Investment Plan for Europe: European Fund for Strategic Investments adds firepower to Horizon2020 for innovative SMEs
Brussels, 22 July 2015
Today (22 July 2015) the European Commission has put the final building blocks in place to kick-start investment in the real economy. A package of measures agreed today will ensure that the European Fund for Strategic Investments (EFSI) is up and running by early autumn 2015, keeping the ambitious timetable set by President Jean-Claude Juncker to implement the Investment Plan for Europe.
Carlos Moedas, Commissioner for Research, Science and Innovation, today signed an agreement with the European Investment Bank (EIB) and the European Investment Fund (EIF) that will enable the EFSI to enhance existing loan guarantee instruments. This notably concerns the InnovFin SME Guarantee, a part of the new generation of financial instruments developed under Horizon 2020, the EU's research and innovation funding programme.
Commissioner Moedas said: "The InnovFin instruments that we put in place to help innovative SMEs access finance have had phenomenal success and have been oversubscribed for 2015. The backing of the European Fund for Strategic Investments will help satisfy the extraordinary demand by ensuring more and faster access to finance for innovative SMEs. This is one tangible example of the Investment Plan for Europe already delivering for research and innovation and increasing the firepower of Horizon 2020.”
EFSI SME Window will enhance the Horizon 2020 InnovFin SME Guarantee instrument in several ways:
- it will significantly increase the currently available volume of financing to innovative SMEs by making immediately available €750 million initially planned for later commitments. The EIF will be able to enter into agreements with banks across the EU - such as have been recently concluded in France, Luxembourg, the UK or Italy - and to reach earlier the objective of €14 billion of supported investments
- in addition, EFSI will provide the EIF with the capacity to sign extra loans to innovative SMEs and small mid-caps
- amounts released from EFSI risk cover on InnovFin SME Guarantee will be redeployed to benefit SMEs. At least €420 million will be used to increase budgets available for InnovFin debt and equity products
- new products with an EFSI guarantee of around €900 million in total will further increase investments in innovative SMEs and small mid-caps
Globally, the EFSI SME Window is expected to support at least €30 billion of investments carried out by innovative SMEs and small mid-caps.
Today, in the context of the Horizon 2020 InnovFin facilities, the Commission, the EIB and the EIF also signed another agreement on a new pilot scheme run under the InnovFin SME Venture Capital facility, which will co-finance investments by business angels (BAs) in innovative SMEs and small midcaps that predominantly aim to commercialize new ICT-related products and services.
The aim of this pilot is to help overcome the deficiencies of the BAs financing environment by providing equity stakes in funds aiming to co-invest with or managed by BAs for the ultimate benefit of innovative SMEs and small midcaps located in the Member States and countries associated to Horizon 2020, with a particular focus on Central and Easter Europe. With an initial EU financial contribution of €30 million, this pilot is expected to generate an amount of up to €120 million of investments.
Other decisions taken by the College of Commissioners today include:
- Confirmation of the projects pre-financed by the EIB will receive the backing of the EFSI guarantee: Copenhagen Infrastructure II / Abengoa research, development and innovation II / Energy efficiency in residential buildings / Grifols Bioscience R&D / Äänekoski bio-product mill / Redexis Gas Transmission and Distribution / Arvedi Modernisation Programme / Primary healthcare centres PPP
- The appointment, together with the European Investment Bank (EIB), of the members of EFSI’s Steering Board, including Robert-Jan Smits, European Commission's Director General for Research and Innovation, as alternate member.
- Final arrangements to launch the European Investment Advisory Hub (EIAH) and decision on the management and main elements of the European Investment Project Portal (EIPP). The EIPP is a publicly available, secure web portal where EU based project promoters seeking external financing are given the opportunity to promote their projects to potential investors.
The economic crisis brought about a sharp drop of investment across Europe. That is why collective and coordinated efforts at European level are needed to reverse this downward trend and put Europe on the path of economic recovery. The Commission set out an approach based on three pillars: structural reforms to put Europe on a new growth path; fiscal responsibility to restore the soundness of public finances and cement financial stability; and investment to kick-start growth and sustain it over time. The Investment Plan for Europe is at the heart of this strategy.
On 28 May 2015, just four and a half months after the Commission adopted the legislative proposal on 13 January, EU legislators reached a political agreement on the Regulation for a European Fund for Strategic Investments (EFSI). Member States unanimously endorsed it on 10 March and the European Parliament voted through the Regulation at their plenary session on 24 June, allowing the EFSI to be operational by early autumn as planned.
About Horizon 2020 and InnovFin
On 1 January 2014, the European Union launched a new research and innovation funding programme called Horizon 2020. Over seven years, almost €80 billion will be invested in research and innovation projects to support Europe’s economic competitiveness and extend the frontiers of human knowledge. The EU research budget is focused mainly on improving everyday life in areas like health, the environment, transport, food and energy. Research partnerships with the pharmaceutical, aerospace, car and electronics industries also encourage private-sector investment in support of future growth and high-skilled job creation.
"InnovFin – EU Finance for Innovators", the new generation of EU financial instruments and advisory services was developed under Horizon 2020 to help innovative firms access finance more easily. "InnovFin – EU Finance for Innovators" will help to inject around €50 billion in investments in Research and Innovation across Europe.