The European Commission (EC) and European Investment Bank (EIB) announced a €500 million investment fund to improve broadband infrastructure across areas of the EU currently lacking high capacity connectivity.

Initial investors in the Connecting Europe Broadband Fund include German development bank KfW Bankengruppe, Cassa Depositi e Prestiti from Italy, French institution Caisse des dépôts et consignations and the EC itself, which will contribute €100 million from its Connected Europe Facility.

Following investments from other public and private individuals, the EC and EIB expect to raise over €500 million by first close – the point at which investments can start being made from the fund. The investment pot will be used to support projects installing high capacity broadband infrastructure into areas lacking the facility.

From 2017 to 2021, the Connecting Europe Broadband Fund will invest between €1 million and €30 million in 7 to 12 individual projects each year. In total, the EC expects the fund to improve connectivity in 20 different countries across the economic zone, unlocking additional investment into the projects of between €1 billion and €1.7 billion.

The investment fund is the second initiative designed to improve broadband connectivity within the EU to be announced this month. Last week, the EC revealed it was setting aside €120 million in a public Wi-Fi fund to boost access, particularly in areas with poor telecoms infrastructure.

Gunther H Oettinger, EC Commissioner for Digital Economy and Society, said: “I am grateful to our financial partners for the establishment of this broadband Fund. 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.”