The European Union and the European Investment Bank Group have launched a new generation of EU financial instruments and advisory services for innovative firms to access finance more easily.
Over the next seven years, the “InnovFin – EU Finance for Innovators” will launch products that will make available more than €24 billion of financing for research and innovation by small, medium and large companies and the promoters of research infrastructures.
This finance is expected to support up to €50 billion of final R&I investments.
InnovFin – EU Finance for Innovators – will consist of guarantees for financial intermediaries to direct loans to enterprises as well as advisory services to support R&I projects in the EU and countries associated to Horizon 2020, the new EU research program for 2014-20. Guarantees and loans will be backed by funds set aside under Horizon 2020 and by the EIB Group for the purpose of supporting R&I activities, which by nature are riskier and harder to appraise than traditional investments.
These debt instruments will be complemented in the near future by a suite of equity instruments managed by the European Investment Fund (EIF).
The previous Risk-Sharing Finance Facility developed under the seventh EU framework programme for research and technological development (FP7) financed 114 R&I projects to the tune of €11.3 billion and in addition provided loan guarantees worth over €1.4 billion.
InnovFin products include:
– InnovFin Large Projects, which aim to improve access to risk finance for R&I projects emanating from larger firms; universities and public research organizations; R&I infrastructures (including innovation-enabling infrastructures); public-private partnerships; and special-purpose vehicles or projects (including those promoting first-of-a-kind, commercial-scale industrial demonstration projects). Firms and other entities located in Member States and Associated Countries will be eligible as final beneficiaries. Loans from €25m to €300m will be delivered directly by the European Investment Bank.
– InnovFin MidCap Growth Finance, which offers senior and subordinated loans or guarantees (including mezzanine and quasi equity financing), in order to improve access to finance mainly for innovative larger midcaps (up to 3000 employees), but also SMEs and small midcaps. Loans from €7.5m to €25m will be delivered directly by the European Investment Bank to eligible beneficiaries in EU Member States and Associated Countries.
InnovFin MidCap Guarantee, which provides guarantees and counter-guarantees on debt financing of up to €50m, in order to improve access to finance for innovative midcaps (up to 3000 employees) which are not eligible under the InnovFin SME Guarantee. This will be rolled out through financial intermediaries such as banks, other financial institutions. Under InnovFin MidCap Guarantee, financial intermediaries will be guaranteed against a portion of their potential losses by the EIB.
– InnovFin SME Guarantee, which provides guarantees and counter-guarantees on debt financing of between €25,000 and €7.5m, in order to improve access to loan finance for innovative small and medium-sized enterprises and small midcaps (up to 499 employees). This facility is implemented by the European Investment Fund, and will be rolled out through financial intermediaries – banks and other financial institutions – in EU Member States and Associated Countries. Under this facility, financial intermediaries will be guaranteed by the EIF against a proportion of their losses incurred on the debt financing covered under the facility.
– InnovFin Advisory, which aims to improve the “bankability” and investment-readiness of large projects that need substantial, long-term investments. It will also provide advice to improve the conditions for access to risk finance for R&I. It builds on a successful pilot operated under the Risk-Sharing Finance Facility in FP7. The main clients foreseen are promoters of large R&I projects that meet Horizon 2020’s Societal Challenges.
FinSMEs
21/06/2014
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