EU financiers launch infrastructure fund

(BRUSSELS) - Major European public financial institutions launched a pan-European equity fund on Friday to boost key EU policies in areas such as climate change, energy security and transport networks.

The "Marguerite Fund" -- a pan-European equity fund -- was launched with initial capital of 600 million euros (900 million dollars) by the European Investment banks and five national public investors.

These include France's Caisse des Depots and Germany's KfW Bankengruppe.

Marguerite, the first joint initiative of Europe's leading public financial institutions, is one of the biggest fund raising exercises in 2009 in Europe, with a target total of 1.5 billion euros by the end of 2011.

The fund "will provide equity or quasi equity to companies which own or operate infrastructure in the sectors of transport and energy," the sponsors said in a join statement.

"The investors in the fund and other long term credit institutions, intend to establish a debt co-financing Initiative.

The fund, which has also received the support of the European Commission since the idea was first floated last year by the Italians, "should serve as a model for the establishment of other similar funds in the EU wishing to combine a market-based principle of return to investors with the pursuit of public policy objectives," the investors said.

As well as the EIB, French and German investors, the fund was also launched by Italy's Cassa depositi e prestiti, Spanish public bank Insitituto de crédito oficial and the Powszechna Kasa oszczednosci bank polski, in which the Polish state has a majority share.

The six pioneers, which provide 100 million euros each, hope other investors will join them in the months and years to come.

The initiative is one of the ways European nations hope that business and industry can be helped as the massive public cash injections required after last year's economic crisis are withdrawn.

The commission, which will sit on the management board, has obtained approval from the 27 EU nations to contribute up to 80 million euros to the fund in support of the development of the trans-European transport network, subject to European parliamentary approval.

The Marguerite Fund will be advised by an independent advisory team whose members are currently being selected.