1 / 14

Warsaw, 23 March 2007

Joint Technology Initiative for Clean Coal EU Financial Instruments Supporting the Development of Technology Initiatives. Warsaw, 23 March 2007. Kim Kreilgaard. Table of Content. RSFF Key Terms. 1. RSFF Implementation Strategy. 2. EIB Financing. 3. Risk Sharing Finance Facility.

jerome
Download Presentation

Warsaw, 23 March 2007

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Joint Technology Initiative for Clean CoalEU Financial Instruments Supporting the Development of Technology Initiatives Warsaw, 23 March 2007 Kim Kreilgaard

  2. Table of Content RSFF Key Terms 1. RSFF Implementation Strategy 2. EIB Financing 3.

  3. Risk Sharing Finance Facility RSFF – Key Terms RSFF provisioning & capital allocation FP7 EUR 1bn EUR 1bn OWN RESOURCES Beneficiaries Eligibility • Large Corporates,Mid-caps, SMEs, turnaround situations, infrastructure SPVs, Universities and PPPs • Commission: R&D • EIB: R&D + I Size ofLoans EIB Products • Corporate loans, project finance • Risk sharing bank facilities, funds that meet the RSFF credit profile • Reduced to min. EUR 7.5m for direct loans/guarantees EUR 10bn in Financing Capacity

  4. Risk Sharing Finance Facility  Eligibility 2 1 EC Window - RTD & D EIB Window - RDI Fundamental research Definition stage / feasibility studies Industrial research Pre-competitive development activity Pilot and demonstration projects Innovation • Geographic Scope: EU 27 and Associated countries (Iceland, Liechtenstein, Norway, Switzerland, Israel, Turkey and Croatia)

  5. Risk Sharing Finance Facility  Key counterpart groups Corporate /Project Finance Risk Sharing with Banks • Targeted beneficiaries: Mid-sized and large corporations (low/sub-investmentgrade), • Product Ideas: Structured individual corporate loans for R&D projects (senior/junior debt, mezzanine) • EIB value added: Lower Financing Cost, increase of debt capacity (in case of subordination), project risk sharing • Targeted beneficiaries: SMEs & MidCaps(low/sub-investmentgrade) • Product Ideas: RSFF Facilites; Interest Contingent Supplier Facility, Co-financing, Global Authorisations • EIB value added: Banks: risk sharing, capital relief, new customers/cross selling, Beneficiaries: risk sharing, higher debt capacity, lower financing cost NEW PRODUCT DEVELOPMENTS • Targeted beneficiaries: JTIs, Technology Platforms, EUREKA Joint Ventures,… • Product Ideas: SPV based structures for individual R&D consortia • EIB value added: Provide structuring know-how (Project Financing) and facilitate private sector funding • Targeted beneficiaries: Universities • Product Idea: Royalty fund for scientific research projects • EIB value added: Facilitate financing for universities, utilize royalty streams of research results (e.g. patents, lower financing cost Financing R&D Consortia Risk Sharing with Universities

  6. Table of Content RSFF Key Terms 1. 2. RSFF Implementation Strategy EIB Financing 3.

  7. RSFF Implementation Strategy Key objectives Extend EIB financing to new groups of counterparts through the introduction of new products  RSFF Product Development Collaborate with the Commission on financing FP7 projects  Synergies with ETPs, EUREKA, ESFRI etc. Pursue a sector strategy in support of RDI investments in Collaboration with lead players, platforms and intermediaries.  RSFF Sector Strategy Develop co-financing and risk sharing with financial institutions for small projects / SMEs  RSFF Facilities

  8. Generating Projects and Portfolio Building  RSFF Product Development : rationale for SMEs/ Midcaps SFF Financing (low/sub-investment grade) for RDI projects MidCaps/ SMEs RSFF Extend Debt Capacity Scarcity of capital is an obstacle for RDI / growth Subordinated Debt/Mezzanine Limited debt capacity: equity gap/volatile cash-flows Interest Contingent Loan Complementary Products Financing Needs Extend Lending Capacity Limited access to capital markets Risk Sharing Facilities Consolidation pressure + internationalisation Co-financing/leverage of mezzanine funds

  9. RSFF Implementation Strategy Synergies with ETPs, EUREKA, ESFRI, etc. European Technology Platforms (ETPs) Joint Technology Initiatives (JTIs) ESFRI • EIB is Privileged Bank in the dialogue for the development of ETPs, JTIs and ESFRIs • Core potential financier of low/sub-investment grade ETP, JTI, ESFRI member companies EIB ROLE • ETPs provide a wide range of key players for RSFF financing • ETP SRAs (Strategic Research Agenda) provides coherent framework for RDI financing • EIB can leverage its pan EU focus, sector knowledge, financial engineering and advisory capabilities to the benefits of ETPs, JTIs and ESFRIs. BENIFITS

  10. Table of Content RSFF Key Terms 1. RSFF Implementation Strategy 2. EIB Financing 3.

  11. EIB Financing – Key terms General EIB Terms and Minimum Requirements • Maximum loan amount: up to 50% of project cost. • Loan tenors: depending on the “economic life” of the investment (generally between 10 and 20 years; exceptions). • Interest Rate: Fixed or Variable • Minimum size per loan: >EUR 25m for investment grade financing • > EUR 7.5m under RSFF • <EUR 25m Intermediated Credit Lines Projects should… …be eligible for EIB finance …be technically sound …be financially viable …show accteptable returns …comply regulations (esp. environment/procurement) …have adequate security

  12. General Overview on the EIB EIB Methods of Operation Bank Intermediated Loans Bank Guaranteed Loan Direct Loan EIB lends to client’s house bank(s)passing through its low funding cost.Credit risk is born by the com. bank. EIB provides financing directly to thecustomer alongside other lenders asappropriate. Credit risk is born by the guarantor. EIB provides financing directly to thecustomer alongside other lenders asappropriate. Credit risk is shared on an equal basis with other bank(s). EIB EIB EIB Commercial Bank(s) Loan Loan Guarantee Loan Loan Commercial Bank(s) Commercial Bank(s) Loan(s) Customer Customer Customer e.g. Global Loan, Framework Loan

  13. The Risk Sharing Finance Facility What can be financed ELIGIBLE COSTS Eligible project cost include: • Facilities: project capital expenditures for tangible assets; • Activities : project capital expenditures for intangible assets, research staff cost, incremental working capital needs and otherrelated operating expenses. Year 1 € 20m Year 2 € 10m Time Year 3 € 30m Total € 60m R&D budgets typically cumulated over 3 years (investment programme) MAX. EIB LOAN Up to 75% of the total project cost. € 45m

  14. Thank You ! RDI@eib.org www.eib.org/rsff

More Related