european investment bank 1 the risk sharing finance facility (rsff); -innovative finance for...
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European Investment Bank
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The Risk Sharing Finance Facility (RSFF);
-innovative finance for innovation-
6th WIPO FORUM ON IP and SMEsCardiff, 10th September 2008
Dr. Jacques van der Meer
2European Investment Bank
EUROPEAN INVESTMENT BANK
Promoting European Objectives
3European Investment Bank
The EIB Group
The European Investment Bank (EIB)
The European Investment Fund (EIF)
4European Investment Bank
EIB lending in 2007 (EUR 47.8 billion)
5European Investment Bank
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
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The Lisbon houseThe Lisbon house
Better Regulation
/ Internal Market
Competitiveness and Innovation Framework Programme
Industrial Policy
SME Policy
InnovationPolicy
R.S.F.F.
European Investment Bank
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RSFF: the set up
OWN RESOURCES
EUR 1bn
RSFFprovisioning &
capital allocation
EUR 1bn
Beneficiaries
Size of loans
Eligible projects and costs
Terms and products
EUR 10bn in Financing Capacity
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European Investment Bank
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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
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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
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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
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RSFF, definition of the loan size
0
10
20
30
40
50
60
70
Eligible Costs Max. EIB Financing
mEUR
Eligible Costs RDI Budget
50%
ELIGIBLE COSTS
€ 20m• Project related CAPEX on
tangible & intangible assets• Research staff cost• Incremental working capital• Related operating costs
Tim
e
Year 1
€ 10mYear 2
€ 30mYear 3
Total € 60m
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)
European Investment Bank
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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 (?)
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RSFF product development….
Corporate Loans (senior / junior)
Project Finance (limited/non recourse)
Mezzanine Loans
Risk Sharing Facilities with banks, corporates, others…
Other structured products
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Dr. Jacques B.H. van der Meer
Projects DirectorateInnovation and Competitiveness DepartmentManufacturing and Industry (RDI)
Phone: (+352) 4379 88 624Fax: (+352) 4377 68 8831eMail: [email protected]
European Investment Bank100, boulevard Konrad AdenauerL-2950 Luxembourg