This study focuses on sectors in which financial instruments have been under-utilised in the 2014-2020 programming period. The reasons for this are considered and potential investment opportunities for the 2014-2020 programming period are identified. The report also identifies sectors where new investment opportunities are expected to arise in the future. The report goes on to consider the scope to expand financial instruments in these sectors in the short and medium-term, including in the 2021-2027 programming period.

This is the final report of the study into five sectors that have the potential for greater use of financial instruments in the future being:

The Urban Agenda for the EU aims to provide an integrated and coordinated approach to deal with the urban dimension of EU and national policies / legislation. In the 2021-2027 programming period, a new objective ‘Europe closer to citizens – sustainable and integrated development of urban, rural and coastal areas through local initiatives’ is proposed among the five main policy goals. This Policy Objective will focus on the support of locally led development strategies and sustainable urban development across the EU.

To reach the target of a 32% share of renewable energy in final energy consumption at European Union (EU) level by 2030, the EU needs to increase investment in Renewable Energy. The objectives for renewable energy set out in the ‘Clean Energy for All Europeans’ package require annual investment additional to the current trend of annually EUR 9 billion from private and public sources from 2021 to 2030.

To reach the European Union’s ambitious targets to deliver ultra-fast broadband access of at least 100 Megabits per second (Mbps) to all households and 5G mobile network connectivity to all urban areas by 2025, investments in Information and Communication Technologies (ICT) infrastructure needs to be increased. These objectives require a total investment of EUR 155 billion from private and public sources until 2025.

The Europe 2020 Strategy has a target to invest 3% of the EU’s Gross Domestic Product in research development and innovation (RDI). By end of 2016, EUR 6.7 billion from EU resources had been used to finance innovative enterprises, but the demand for RDI financing in Europe is continuous and there is still significant room for other RDI financing programmes, including with ERDF funding support.

The estimated EU-wide investment needs for water and waste infrastructure amount to about EUR 98 billion annually. Given the current investment levels, the resulting EU-wide investment gap may amount up to EUR 63 billion per year. This points to a need for the Member States to step up their environmental action, and indicates the need for ERDF / CF financial instruments in the sector.

The Public-Private Partnership for the Bratislava bypass ring road called D4R7 is part financed through a Cohesion Fund supported financial instrument which is providing a mezzanine loan into the scheme. The case study also shows how European Structural and Investment Funds financial instruments and European Fund for Strategic Investments resources can be combined at project level.