France’s energy transition receives third EFSI boost

France’s energy transition has been given a third boost from the Juncker Plan’s investment fund.

Omnes Capital, a private equity fund specialising in financing SMEs, will receive a €50m capital injection from the European Investment Bank (EIB) to support the launch of its third renewable energy fund, Capenergie 3.

It is hoped that this will raise €200m of investment capital by mid-2016 and a total of €1bn in the long term. This will mainly be used in renewable energy production and heating networks.

The project could also create up to 500 new jobs.

“With €100m of capital, we will be able to invest one billion. That is the magic of the European Investment Bank. And this money will not only be used for big projects, but also for smaller ones,” said Omnes Capital representative Serge Savasta.

The European Fund for Strategic Investments (EFSI) has previously invested in two French projects, both of which were related to the energy transition. A total of 14 European projects have received Juncker Plan funding so far, but this latest agreement marks the first time the EFSI has agreed to invest in another fund. According to French Minister for the Economy Emmanuel Macron, this is a welcome development.

“It would be much more efficient to continue in this direction rather than through direct investments. We have no ‘vulture capital’ in Europe, and that is what is lacking,” he said.

‘Vulture funds’ make high risk investments for high returns. Macron believes the Junker Plan should do this as opposed to financing low risk, mature projects.

The EFSI has so far been known for its caution, however; it tends to steer clear of investments that may jeopardise its AAA status.

Together with Horizon 2020, the Juncker Plan aims to invest €30bn in the EU’s innovative SMEs. More than €10bn of this was already available under the framework programme, but according to Brussels, the backing of the EIB gives the Juncker Plan a competitive edge as the bank’s signature offers reassurance to other investors.