Mobilising funding for social infrastructure
Info talks to Laurent Zylberberg, Director of Institutional, International and European Relations at Caisse des Dépôts (CDC), a public sector financial institution.
Info: Supporting local development projects is a major challenge for Caisse des Dépôts. What does the Group do to support social infrastructure?
LZ: Financing local development, notably in the form of infrastructure, is one of the Caisse des Dépôts Group’s historical missions. In particular, we are committed to financing social infrastructure which is crucial not only to maintaining territorial diversity but also to providing citizens with key essential services as close as possible to their doorsteps. Our financial support comes in the form of loans and via investments in equity. The different directorates within Caisse des Dépôts have all mobilised to meet these needs.
Thanks to our loans, Caisse des Dépôts is the number one financier in the social housing sector in France. Our subsidiary, the SNI Group, is the leading social housing lessor, providing accommodation for almost one million people across the country. We are also very active in the health sector, with 96 loans granted to health facility projects for a total of around two billion euros since 2008.
Info: Promoting inclusive growth by financing social infrastructure projects is one of the CEB’s priority lines of action. In your opinion, what are the possibilities for collaboration between our two institutions?
LZ: Having long been partners in a number of associations such as the European Long-Term Investors association (ELTI), our institutions know each other well. We have developed projects in common, including the financing of social housing via ADOMA, a subsidiary of the SNI Group. We are currently in the process of examining the possibilities for financing loans for the benefit of young workers’ hostels. We also share the same essential concerns aimed at supporting public policies in financing social projects (social housing, infrastructure, urban development, education, health, etc.).
Info: In France and in Europe, what contribution can financial institutions such as the CEB make to the process of reflection on the financing of social infrastructure, particularly in the areas of education, health and housing?
LZ: As I just mentioned, the CEB and Caisse des Dépôts are active members of the European Long-Term Investors association. Within this association, we have set up a High-Level Task Force, chaired by Romano Prodi and Christian Sautter, in order to reflect on innovative methods of financing that could be used in the field of social infrastructure within the European Union. This work has mobilised numerous high-level experts who have drafted a report proposing an innovative approach and this will be submitted to the European Commission in the coming weeks.
The long-term finance institutions not only possess expertise in matters of financing but also in-depth knowledge of their respective domestic markets, and these are features that will have to be capitalised upon when it comes to putting the recommendations of the above-mentioned report into practical effect. Moreover the extension of the European Investment Plan (“Juncker Plan”) should allow for a greater allocation of funds for social infrastructure. Finding solutions for financing social infrastructure that have positive externalities and a controlled risk profile for a reasonable return is, without any doubt, a major challenge for institutions such as ours.