Innovative financial instruments for EU policies

29-08-2013

Unlike pure grants, innovative financial instruments (IFIs) are EU budget tools that trigger equity or debt funding, for example in the form of investments in share capital, loans or guarantees. Financial institutions and intermediaries are often involved in their implementation on behalf of the European Commission (EC). IFIs are not deemed to fit all kinds of public spending, but have features that make them attractive. Notably, they are expected to increase the impact of the EU budget by leveraging additional funding from other sources. In addition, IFIs generate income through amounts repaid by beneficiaries of funding that can be used for new operations in line with the same policy objectives.

Unlike pure grants, innovative financial instruments (IFIs) are EU budget tools that trigger equity or debt funding, for example in the form of investments in share capital, loans or guarantees. Financial institutions and intermediaries are often involved in their implementation on behalf of the European Commission (EC). IFIs are not deemed to fit all kinds of public spending, but have features that make them attractive. Notably, they are expected to increase the impact of the EU budget by leveraging additional funding from other sources. In addition, IFIs generate income through amounts repaid by beneficiaries of funding that can be used for new operations in line with the same policy objectives.