GreenEcoNet TW6: Finance opportunities for green SMEs. Private climate finance delivery. mechanisms for SMEs. state of the art

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1 Private climate finance delivery mechanisms for SMEs state of the art Valentino MARINI GOVIGLI and Corrado TOPI Research Associate and Senior Research Fellow Stockholm Environment Institute University of York centre and This project has received funding from the European Union s Seventh Framework Programme for research, technological development and demonstration under grant agreement no

2 Outline 1. Introduction: What is the current status of private climate finance? A review of the current finance environment Climate finance 2. Specific cases studies InnovFin, EIB - EIF The SME instrument, EC Brief overview of national and local instruments SMEs Climate finance 3. Conclusion and way forward SME ad hoc instruments

3 What is the current status of private climate finance? Post COP21 Agenda? ICLEI Climate stakeholders (States, Businesses & cities) need to foster climate resilient solution BUT only a small percentage of those have the knowhow and the resources to implement an effective low carbon growth paradigm Climate change foresees severe global threats (Inaction), but as well as potential new business opportunities KEY role of PRIVATE climate finance

4 What is the current status of private climate finance? At 2014 the current investment on climate finance was $391 billions ($243 billions private funds) CPI Mainly destined to mitigation activities Lack of data reliability We scrutinized more than 100 private finance actions worldwide as to understand the most used instrument and the directionality of the finance fluxes

5 What is the current status of private climate finance?

6 What is the current status of private climate finance?

7 What is the current status of private climate finance? SME requirements: SME Midcaps Large caps Promoters/advisory 1. Lowered investment barriers 2. Accessible & clear funding schemes 3. Financial schemes open towards innovative business (including: complex technologies/products, unproven markets intangible assets) 4.

8 Instrument #1 InnovFin: green SME as innovative business EIB instrument launched under the Horizon2020 Foreseen expenditure: 24 billion (up to 48) SME-dedicated instruments: Guarantee facility or Venture capital Valid for EU ember states and Horizon associated countries Support innovators of all sizes (not strictly green) Online application process & direct costumer center:

9 Instrument #1 InnovFin: EXAMPLE Sector: Wind turbine - Solutions for special lifting and transportation tasks Business size: Danish SME (55 employees) Applied for an InnovFin dedicated instrument to SME 1 million raised to start a new service through the dedicated InnovFin fund

10 Instrument #1 InnovFin: Evaluation Directed to SMEs H L = Low M= Medium H = High M Clarity of the loan application process H M L L L L M H Loan entity M H Green focus

11 Instrument #2 The SME instrument Dedicated SME instrument, established under horizon Billion for period ( ) Aim: develop SMEs innovative ideas for products, services, business SME-dedicated instruments: Business innovation grants, business coaching, additional services Unclear application process/ good FAQ interface:

12 Instrument #2 The SME instrument: summary sme-instrument

13 Instrument #2 The SME instrument: Flexbimec Italian SME focused on Industrial installations Applied for a SME support in order to develop a new line of fluids metering equipment (project REFEREE) Submitted the project succesfully to phase 1 obtained funds to perform a feasibility study

14 Instrument #2 The SME instrument: Evaluation Directed to SMEs H M L = Low M= Medium H = High Clarity of the loan application process H M L L L L M H Loan entity M H Green focus

15 Instrument #3: national Governments, local banks Very broad and complex number of instruments and services available Regional, National Governments Local, national banks

16 Instrument #3: national Governments, local banks Directed to SMEs H M L = Low M= Medium H = High Clarity of the loan application process H M L L L L M H Loan entity M H Green focus

17 Conclusions & way forward The financial environment dedicated to SMEs is quite broad Funding sources for SMEs differ in terms of: - type of instrument - type of investor - targeted SME Detecting available and necessary information become complicate and time consuming Key role of SMEs facilitator agencies Need of reliable evaluation methods apt to assess the instrument goodness as well as the final targets in term of green economy (efficacy, effectiveness and completion of the delivery)

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