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EUROPEAN INVESTMENT BANK Promoting European Objectives

The Risk Sharing Finance Facility (RSFF); -innovative finance for innovation- 6 th WIPO FORUM ON IP and SMEs Cardiff, 10th September 2008 Dr. Jacques van der Meer. EUROPEAN INVESTMENT BANK Promoting European Objectives. The EIB Group. The European Investment Bank (EIB)

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EUROPEAN INVESTMENT BANK Promoting European Objectives

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  1. The Risk Sharing Finance Facility (RSFF); -innovative finance for innovation-6th WIPO FORUM ON IP and SMEsCardiff, 10th September 2008Dr. Jacques van der Meer European Investment Bank

  2. EUROPEAN INVESTMENT BANK Promoting European Objectives European Investment Bank

  3. The EIB Group • The European Investment Bank (EIB) • The European Investment Fund (EIF) European Investment Bank

  4. EIB lending in 2007 (EUR 47.8 billion) European Investment Bank

  5. Innovation 2010 Initiative (i2i)Enactment of the Lisbon Agenda • ICT: Development of information and communication technologies and networks, modernisation and extension of networks, enhancing its accessability • Education and Training: modernisation/ upgrading of education facilities; training centres for teachers, ICT-specialist, accessibility (student loans), etc. • R&D and innovation private and public sector research, science parks, research centres and networks; European Investment Bank

  6. The Lisbon house Better Regulation/ Internal Market Industrial Policy SME Policy Innovation Policy R.S.F.F. Competitiveness and Innovation Framework Programme European Investment Bank

  7. RSFF: the set up RSFF provisioning & capital allocation EUR 1bn EUR 1bn OWN RESOURCES Eligible projects and costs Beneficiaries Size of loans Terms and products EUR 10bn in Financing Capacity European Investment Bank 5

  8. RSFF: Policy objectives • Support financing of innovative companies of any size and ownership for the implementation of eligible RDI projects • Provide value added by sharing risks with promoters, banks and other financiers for the financing of eligible projects • Offer RSFF access to small and medium sized projects and companies • Priority of European Technology Platforms, Joint Technology Initiatives and Eureka • Support European Research Infrastructures • Support innovative clusters, networks European Investment Bank

  9. Beneficiaries of RSFF financing ? • Mid-Caps and large corporates (unrated / sub investment grade / turnaround situations) • SMEs • Research Institutes • Universities • Special Purpose / Project Companies • Research Infrastructure promoters • Industrial and regional clusters/networks European Investment Bank

  10. Expenditures eligible for RSFF lending • Project capital expenditures in tangible & intangible assets (Capital Formation) • research staff cost (basic research, industrial research, development, pilot & demonstration plants; innovation (technological or organisational) • incremental working capital needs. • Development and Acquisition of -proprietory- IPR, and other related operating expenses • Product innovation includes testing, prototyping and launch of pre-series of first commercial application • Process innovation refers to development and introduction of new working methods and tools, such as ICT-driven innovation European Investment Bank

  11. RSFF, definition of the loan size • Investment costs can encompass 3-4 years • RSFF can be used to finance up to 50% of the eligible investment costs • Up front or flexible disbursement (e.g. at mile stone events) to match Cash Flow • Minimum size per loan: > EUR 7.5m (minimum “project-size” EUR 10-15 million) ELIGIBLE COSTS Project related CAPEX on tangible & intangible assets Research staff cost Incremental working capital Related operating costs Year 1 € 20m Time Year 2 € 10m Year 3 € 30m Total € 60m Eligible Costs RDI Budget mEUR 70 60 50% 50 40 30 20 10 0 Eligible Costs Max. EIB Financing European Investment Bank

  12. RSFF Financing terms • Medium and long term financing, depending on “assets” and risk profile • Project assessment : eligibility, techno-economic and financial viability and risks • In-house sector / risk pricing expertise • No equity stake, hence no dilution of ownership • Grace period, to march CF of the project • Milestone events related pricing (?) European Investment Bank

  13. RSFF product development…. • Corporate Loans (senior / junior) • Project Finance (limited/non recourse) • Mezzanine Loans • Risk Sharing Facilities with banks, corporates, others… • Other structured products European Investment Bank

  14. Dr. Jacques B.H. van der Meer Projects Directorate Innovation and Competitiveness Department Manufacturing and Industry (RDI) Phone: (+352) 4379 88 624 Fax: (+352) 4377 68 8831 eMail: j.vandermeer@eib.org European Investment Bank 100, boulevard Konrad Adenauer L-2950 Luxembourg European Investment Bank

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