EU launches new €50 million pilot to develop skills and education across Europe
The European Investment Fund (EIF) and European Commission are launching a new pilot guarantee facility to improve access to finance for individuals and organisations looking to invest in skills and education. The EUR 50 million pilot scheme will support financing for students and learners, enterprises investing in the upskilling of their employees, and organisations supplying education and training.
The Skills & Education Guarantee Pilot (S&E Pilot) is a new debt financing initiative dedicated to stimulating investments in education, training and skills – as part of the solution to get more people into jobs and to respond to the European economy’s changing needs. This initiative is particularly relevant in the difficult economic situation European citizens and enterprises are facing currently due to the coronavirus pandemic. It will support companies and students during, and after, the crisis, to ensure that Europe can develop and stay at the helm of global technological developments, drive its knowledge economy forward and accelerate its economic recovery.
European Commission Vice-President for Promoting our European Way of Life, Margaritis Schinas,said: “With the potential to mobilise €200 million in investments in developing education and skills, the Skills and Education Guarantee Pilot is a stepping stone to more resilient and inclusive societies and economies while the EU recovers from the coronavirus pandemic. It can provide the necessary support to the development of learning opportunities and skills for some of the most critical sectors, such as health, education, security, the digital and the green economy. Opening the financing to learners, businesses and educational organisations will allow as many people and businesses as possible to reap the benefits.”
EIF Chief Executive Alain Godard said: “Investments in skills contribute to growth, competitiveness and social convergence. The new Skills & Education Guarantee Pilot launched today offers students, learners and businesses new options to find the support needed to develop their skillsets and grow, while addressing the challenges linked to digital transformations and the transition to a carbon-free economy. By improving access to education and training opportunities, we can support a workforce that is more adaptable to the changing environments, which is even more crucial now in this time of crisis.”
In its pilot phase, the S&E Pilot will provide an EU guarantee of up to €50 million backed by the European Fund for Strategic Investments (EFSI), triggering debt financing for skills and education projects in Europe, with the aim of mobilising more than €200 million in total financing. Interested financing institutions or providers of education and training can apply to become financial intermediaries and participate in the scheme by responding to the open Call for Expressions of Interest published by the EIF. The selection of financial intermediaries is managed by the EIF.
The EIF will provide a free-of-charge first-loss capped guarantee (or counter-guarantee) to selected financial intermediaries building up new portfolios of debt financing for students and businesses. Eligible students and businesses will be able to access different types of finance (e.g. loans, deferred payments, income-linked loans, etc.) through dedicated financial intermediaries, such as financing institutions, universities, and vocational training centres, guaranteed by the EU. Ultimately, thanks to the guarantee, final beneficiaries will be able to access finance more easily and at better terms.
The initiative will be piloted in 2020 with the objective of becoming a mainstream European financial instrument after 2020, within the next EU multiannual financial framework (2021 – 2027). Capacity building support will also be provided by the European Investment Advisory Hub to help to promote the Pilot.