1 financing rtd and innovation in the european union by the eib financing rtd and innovation in the...
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Financing RTD and innovation in the European Financing RTD and innovation in the European Union by the EIB Union by the EIB
Financing Growth and Cohesion in the Enlarged EUFinancing Growth and Cohesion in the Enlarged EU
Dr. Guy ClausseDr. Guy Clausse
Operational Lending PoliciesOperational Lending Policies
g. [email protected]. [email protected]
http:www.eib.orghttp:www.eib.org
Brussels, 24/11/2005Brussels, 24/11/2005
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PRODUCTIVITYEMPLOYMENT
COMPETITIVENESSGROWTH
Research & Development& Innovation
EU 25; + 100bn p.a.
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Time
Basic Research
Applied Research
Technological developmentPrototyping
IPR
Should RTD activities be financed only through grants ?
Many RTD projects, which are currently undertaken thanks to subsidies, or abandoned for lack of them, have a financial profile
that could give them access to loans
GRANTSGRANTS GRANTS
LOANS LOANS LOANS
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Created by the Treaty of Rome in 1958, to provide long-term finance for projects promoting European integration;
Subscribed capital EUR 163.7bn;
EIB shareholders: 25 Member States of the European Union;
EIB’s lending in 2004: EUR 43 bn, EUR 40 bn within the EU-25;
EIB’s borrowing: EUR 50 bn in 2004;
EIF
Venture capital: 358m in 2004, 2.8 bn invested in 200 funds
SME guarantees: 1.4 bn in 2004, 7.7 bn in 150 operations
EIB - European Union’s financing group:
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STRATEGIC OUTLOOK: Corporate Operational Plan 2005-2007
5 priorities in the EU
economic + social cohesion in the enlarged EU:
- 28bn in 2004 (71% of total EU lending)
- Objective 1 (47%)
- Objective 2 (36%)
- Mixed operations
implementation of i2i – the innovation 2010 initiative: - 7 bn in 2004
TEN, Trans-European Networks;
environmental protection and improvement.
Support to SMEs: EIB global loans, EIF
EIB implements EU policies; a policy driven Bank
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Results of i2i: loan signatures 2000-2005
Signatures Education &
e-learning
RTD I C T Total
M EUR Nr of projects
M EUR Nr of projects
M EUR Nr of projects
M EUR Nr of projects
2000 May-Dec.
482 9 54 1 1 628 8 2 164 18
2001 1 418 11 1 688 12 1 931 17 5 037 40
2002 952 11 2 118 15 547 10 3 616 36
2003 2 711 28 2 130 17 1 378 13 6 219 58
2004 1 678 18 4 131 27 1 257 13 7 065 58
2005Jan-Sep.
1 596 19 4 779 28 950 5 7 585 55
Total 2000-2005
8 987 97 15 009 102 7 691 66 31 687 265
28% 48% 24%
i2i as the EIB’s main contribution to the Lisbon process (50 bn)
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i2i - Geographic distribution of signed loans (2000 –2005)
EU+109%
EU-15 Objective 1
20%
EU-15 Objectives
2 & 1 combined17%
EU-15 Objective 2
25%
EU-15 Non assisted
areas27%
Other countries
2%
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RTD - Geographic distribution for signed loans (2000 –2005)EU+10
7%
EU-15 Objective 1
19%
EU-15 Objectives
2 & 1 combined12%
EU-15 Objective 2
32%
EU-15 Non assisted
areas28%
Other countries
2%
Other countries
2%
EU-15 Non assisted
areas28%
EU-15 Objective 2
32%
EU-15 Objectives
2 & 1 combined12%
EU-15 Objective 1
19%
EU+107%
Few European « centers of excellence » or innovation throughout the Union?The wrong debateKeep a well-balanced « middle of the road » approach« Coordinate, co-finance, compete »
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• Rehabilitation and modernisation of primary and secondary schools
e.g. in Edinburgh, Finland, Romania and Turkey
• Extension and modernisation of university facilities
e.g. in Athens, Brno, Magdeburg, Nicosia, Valencia, Poland
• Student loan schemes in Hungary and Italy
Education and e-learning project types
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• Industrial RTD (research activities, labs, pilot plants) (Boeringer Ingelheim, Advanced Mask House Dresden, VATech)
• Research organisations (Cancer Centre Madrid)
• Large Infrastructures (LHC of CERN, IMEC, FELs)
• Science parks, incubators (EMBL, Turku)
• Specific global loans for innovative SME’s (ICO, SPIMI)
• Projects from Techn Platforms/FP7 (H2, Nanotechs, new mobile telecoms…)
RTD project types
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EIB’s main instrument for increased risk taking: SFF
Total reserves of EUR 750 m; target: operations between EUR 2.3 and EUR 5.0 bn; products:
senior loans and guarantees incorporating pre-completion and early operational risk;
subordinated loans and guarantees ranking ahead of shareholder subordinated debt;
mezzanine finance, including high-yield debt for industrial companies in transition from SME scale or in the course of restructuring;
project-related derivatives;
RTD, Education/PPP, Audiovisual, TENs/PPP, Mediterranean projects.
Structured Finance Facility
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Conclusions of the March 2005 European Council :“The European Investment Bank will have to extend its Structured Finance Facility to R&D projects and, together with the Commission, explore new ways of using Community funds to leverage EIB loans.”
Encouragement for i2i, for more risk taking and for combining grants + loans
EIB is the partner of the Commission :Common policy mandate under Lisbon AgendaEU–institution lending in all EU countriesExperience gathered in R&D through existing i2i and SFFCooperate with financial institutions at national levelLong term strategy and thus medium/long term lending
Risk-sharing finance facility:A Commission-EIB Joint Initiative
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Risk-sharing finance facility:Objectives and added value
An innovative financing mechanism to:Foster increased private investment in research by
improving access to EIB loan finance.Complementarity between FP 7 and EIB lending under SFFRisk-sharing with EIB to allow more lending to risky, but
bankable projects in RTDGenerate a leverage effect so that the volume of extra
lending by EIB is a multiple [3 to 6] of the Community funds allocated to the facility.
Rely on an existing EIB facility, and therefore benefit from EIB experience and management.
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Summing up and Widening the Perspective
i2i : EIB lending + EIF venture capital forinnovation
SFF : EIB lending, also for innovation, to more risky projects
RSFF : EIB lending supported by FP 7 resources for more risky RTD projects
JASPERS: project preparation, also for innovation projects
JEREMIE : EIF to support SMEs, including innovative SMEs
Co-Financing : EU Grants + EIB Loans
EIB moving the regions closer to the Lisbon goal