EFSI and Investment Platforms: state of playCDP & EIF initiatives: 2i per l’impresa, ENSI, Equity Platform, CEBF

Bruxelles, 26 September 2016

CDP: Mission and Ownership

CDP is a joint-stock company under public control:

• 80.1% owned by the Italian Government

• 18.4% held by 64 Bank Foundations

• 1.5% of treasury shares80.10%

18.40%

1.50%

MEF

BANKINGFOUNDATIONS

CDP is the National Promotional Institution supporting Italy’s growth by:

• Promoting Italy with a particular focus on social and sustainable growth• Investing in long-term projects as a “market operator”• Leveraging domestic and international financial resources, as a complement to the

banking system• Offering a timely response to market limits with a systemic and countercyclical role

Leader in financing Local Authorities and PA

Joint-stock companyunder public control

(financing the Country’s

infrastructures)

Key player in supporting SMEs,project finance,export finance,

social housing, equity

NPI - National Promotional Institution

2003

1850

2009

2015

Postal savings services were created with law n° 2779 of 27 May 1875 «…under State guarantee within Cassa Depositi e Prestiti.»

Use of Cassa funds Art. 16

CDP funds will be used for loans to Divisions, Provinces, Towns and Cities, and

Charity Institutions for the realization of public works and their debt resolution.

ex Com. CE 22.07.2015 ex Legge di Stabilità

Working together for Growth and Jobs:the role of National Promotional Banks and Institutions

supporting the Investment Plan

CDP: an evolving role

The challenges of the new business plan

Funding

Priority Areas of development

Business Volumes (2016-2020) €/bn

Infrastracture

Enterprises

Real estate

Business Volumes (2011-2015) €/bn

~13+22%

~15

~20

~24

+23%

~117

+73%~67

~2+100% ~4

102 160

Catalyzing national and European private and public resources; strenghtening national

connection

Total Volumes

Passbook SavingAccounts

Postal SavingBonds

Enhancingdomestic savings

to support the real economy

Othersources

National, Europeanand International Investors

Government e Local Administrations

EFSIEIB Group –NPIs cooperation

EFSI - Investment Plan for Europe - State of play

EFSI in Italy (EUR 2.8 bn)

Infrastructure and Innovation Window: 13 projects > 1,8 bn > 5,7 bn (3,800 jobs)SMEs Window: 30 agreements > 983 ml > 8,1 ml (59,000 SMEs)

NPIs

The Investment Plan has promoted the

cooperation between the EIB Group

and European National Promotional

Institutions, among which Cassa

Depositi e Prestiti …

CDP & EIF together for SMEs

SYSTEM APPROACH, anti-cyclical in response to market gaps

COMPLEMENTARY to financial system channeling domestic and international resources

SUSTAINABILITY: Investment logic as «market operator»

Creating value for TERRITORY and attention to social issues and sustainable growth

… also considering the key role of investments

platforms designed to catalyse resources from

the private sector with the aim of aggregating

projects, reducing costs and more effectively

distributing the risk among investors.

PROMOTIONAL institution with long-term view

Definition of National Promotional Bank and Institution

(NPBI)

NPBIs are defined as legal entities carrying out financial activities on a

professional basis which are given a mandate by a Member State or a

Member State’s entity at central, regional or local level, to carry out

development or promotional activities.

This definition comprises BPBIs in very different forms, distinctive promotional

products being offered according to country-specific needs.

NPBI

EIB – NPI cooperation under EFSIInvestment Platforms (IP)

Investment Platform (IP) is a tool for pooling investment projectswith a thematic or geographic focus.

Key topics:

• EIB Group-NPI cooperation is important for the success of EFSI.

• NPIs have products offering which are complementary to EIBproducts and to existing financing alternatives.

• NPIs have important geographical reach.

• NPIs can participate in Investment Platforms as: Sponsors,Investors, Implementing entities.

• EIB will apply to IPs its rules, policies and procedures as appliedfor its own risk operations.

• IPs to focus on market failures and crowding in:• Provide financing or support to sectors not currently sufficiently

serviced by traditional financial intermediaries.

• Facilitating inclusion (crowding-in) of investors towards the financing ofprojects and sectors.

• IPs are co-investment arrangements structured to catalyze

investments in a portfolio of projects with a thematic or

geographic focus.

• IPs are a means to:

• Aggregate investment projects

• Reduce transaction and information costs

• Provide more efficient risk allocation between investors

• Structural definition of IP:

• Special purpose vehicles

• Managed accounts

• Contract-based co-financing or risk-sharing arrangements

• Other structural arrangements

EIB – NPI cooperation under EFSI IP

• Characteristics of EIB-NPI ESFI Investment Platforms:

• Combine resources from EIB, NPIs, inst. investors & swf

• IPs can benefit from EFSI financing under ‘Infrastructure and

Innovation’ and ‘SME’ windows

• Geographic Scope

• National / Multi-country / Regional / Multi-regional focus

• Thematic Scope

• Mono-sector / Multi-sector focus

• IP Product offering:

• Equity or quasi equity investment in projects or funds

• Loans or guarantees to projects

• Guarantees or counter-guarantees to intermediaries

EIB – NPI cooperation under EFSI IP

Extension of EFSI (EFSI 2.0)

EC Proposal (14.09.2016) to extend EFSI until 31.12.2020, increasing theoverall target to at least EUR 500 ml (EUR 630 ml by 2022).

Key topics:

• EU guarantee to EFSI increased from EUR 16bn to 26bn; Guarantee Fund’sprovisioning up to 35%. EIB contribution from EUR 5bn to EUR 7.5bn.The guarantee fund increased by EUR 1.1bn reaching EUR 9.1bn (EUR 500ml byCEF, EUR 450ml by EFSI income, EUR 150ml from unallocated margin).

• Scaling-up of the SME Window, extremely successful and running out ofresources in EFSI 1.0

• Enhancement of the European Investment Advisory Hub (EIAH)

• Priority to projects that support COP21 objectives and to cross-borderinfrastructure projects.

• Reinforcement of additionality of projects under EFSI, criticized as ambiguous inEFSI 1.0

• Take-off of EFSI in less developed regions and transition regions, alsocombining European Structural and Investment Funds (ESI).

• Exclusion of motorways (unless in cohesion countries), inclusion of agriculture,fishery and aquaculture as eligible sectors under EFSI.

• Increased transparency (IC to explain its decisions, accessible; publication of thescoreboard of indicators).

CDP-EIB/EIF cooperation under EFSISome first initiatives:

• 2i per l’impresa• ENSI• Equity Platform• CEBF

Before|Threescenarios,threedifferent products

Medium to long-term funding

+Guarantees covering 50% of the business risk under COSME and InnoVFin

(*) target InnovFin: PMI (definizione comunitaria) e Small Mid-Cap (num. dipendenti < 500) «innovative»;target Cosme: PMI (definizione comunitaria)

The first «Juncker» productof CDP Group for SMEs

Now|2iperl’impresa:Threescenarios,one single product

Gar

anzi

aP

rovv

ista

Con

trog

aran

zia

=

6

Guarantees up to 50% for financing of SMEs’ internationalisation

+

Funding at«zero

weighting»

Bank creditistransfer

Financing

SMEs andSmall MID-

CAPsGuarantee at«zero

weighting»

Couter-guarantee(InnovFin/Cosme)

Gar

anzi

aP

rovv

ista

Con

trog

aran

zia

Agreements

2i per l’impresa

BANKSSMEs

Platform

CDP funding at“zero weighting” supported by a SACE guarantee, issued

at a lower cost of almost 15-20 bps compared to the ordinary one.

SACE guarantee up to 80%, issued on a loan-by-loan basis (no

portfolio) and granted upon eligible criteria of SACE and EIF

FEI counter-guarantee at 50% supporting SACE

guarantee and backed under Cosme e InnovFin of the Juncker Plan (SME Window)

InnovFin CDP Group provides guarantees on bank loans to innovative companies: EUR 600 ml - 300 SMEs

COSME agreement: EUR 400 ml – 500 companies

Commercial «Bundle»

Scheme

7

Expected benefits

+ +

Per maggiori informazioni:

Without 2iperl’impresa

Percentagecovered

Usually 50% 80% for InnovFinUp to 70% for Cosme

Maximumamount of financing

Up to €5,0 mln Up to € 7,5 mln for InnovFinUp to € 5 mln for Cosme

Security costs Dependent on the rating of the beneficiary and the tenor mortgage

On average lower thanks to EIF counter-guarantees

And more for the bank…

CDP Funding cost Usually, the funding at«zero weighting»covers for 50% of the financingissued by SACE

Possibility of profiting from alower cost for the quotaguaranteed by SACE

Administrativeburden and operating risks

Reporting burdens and due diligence on the requirements thatthe firms have to respect and fulfill with SACE

EIF and NPIs Securitisation Initiative (ENSI)

ENSI is an network of NPIs and EIF to stimulate SME lending via the capital markets.

EIF& CDP in the Joint Securitisation Initiative

Joint activities (investments & guarantees) in order toenanche SMEs financing in securitisation transactions.

Harmonised and efficient cooperation with streamlinedprocedures and eligibility criteria

ENSI: cooperation between the EIF and the National Promotional Institutions (NPIs) to stimulate SME

lending via capital markets

Tranche Investors

Private investors

NPIs / EIF / EIB

Public funds

Private investorsor public funds

ENSI - EIF NPIs Securitization Initiative

Privateinvestors

NPIs / EIF/ EIB

Senior

Mezzanine

EquityJunior

Funding, capital relief, reduction of portfolio concentration to financial intermediaries that can

receives these benefits against a committment to extend new SME lending

Further informations:http://www.eif.org/what_we_do/guarantees/ENSI/index.htm

Platform products: mainly “true sale” securitisation and

potentially “synthetic securitisations” (“loan portfolio tranched

cover”)

Risk appetite: senior and mezzanine tranches

Objective: to channel more funding resources to the European

SMEs by means of increasing funding to the financial

intermediaries and potentially helping them lower capital

requirements and reduce portfolio concentrations

Requirement: originators commit to provide new lending to

SMEs

Simplified access to joint support measures of European

NPIs and EIF with the lowest possible bureaucratic burden

ENSI implementation

The European Commission envisages the allocation of EU

funds under mezzanine tranches under EFSI SME Window

ENSI is a framework for EIF and the NPIs to co-invest in securitisation transactions. The investment

may take the form of the purchase of notes issued in a cash transaction or the guarantee (counter-

guarantee) of payments on such notes.

Partnering with national and regional promotional institutions active across the EU

Member States to promote best practices in policy-driven equity investments and

further enhance access to funding for SMEs and Midcaps.

• Objectives: share of information and best practices; improve access to VC funding

in the EU; avoid dublication of tasks; share investment/pipeline opportunities;

promote common practices and standards.

• Target EU value added investments / sectors

• Crowd-in private sector, critical mass for European VC

• Cooperation with NPIs through mutual reliance to achieve:

• Increased geographic reach

• Enhanced speed

• Reduced operational complexity

• Harmonised standards and processes

• Simplified access to finance

• Combine investment capacity

• Products to complement NPIs’ current activitites

EIF-NPI Equity Platform

Further informations:http://www.eif.europa.eu/what_we_do/equity/NPI/index.htm

DECISION-MAKING

• EIF as Platform Manager

• EIF holds sole responsibility / liability vis-à-vis the EU of the operations and investments of the Platform

• EIF Equity Investments may delegate part of the Due Diligence and Monitoring to NPI(s) better equipped to carry out such duties

• EIF Risk Management and EIF Compliance to form independent opinions on DD results

• EIF Board to approve of deal based on EIF DD (potentially together with NPI), and EIF Risk and Compliance opinions

• Each NPI retains sole responsibility / liability and decision making power of individual (participation in) Platform investments

• Possibilities for mutual reliance

• For EIF, this means that at a minimum, EIF Risk Management will have to provide an independent opinion on each investment, and EIF Board take decisions

Organs of the Platform:

NPII

apply

online

The General Forum

• Meets typically once per year

• Strategy and policy focused

• Recommendationsto CF

• Broad NPI participation with EC and EIF

The Consultative Forum

• Meets regularly• Operational and

techincal focus withemphasis on best practice, possible cooperation and investment activities

• Policy and Market gap assessment

• Standards and methodologies

# Investment decisionsremain with EFI / NPI

EIF checks admission criteriaForum elects Consultative Forum, annually

Outcome /

Objective of the

Platform

Main Objectives:• Framework for EFSI

SMEW Equity co-investments

• Crowd-in private sector

Additional Objectives:• Framework for non-

EFSI co-investments • Harmonised

standards • Shared practices• Coordination of

EU/national/regional investment pipelines

• Collaboration on investment and/or other ad hoc projects

The Secretariat(held by EIF)

EIF-NPI COOPERATION: EQUITY PLATFORM

Connecting Europe Broadband Fund (CEBF)EU Investment Platform for broadband projects

• Large telecom operators investments, public subsidies are available,

but… remain an important investments needs in the less dense areas,

which generally show lower returns on investment than urban areas,

but, at the same time, are not eligible for subsidies dedicated to non-

profitable rural areas only.

• To address this investment challenge in less dense areas, the EC

together with EIB propose to set up a new commercial fund of a target

size of EUR 500 million.

• NPBIs have also been actively involved in the initiative.

• The funds coming from the Connecting Europe Facility (CEF), EFSI and

the EIB, together with capital from NPBIs and the private sector, will be

invested into economically viable broadband projects. The scarcity

of financing solutions is particularly pronounced for smaller projects.

Connecting Europe Broadband Fund (CEBF)

• Market assessment:- An Investment opportunity of €34bn in EEA countries;

- Strong pipeline in IT, FR and DE;

- Equity and quasi-equity financing;

- Medium risk range of eligible projects;

- Public support to trigger further investment;

- No standard PPP formula.

• Initiative requires attracting an experienced fund manager, with astrong track record in financing infrastructure and ICT projects, and withthe ability to work across several EU countries. The EuropeanInvestment Bank (EIB) published a call for expression of interest for afund manager, who will be responsible for managing this EUR 500 millioninvestment fund for broadband projects.

• After the selection of a fund manager, the EIB will prepare for the launch of the fund, expected by the end of 2016.

Investment strategy of the Fund (CEBF)

Eligible projects according to the legal base of ConnectingEurope Facility (CEF), i.e. broadband projects contributingsignificantly to the achievement of the targets of the DigitalAgenda for Europe: at least 30 mbps connections, with prioritygiven to projects contributing to speeds of 1000 mbps and EFSI.

Specific focus on less dense areas (white and grey areas).

Investment size: max. EUR 30 mln (indicative average EUR 10mln, min EUR 1mln,).

The fund would need to be additional to other sources offunding either from the market or from other EU instruments.

Objectives: Geographic diversification (minimum 12 countries,target 20 countries), portfolio diversification and high broadbandspeeds.

European Investment Advisory Hub (EIAH)

Project promoters Public authorities Member States Private sector

DEMAND

Project support throughoutthe project cycle

Support to Financial instruments

Enhance access to finance

Existing advisory programmes and activities

European Investment Advisory Hub

New investment support alsoin areas relevant to the scope of EFSI (could be delivered by EIB advisory or operational teams)

Identification of needs as they arise

Network of institutions incl. EIB Group, EuropeanCommission , National Promotional Banks and Institutions, etc.

Integrated collaboration model

Additional advisory and technical assistance

EIAH’s partner institutions’ expertise

SUPPLY

Web content + Web portal + Support team

Acc

ess

po

int

Del

iver

y ch

ann

els

26

Building the EIAH Partner Network

MoU signatures as of today

MoUs to be signed

NRWB Germany

PMV Belgium

KfW Germany

SFPI Belgium

NIAThe

Netherlands

Signed MoUs

SID Bank Slovenia

Altum Latvia

MFB Hungary

BDB Bulgaria

HBOR Croatia

SBCI Ireland

CMZRB Czech Republic

AWS Austria

SZRB AM Slovakia

BPI France France

CDC France

BGK Poland

Invega Lithuania

Almi Sweden

VIPA Lithuania

ZBP Poland

ICO Spain

CDP Italy

UIC -

Situation as at 31.08.2016

Thank you for your attention

riccardo.honoratibianchi@cdp.it

The document and its contents are for information and illustration purposes only. The current document is not intended to be exhaustive and its contents may not be necessarily interpreted as an official position of CDP or of any other Institutions and entity mentioned in the document. The information and data contained in this document do not constitute a commitment and are subject to modification.