Jane Hutt AM, Minister for Finance and Government Business
Recent dialogue and a series of investments demonstrate the continued commitment of the European Investment Bank (EIB) to Wales, and the attractive investment destination that Wales represents to the Bank.
The EIB has supported investment in Wales for more than 40 years, making more than £2bn of capital investment over the last decade in a wide range of sectors, including social housing, transport, energy, water and education.
I have led engagement with the bank to examine financing options, including the European Fund for Strategic Investment (EFSI), for a pipeline of Welsh public and private projects. Indeed, as I stated to the Assembly last November, Wales was the first part of the UK, and one of the first countries in the European Union, to host the Bank’s European Investment Advisory Hub (EIAH), bringing together a wider range of public and private project promoters to examine financing opportunities directly with the Bank’s expert advisory services.
Among the government’s own infrastructure priorities – which could be financed through EFSI – the EIB has identified investment in Sections 5 and 6 of the A465 and redevelopment of the Velindre Cancer Centre as being among the foremost investment opportunities in Wales. Hard work continues to develop these propositions. Furthermore, the Bank continues to recognise the potential to invest via EFSI in transformational projects in Wales led by private sponsors, including investment in tidal lagoons and Anglesey Energy Island.
As the Assembly knows, I have raised the profile of a pipeline of additional infrastructure investment opportunities with the EIB too – all of which could in due course attract EFSI financing. The priority at this stage remains to develop robust business cases for each of the propositions and to undertake the necessary due diligence, such that once project finance is required, it can be secured. In addition to the A465 and Velindre schemes above, public projects on the EFSI pipeline include:
- Housing Finance Grant II. This scheme aims to provide an additional 2,000 affordable homes, building on the success of the initial Housing Finance Grant, which has been in operation since 2014-15. The new scheme is expected to be operational in 2017-18.
- 21st Century Schools Band B. This scheme aims to support delivery of projects in Band B of the 21st Century Schools Programme. Band B is expected to be operational in 2019-20.
- Coastal Risk Management Programme. This scheme aims to respond to the flooding and erosion risks our coastal communities face as a result of climate change. It is expected to be operational in 2018-19.
- The Metro. This transformational scheme aims to provide a substantial increase in speed and frequency of public transport right across South Wales, using a combination of, heavy rail, light rail and bus rapid transit, as well as other infrastructure improvements and integrated ticketing. Commercial consultations began in June 2015 and a publicity campaign was launched in November. The European Commission highlighted the merits of the Metro proposition soon after the launch of the EFSI instrument.
- Green Growth Wales. This scheme will promote investment that reduces carbon emissions and creates savings for the public sector. Green Growth Wales aims to support infrastructure projects encompassing renewable generation, resource efficiency, and energy from waste. The project team has already been successful in securing around £1.5m of EIB funding for project development via the ELENA facility – the bank’s broader effort to support the EU’s climate and energy policy objectives.
During my visit to Brussels last week, I met with European Commissioner Thyssen’s Cabinet, where we discussed the prospect of using EFSI finance to support investment in projects that emphasise socio-economic and human capital outcomes. I would certainly encourage project promoters to consider these objectives in the design and delivery of projects where EFSI finance is sought.
EFSI remains one pillar of the wider Investment Plan for Europe (IPE), a key component of which is the European Investment Project Portal (EIPP) – a web portal enabling EU-based project promoters to reach potential investors worldwide. I understand that the EIPP will become operational in April 2016. In advance of its going live, the European Commission is now encouraging project promoters to provide details of their projects via the weblink below, so that potential investors will be greeted with a critical mass of investable schemes as soon as the EIPP is up and running. I will ensure that all projects where the Welsh Government is the project promoter are listed on the EIPP as soon as possible and I would also encourage private project promoters to do the same.
I expect this close collaboration with the EIB to continue. Given the scope for investment in public infrastructure in Wales, it is important that the Government promotes every viable opportunity to the bank, and indeed to other potential investors through the EIPP. Furthermore, it is no less important that private project promoters across Wales take every opportunity to explore the financing options offered by, and via, the bank.