EUROPEAN LONG-TERM INVESTMENT FUNDS: Investments In The Energy Infrastructure Of The Region And In Other Long-Term Projects Through Cyprus
The increasing public discourse, including political and diplomatic mobility, as to energy exploitation in the Mediterranean and subsequent energy distribution, also includes the construction of the necessary energy infrastructure projects. The proximity of Cyprus to the recently discovered sources of energy in the Mediterranean, renders Cyprus a potential candidate for the construction of energy infrastructure projects. At the same time Cyprus is also an international shipping centre, involved in financing the construction of vessels. However, the significant length and cost of such projects (energy infrastructure and shipping finance) automatically raise the question of their smooth and viable financing. Recently adopted European Union Law in the form of a Regulation, undertakes to provide a financing tool for such and other projects of long-term nature by introducing the ‘European Long-Term Investment Funds’. This way, a legal framework tailored to the needs of long-term investments is established, which interacts with the current local investment funds framework, adds value to Cyprus’ physical proximity to possible long-term projects and allows for Paneuropean fundraising possibilities from both professional and retail investors. ‘European Long-Term Investment Funds’ are also eligible applicants for financing from the European Investment Bank, whereby the relevant application is assessed by priority.
The present memo undertakes to provide a brief overview of this new legal framework and of its interaction with the investment funds legal framework currently applicable in Cyprus. The aim is to facilitate, through Cyprus, the financing of long-term projects in Cyprus, the European Union and in third countries.