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EU launches instruments to boost investments in start-ups, urban development

Xinhua, July 12, 2016 Adjust font size:

The chief executive body of the European Union, the European Commission, on Monday adopted two new financial instruments for European Structural and Investment (ESI) funds investments, to ease access to funding for young businesses and urban development project promoters.

From 2014, the EU has been encouraging its member states to double their ESI funds investments used through financial instruments, such as loans, equity and guarantees. Financial instruments, compared to grants, attract more private and public resources to complement the initial public funding and can be reinvested over several cycles.

"Financial instruments are an efficient way to invest in new ideas, businesses and in the talent of EU citizens while using less public resources. Their potential to mobilize private capital is huge, and it should be fully exploited when investing the ESI Funds," EU Commissioner in charge of Regional Policy Corina Cretu said.

A co-investment facility, one of new instruments, will provide funding to start-ups and small and medium-size enterprises (SMEs), the European Commission said in a statement.

"This support will enable them to develop their business models and attract additional funding through a collective investment scheme managed by one main financial intermediary," the statement said.

The European Commission estimated that total investment combining public and private resources can amount to up to 15 million euros (16.5 million U.S. dollars) per SME.

The other new instrument -- urban development funds -- will support sustainable urban projects such as public transport, energy efficiency or the regeneration of urban areas, according to the statement.

Through the instrument, total investment combining public and private resources can amount to up to 20 million euros per project, the European Commission said. Endit