During 2020, the European Investment Advisory Hub (EIAH), the advisory arm
of the European Investment Bank (EIB), provided support on the preparation and
implementation of financial instruments
under the InvestEU Programme in Malta for
the next Multiannual Financial Framework (MFF).
Through the technical expertise
of external consultants, the EIAH supported the MDB in identifying those sectoral areas
of the economy that are most deserving of the Bank’s intervention through
financial instruments under
InvestEU, and to propose a set of products
that could potentially be deployed to mitigate these identified market failures. This
exercise was completed in March
2021.
These advisory services were
funded by the EIB and were structured around three major components:
Component 1: The objective
of this component was to identify
the financial instruments implemented
in the 2014-2020 programming
period and provide an indication of their performance. This component aimed to ascertain the degree
of success of the implementation
of the financial instruments as well as map the instruments under
implementation across the
different areas of the economy to avoid duplication
and displacement in the market.
Component 2: The objective
of this component was to conduct a
broad market analysis of the Maltese economy, with the aim of identifying
the specific areas of the economy
that hold the most potential for
MDB’s effective intervention through financial instruments in the next programming period. The
findings of the market analysis
were incorporated into an analytical framework,
that assesses and ranks each subsector against
a predefined set of criteria.
Component 3: The
objectives of this component were (i)
to analyse the selected subsectors further with the aim to gain a stronger view on the current bottlenecks and the type of intervention needed to
mitigate the existing market
failures, and (ii) to propose a set of financial
instruments that could be implemented by MDB
to mitigate the identified gaps within
each of the selected priority subsectors.
Technical
support to develop targeted financial instruments for SMEs and Start-Ups
In 2021, the MDB continued to
collaborate with the European
Commission in terms of the Technical Support Instrument (TSI) which is the
Commission’s instrument to provide
technical support to reforms in EU Member States. The TSI builds on the
success of its predecessor, the
Structural Reform Support Programme (SRSP).
Collaboration under the TSI will
now be focusing on targeted
support to assist the MDB
in achieving its strategic objectives of addressing financing gaps for SMEs and
start-ups.The main deliverables of this assistance will revolve around the design and launch of an equity-based
financial instrument for SMEs and
another financial instrument for start-ups. A detailed gap assessment of the
current offerings for both SMEs and start-ups will be undertaken and benchmarked against international best practices.
This assistance is expected to be completed by
August 2022 and will help positioning the
MDB as a key stakeholder and catalyst for
start-up and SME financing in Malta. Furthermore, it will help the MDB to develop
tailored financial instruments to support SMEs and R&I investment, which are two
important windows under the InvestEU programme.