The business of the infrastructure group at the European Investment Fund is to invest in funds that invest in newly built assets, which are also called greenfield assets, explained Gabriele Todesca, head of infrastructure at the EIF, during an interview with Paperjam on 5 February 2025. “Our investors, our stakeholders, have policy objectives in mind, and they want to see precisely the development of new assets in certain key strategic areas.”
One of these key areas is in energy infrastructure. It accounts for “a bit more than 50%” of its assets. It encompasses renewable generation, renewable energy storage, transmission and energy efficiency. “Zero investments in fuel assets. We cannot invest in fossil fuels.” Despite being seen as part of the energy transition in some countries, the EIF does not even invest into natural gas infrastructures.
The other key strategic areas are transport infrastructure, digital infrastructure and “a bit” of social infrastructure.
EIF investment mostly in funds holding equity positions of projects but also some junior debts. Investment in senior debt occurs on a “very small scale” because its parent company, the European Investment Bank, “does a lot of direct lending” to senior direct lending projects.
State of the industry and trends
Despite some backpedalling by the US and some European countries, “there’s still a strong commitment” to the energy sector to support the green transition in Europe. Additionally, Todesca thinks that the pushbacks from “some parts of the political spectrum” on the green transition has been partially offset by the renewed push for energy security.
Todesca thinks that the green transition and the energy security objectives “complement each other.” He explained that, since the Russian invasion of Ukraine, “it has become clear that Europe needs to become self-sufficient and independent from an energy perspective, which we are not yet.” He added: “the objectives are pretty clear… It’s about not depending on third countries for our energy.”
Greenfield means new capex rather than simply buying something that is already up and running, not touching it and simply running it
Contrary to Canada, for instance, which has “massive” fossil fuel resources, Todesca commented that Europe must go through the green transition. Power is currently coming mainly from renewables but “if you want to become self-sufficient, you have to develop your renewable infrastructure… so I think the policy support for this industry will not change… power generation remains a priority.”
Shift toward energy efficiency
Yet Todesca noted a shift from producing more power towards wasting less power by using power more smartly and efficiently. He explained that the EIF has large investments in solar and wind. It will continue to invest in power generation. In addition, the new focus means that the fund now invests in energy storage, batteries, transmission, grid interconnectors and energy efficiency.
Todesca remarked that energy efficiency takes several forms. For instance, it could be a city district, or a town deciding to improve the efficiency of public lighting or support the renovation of a hospital to make it more energy efficient. “People don’t realise how much electricity we waste.” Paperjam pointed out that renovating a hospital is not like building a new asset, and Todesca argued that the renovation required new capex such as electrical systems, new lighting systems, smart meters, etc. “Greenfield means new capex rather than simply buying something that is already up and running, not touching it and simply running it.”
Solving transmission bottlenecks
On challenges related to the connection of newly built power generation assets to the transmission grid, the EIF’s head of infrastructure noted that electricity regulations must play their part. However, he refrained from commenting further, apart from stating that the EIF invests in quality assets. He remarked that “we cannot achieve a perfect integration of electricity markets just through investment.”
Trains, planes and ships for the sustainable age
Todesca explained that the EIF is not involved in traditional rail transport, but he noted that there are some “interesting projects,” such as dual engines using diesel and sustainable fuels (hydrogen). On electric trains, he noted that they can run only on some parts of the railway network. “It's mostly for densely populated urban areas.”
Elsewhere, Todesca commented that the EIF is looking at sustainable aviation and sustainable maritime transportation, which also includes ship refitting with hybrid engines using traditional and sustainable fuels.
Sectors that will likely suffer
“All the stuff that we invest in is growing,” stressed Todesca. He thinks that there is less support from the market on infrastructure related to airports, fossil fuels and road infrastructure, and that this can be observed in their more limited growth.
An alternative version of this article was written for the to the , published on 26 February 2025. The content of the magazine is produced exclusively for the magazine. It is published on the website as a contribution to the complete Paperjam archive. Click here to subscribe to the magazine.
Is your company a member of the Paperjam Business Club? You can request a subscription in your name. Let us know via [email protected].