InnovFin offers advice on financing research into cutting-edge technologies

InnovFin offers advice on financing research into cutting-edge technologies

Eco-innovative companies could benefit from an advisory service attached to the European Union's InnovFin – EU Finance for Innovators initiative. The advisory service is targeted at large-scale projects that require a minimum of €15 million in research and innovation (R&I) investment, and that aim to tackle one of the seven societal challenges that have been identified as core to the EU Horizon 2020 research funding programme.

Eco-innovation for societal challenges

InnovFin and its advisory service are not specifically targeted at eco-innovation, but among those societal challenges are a number for which eco-innovation is relevant: food security and sustainable use of land and the oceans, including the bioeconomy; smart, green and integrated transport; and climate action, environment, resource efficiency and raw materials.

The European Commission and the European Investment Bank (EIB) Group started the InnovFin initiative in 2014. It took over from previous frameworks designed to facilitate financing for cutting-edge research projects. Its job is to provide loans, loan guarantees and other means of leveraging funding for companies dealing with new, high-risk technologies for which markets have still to be proved. The various strands of InnovFin will provide €24 billion for projects. Because the EIB covers up to 50% of investment costs, the total R&I investment should reach €48 billion.

Loans, guarantees and other help

The main task of InnovFin Advisory is to help projects that need significant long-term financing to demonstrate their investment-readiness. Services offered by InnovFin Advisory include advice on strategic planning and business modelling, how to structure businesses to manage inflows of R&I investment, what sources of financing are available and what their eligibility criteria are, and accessing R&I funds from public sources. Smaller companies could in principle benefit from the services of InnovFin Advisory if they are part of consortiums or clusters with unified, large-scale R&I plans.

InnovFin Advisory is also engaged in providing tools that can be used by companies in search of financing – such as an online checklist through which companies can identify the InnovFin strand that is most suitable for them (http://helpingyouinnovate.eib.org/). InnovFin Advisory also carries out research on the investment funding landscape.

A March 2016 report on access-to-finance conditions for companies dealing with key enabling technologies highlights how banks often fail to provide sufficient financial support to such highly innovative companies. The report looks at how such financing is provided in countries such as Canada, Israel, Japan, Singapore and the United States, and makes recommendations on how the situation can be improved in the European Union.

Further information:

InnovFin Advisory: http://www.eib.org/products/advising/innovfin-advisory/index.htm

Study on access-to-finance conditions for key enabling technology companies: http://www.eib.org/infocentre/publications/all/access-to-finance-conditions-for-kets-companies.htm