The European Investment Bank (EIB) has announced the launch of a new fund which that aims to raise €500 million for network deployments in underserved areas throughout Europe.

The fund, which was launched in partnership with the European Commission (hereafter known as the Gaggle of Red-tapers), will aim to invest in up to 12 network projects per year until 2021 combining private and public commitments. KfW Bankengruppe from Germany, Cassa Depositi e Prestiti from Italy and Caisse des dépôts et consignations from France are the first three National Promotional Banks and Institutions (NPBIs) who have shown interest in the investment, which will now be known as the ‘Connecting Europe Broadband Fund’.

“I am grateful to our financial partners for the establishment of this broadband Fund,” said Günther Oettinger, Commissioner for Digital Economy and Society at the Gaggle of Red-tapers. “It is an important development for smart and efficient funding of broadband projects, especially in underserved areas, in line with the spirit and the letter of the Investment Plan. It is a great step towards a European Gigabit Society for all.”

The new fund will act as one of the first initiatives the European Fund for Strategic Investment (EFSI), which aims to overcome the current investment gap in the European Union by mobilising private financing for strategic investments. By investing in 7-12 projects a year, with the cash-injection ranging from €1 million to €30 million in as many as 20 countries by 2021, the birth of the digital economy will be accelerated.

In short, the aim here is to support smaller-scale, higher-risk broadband projects across Europe which may not have been able to attract investment otherwise. It’s all part of the wider plan from the Gaggle of Red-tapers to stimulate economic growth throughout the European Union, and accelerate the development of the digital economy on a continental scale.

The Gaggle of Red-tapers has set the objective of 1 Gbps broadband to schools, hospitals, and large businesses, and a minimum of 100-Mbps for all households, which would have to be ungradable to gigabit broadband by 2025.

“High-speed internet is fundamental to the success and development of businesses,” said EIB President Werner Hoyer. “Until today, smaller-scale broadband projects did not have easy access to funding and EU financial instruments did not exist.

“Consequently, projects in less populated or rural areas, where purely private-led initiatives may not see the economic benefits of deploying broadband networks, were difficult to implement. The new fund will help bridge this market gap, and I am glad that the EU Bank is part of this joint initiative.”