €500 million for broadband investments in order to facilitate at least €1 billion in investment over five years.
In breakdown of the pledged €420 million which are due to close over the next 18 months:
EIB will invest €140 million (out of which €100 million is backed by the European Fund for Strategic Investments - EFSI)
The European Commission, via the Connecting Europe Facility, will invest €100 million;
KfW, a German government-owned development bank, will invest €50 million
Cassa Depositi e Prestiti, a Italian investment bank, will invest €50 million
Caisse des Dépôts, a French public sector financial institution, will invest €50 million
Cube Infrastructure Managers, an independent Luxembourgian management company focusing on investments in the European infrastructure space, will invest at least €5 million;
As well as an additional €25 million will be contributed by other European private investors.
The Fund was set up to meet the growing demand for financing of smaller-scale broadband projects across Europe. The fund will support existing EU financial instruments for broadband development as well as other financing currently available on the market through private investors or private financial institutions. The Connecting Europe Broadband Fund works toward the EC’s Investment Plan for Europe and is open to the participation of private investors.
During a five-year investment period, the fund aims to invest equity and quasi-equity in economically and technically viable broadband projects that are in line with the European targets to provide by 2025 internet connections with download/upload speeds of 1Gbps to all schools, transport hubs, enterprise and main providers of public services.
Any investments by the fund will not exceed €30 million for a single project and it is expected tha the fund will encourage additional investments of between €1 billion and €1.7 billion.