Risk-Sharing Finance Facility and future EU Financial Instruments for RDI

Transcription

1 Not legally binding Risk-Sharing Finance Facility and future EU Financial Instruments for RDI Instrumentos financieros para apoyar la investigación, el desarrollo y la innovación en un contexto regional Zaragoza, 30 de octubre de 2012 Marie-Cécile ROUILLON 1 EC - DG Research and Innovation - Unit C-03 Financial Engineering

2 EU Financial Instruments: Why? Guiding principles include: 1. Addressing market/ funding gaps e.g. due to general economic uncertainty, innovation/ business risk 2. Ensuring European Union value added targeting policy goals (notably Innovation Union objectives) Catalytic effect on similar existing MS schemes or private investment, no crowding out 3. Multiplier effect Attracting additional private investment (greater than EU contribution)

3 What are EU Financial Instruments? Guarantees to financial intermediaries that provide lending to e.g. infrastructure projects, SMEs, persons at risk of social exclusion Equity/risk capital: e.g. venture capital to SMEs with high growth potential or risk capital to infrastructure projects Other risk-sharing arrangements with financial intermediaries in order to increase the leverage capacity of the EU funds or a combination of the above with other forms of EU financial assistance 3

4 Financial Instruments for RDI: Advantages / benefits can complement FP7 and HORIZON 2020 grant financing translation of R&D into innovation: FI can support the introduction of new technologies into the market more private funding for RDI: Risk-sharing between the EU and financial intermediaries respond to market demand: Demand-driven approach ("first comes, first served") Possible synergies could be developped (notably with regional Smart Specialisation Strategy)

5 Current FP7 Financial Instruments for RDI (until 2013): Risk-Sharing Finance Facility (RSFF) 5

6 What is the RSFF? An innovative loan finance instrument co-developed by the EC/ EIB and supported by FP7 Operational since 2007 and available until the end of 2013 Provides loan finance for Research, Development, Demonstration and Innovation in EU Member States and FP7 Associated Countries Can support riskier but creditworthy RDI projects through risksharing between the EU and the EIB Is demand-driven: projects supported on a 1st come, 1st served basis (no grant procedures, no expert panels) 6

7 EU/EIB Risk-Sharing & multiplying effect FP7 Contribution: up to 1 billion EIB Contribution: up to 1 billion up to 2 billion for Risk coverage for potential losses (non-repayment of RSFF loans by borrower/ beneficiary) allows EIB Group to provide up to 10 billion of RSFF loans and guarantees for Research, Development & Innovation investments 7

8 RSFF results and portfolio since Mid-2007 to end March 2012 Approved loans (by EIB): EUR 9.6 billion Signed loans (loan contract EIB borrower): EUR 7.5 billion 76 signed projects in 21 European countries (19 MS & 2 AC) Results by sector: 8

9 RSFF by country: 21 so far Spain: 2 nd largest country for RSFF operations (14% of total signed volume) European Investment Bank

10 RSFF Example in Spain: Financing solar power using indigenous renewable energy to contribute to combat climate change Solucar Solar Thermal Power project : Europe's first commercially operating power station using the sun's energy, west of Seville (Spain) EUR 50 million RSFF loan to further develop a large scale application of Concentrating Solar Power (CSP) technology, generating electricity without greenhouse-gas emissions Field of mirrors to concentrate solar radiation on a tower-mounted thermal receiver 10

11 More for innovative SMEs Risk-Sharing Instrument (RSI): Goal: Incentivising local banks to take more risk to finance innovative companies RSI launched in 2012, 1 st agreements signed with banks EIF guarantees to local banks (financial intermediaries) providing loans or leases (from 25,000 to 7.5 million) Target group: Research-intensive and/ or innovative SMEs & small mid-caps investing in RDI EIF provides a 50% guarantee per eligible loan, within loan portfolios; EU takes first-loss risk vis-à-vis the EIF Maximum portfolio volume of 120 million per intermediary 11

12 Lessons learned Make implementation simple and streamline the rules Specific legal framework increases trust and confidence Strive for coherence and consistency between instruments Prioritise awareness-raising to stimulate demand New risk-sharing arrangements => higher finance volumes Generally positive audits and evaluations of outputs Closer coordination with Structural Funds (link to CSF!)

13 Proposed future Financial Instruments for RDI ( ) under Horizon

14 Financial Instruments included in proposals for MFF (*) Current price Centrally managed by COM Shared Management Research, Development Innovation Growth, Jobs and Social Cohesion Infrastructure Horizon 2020 Equity and Risk Sharing Instruments Social Change & Innovation Micro-finance EUR 192m EUR 4bn (*) Competitiveness Creative Europe & SME (COSME) Guarantee Facility Equity & guarantees EUR 1.4bn (*) EUR 210m Erasmus for all Guarantee Facility EUR 881m Connecting Europe Facility (CEF) Risk sharing (e.g. project bonds) and equity instruments Budget not yet decided Instruments under Structural and Cohesion Funds EU level Off-the shelf instruments Tailor made instruments Significantly higher amounts than currently

15 Proposed Financial Instruments 2 financial instruments proposed under HORIZON 2020 and COSME: One Debt instrument One Equity instrument Please note: A dedicated SME instrument for research-intensive and innovative SMEs is also being proposed under HORIZON 2020 (grants!) 15

16 H2020: Loan and Guarantee facility Goal: Improve access to debt finance for private companies and public entities investing in R&D and Innovation Two parts: 1. "RSFF II": Loan Guarantee Facility For broad Mid-sized and larger companies, research institutions, PPPs, stand-alone projects, single SMEs 2. "RSI II": Guarantee facility for SMEs and small midcaps For SMEs and small mid-caps investing in R&D and Innovation Guarantees for loans of EUR 150,000 or more within loan portfolios Implementation in conjunction with the "Loan Guarantee facility for SMEs" under COSME and FIs proposed under the Structural/Regional funds 16

17 H2020: Equity Facility for Research & Innovation Goal: Improve access to Equity/ venture capital for companies investing in R&D and Innovation Focus: Early-stage capital; expansion/ growth capital provision also possible within limits Target group: Innovative companies (start-ups, SMEs) Implementation: intermediaries (funds) Implementation in conjunction with the "Equity facility for Growth" of COSME (focus: expansion and growth investments) and FIs proposed under the Structural/ Regional funds 17

18 Budget proposed Horizon 2020 Access to risk finance (under Industrial leadership) o million in current prices (net of admin costs) o At least 1/3 (ca bn) likely to be absorbed by SMEs and small midcaps o no breakdown equity debt COSME Actions to improve SME access to finance o million in current prices o Equity Facility for Growth: 690 million o Loan Guarantee Facility: 746 million indicative 18

19 Examples In development Accompanying measures in H2020 Technical assistance for financial intermediaries Investment-readiness schemes (including coaching, mentoring, etc) Raising awareness of VC firms and business angels Encouraging philanthropic foundations and individuals to support R&I and growth Fostering corporate venturing and the activities of family offices and Business angels 19

20 Key characteristics What to expect in the new debt and equity facilities under H2020 Full spectrum approach (from research to innovation) Stronger focus on SMEs and on medium-sized firms (midcaps) Market-driven, first-come, first-served basis PLUS: Targeting of sectors / policies by ring-fenced budgetary contributions Closer connection with regional policy Possible resource pooling with MS Structural Funds / top-ups 20

21 21 Thank you very much for your attention!

22 22 Back-up Slides

23 RSFF Eligible Costs Fundamental research EC window Definition stage / feasibility studies EC window Industrial research EC window Pre-competitive development activity EC window Pilot and demonstration projects EC window Innovation EIB window partly EC window 23

24 Financial Instruments : 2013: SMEs & Innovation SME Guarantees (SMEG) : approx. EUR 300m of EU budget generated 9.4bn of lending SMEs reached, volumes are increasing fast Target of SMEs is attainable Equity: High Growth and Innovation (GIF) : so far, EUR 344m of EU resources generated EUR 1.9bn of total investment volume, amounts growing fast. 190 SMEs covered so far Risk-Sharing Finance Facility (RSFF): EUR 2bn of EU and EIB resources expected to generate over EUR 10bn of lending to RDI projects. By end 2011 approximately EUR 7.5bn of lending already signed and EUR 5bn disbursed to final beneficiaries. Dedicated RSI facility for SMEs. European Progress Microfinance Facility (EPMF, est. 2010) by 2020, the EU contribution of EUR 100m is expected to have generated EUR 500m of micro-loans.

25 Current status and next steps 2011: Commission proposals were adopted 2012: Discussions in Council and Parliament on the legal framework (Financial Regulation, delegated act) as well as on the basic acts for the specific instruments (H2020, COSME) 2013: Expected adoption of legal bases by European Parliament and Council, negotiations with IFIs, preparations for the roll-out 2014: Roll-out, instruments are operational