Jane Hutt, Minister for Finance and Leader of the House
Last week I held a series of meetings at the European Investment Bank (EIB) in Luxembourg. I met with the Vice President, Jonathan Taylor, the Director of Lending Operations in Western Europe, Simon Barnes, the Head of Advisory Services, Tom Barrett and a number of their colleagues
The purpose of my visit was threefold. It was an opportunity to: create the basis for a long term relationship with a potentially significant funding partner; hold discussions around leveraging further EIB investment in Wales, including into public infrastructure projects which could contribute to our Invest for Wales programme; and deliver the message that Wales is playing its part in supporting growth and jobs in the European economy.
I am pleased to report positive outcomes from the high level talks. The EIB is keen to increase its investment in Wales in sound, robust programmes and projects which support EU policy goals to enable sustainable growth and jobs, economic and social cohesion and target environmental sustainability.
We also discussed the potential of utilising EIB investment in Financial Instruments in the new Structural Funds operational programmes. There is a desire, from both sides of the table, to develop more sustainable and innovative ways of using Structural Funds to maximise legacy potential for the coming round. The EIB acknowledged the success of our ongoing investments including the £150m JEREMIE fund which is being jointly financed by the Structural Funds and the EIB and has already invested over £115m in 500 SMEs across Wales. The EIB has also invested £60m in the development of the new campus at Swansea University, complemented by £35m of Structural Funds investment in the development of a new Engineering Manufacturing Centre and Swansea Bay Innovation Hub.
Over the past 5 years there has been approximately 25 billion Euros of investment by the EIB in the UK. Direct investment in Wales in that same period amounts to approximately 1.5% of that figure.
In my discussions with the EIB, I emphasised that in Wales we have comparatively low Private Finance Initiative (PFI) liabilities at around £100m compared to £1bn in Scotland. PFI liabilities in England and Ireland are also significantly greater than in Wales. This lack of exposure to the traditional model of PFI gives us the scope to develop new, innovative, non-dividend financing mechanisms for infrastructure investment that will work for Wales. I made it clear that we are open to opportunities to work with partners like the EIB to develop investment schemes which will deliver significant benefits and public value that would otherwise be unaffordable.
Our next steps are to:
- further develop operational relationships with the EIB to improve visibility of public and private sector investment opportunities in Wales - building on the WIIP Project Pipeline;
- draw down on the advisory services expertise within the EIB to help develop our spending proposals;
- explore further opportunities for the EIB to be engaged with our impending new Structural Funds programmes;
- learn the operational lessons of engaging with the EIB effectively from our opposite numbers in central and local government across the UK.
I will also be formally inviting Jonathan Taylor and other key EIB representatives to Wales in the Spring to hold discussions with the Welsh Government and its partners in the public and private sector.