Mr. Nico Petris:

What Europe is trying to do is use the resources it has in a more efficient manner. It is seeking to do this by leveraging its resources to de-risk projects which, in turn, will attract private sector co-investment. In terms of the mechanics around the cash contributions, the EIB and the Commission are seeking to put in a total of €21 billion, €16 billion of which will come in via guarantees from the Commission and €5 billion will be provided by the EIB using own resources. Some of the media headlines have taken the €21 billion and the end project pipeline of €315 billion and come up with a 15 times leverage, which is considered bonkers. I will try to explain the dynamics of this which, to me, makes more sense. The EIB takes the €21 billion and leverages that internally in order to bring the €21 billion to €60 billion. This is something that banks do all of the time. They issue bonds and they raise their capital and then have more money to invest. The EIB-Commission bucket of investment is in the context of a three-times leverage, €63 billion. What the EIB-Commission are seeking to do is leverage this a further five times with private sector co-investment so as to reach an end total project volume of €315 billion. A five-times leverage is not that unbelievable.