Transcript www.gsa.europa.eu

RISK SHARING FINANCE FACILITY
Growing Galileo 2009
Brussels 28 January 2009
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EC – DG RTD – Directorate B – Anna Krzyzanowska
Table of Contents
2
1.
Introduction to RSFF
2.
Implementation strategy
3.
Implementation results
4.
Awareness raising
5.
SMEs/Mid Cap product development
A political request to increase financial
support to R&D
• December 2005 European Council:
“The European Council invites the Commission in
cooperation with the European Investment Bank
(EIB) to examine the possibility of strengthening
their support for Research and Development by up
to a maximum of EUR 10 billion through a
financing facility with risk-sharing components to
foster additional investment in European research
and development, particularly by the private
sector.”
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Risk-Sharing Finance Facility
(RSFF):
The investment and financing
gap
• Despite increased FP 7 budget for 2007 – 2013 (EUR 54,6
billion), there is a lack of funding for excellent and top quality
R&D projects at EU level
• Investment in R&D is crucial for Europe’s competitiveness and
growth potential
• Lack of private investment in R&D has been identified as the
single key factor for Europe’s relatively weak total investment in
R&D
• R&D investment carries a high(er) risk and uncertainty; scarce
financing resources in Europe for such risky projects (market
deficiency)
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Risk-Sharing Finance Facility
Added value
An innovative financing mechanism to:
• Foster increased private investment in research by improving
access to loan finance.
• Risk-sharing between the Community and EIB to allow:
- Larger volume of risky lending to R&D
- Financing of riskier, but creditworthy projects
• Generate a leverage effect so that the volume of extra lending
by EIB and its partner banks is a 4 to 6 multiple of the
Community funds provided to the facility.
• Rely on an existing EIB facility (SFF), and therefore benefit from
EIB’ s experience and management.
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Table of Contents
6
1.
Introduction to RSFF
2.
Implementation strategy
3.
Implementation results
4.
Awareness raising
5.
SMEs/Mid Cap product development
RSFF implementation strategy
Risk categories
Moody's S&P and Fitch
…
…
A1
A+
A2
A
A3
ABaa1
BBB+
Baa2
BBB
Baa3
BBBBa1
BB+
Ba2
BB
Ba3
BBB1
B+
B2
B
B3
B-
•RSFF is a debt based instrument not a grant
•Financing does not involve a subsidy element
•The facility does not concern risk capital such
as venture capital
RSFF Risk Coverage Range
RSFF concerns companies or projects mature enough to demonstrate
capacity to repay and service debt on the basis of a credible business plan.
An external rating is not required.
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RSFF implementation strategy
Strategic objectives
 Support the 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 in
all MS and AC
 Priority of European Technology Platforms, Joint Technology Initiatives
and Eureka
 Support European Research Infrastructures (Capacities SP)
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RSFF implementation strategy
Eligible project cost
 Project capital expenditures in tangible assets.
 Intangible assets:
 Research staff cost
 Incremental working capital requirements
 Acquisition of Intellectual Property Rights
Multi-annual R&D budgets (typically 3-4 years)
Financing up to 50% of total cost, except
particular cases in line with EIB strategic
orientations (ie: environment, renewable
energies; …)
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RSFF implementation strategy
Beneficiaries of RSFF financing
 Mid-Caps and large corporates (typically unrated / sub investment grade /
turnaround situations)
 SMEs
 Research Institutes
 Universities
 Special Purpose / Project Companies
 Research Infrastructure promoters
Any size and ownership
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RSFF implementation strategy
RSFF products
 Corporate Loans (senior / junior)
 Guarantees
 Project Finance (limited/non recourse)
 Mezzanine Loans
 Risk Sharing Facilities with banks
 Other structured products
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RSFF implementation strategy
Financing terms
 Medium and long term financing
 Minimum size per loan: > EUR 7.5m (for smaller loans EIB makes available
Risk Sharing Bank Facilities
 Project assessment : eligibility, techno-economic and financial viability
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RSFF implementation strategy
Financing modes – individual financing
Direct loans / guarantees
Guarantee
Indirect loans / guarantees
Comm. bank
(Co-finance)
Refinancing/Guarantee
Loan or
Guarantee
Loan
Commercial bank
Loan
Borrower (promoter)
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Beneficiary (promoter)
RSFF implementation strategy
Financing modes – Risk Sharing Bank Facilities
Risk Sharing Bank Facility
Small and medium sized projects
Loan / Guarantee
Partner bank
(Mezzanine) Loans
Beneficiary
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Beneficiary
Beneficiary
Beneficiary
Table of Contents
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1.
Introduction to RSFF
2.
Implementation strategy
3.
Implementation results
4.
Awareness raising
5.
SMEs/Mid Cap product development
RSFF update
Summary
 Volumes: RSFF operations forecast for signature at the end of 2008 is
EUR 1.3 billion.
 Main sectors financed: renewable energy technologies, engineering and
automotive, life science and ICT plus risk-sharing with intermediaries
 Geographical spread: 14 countries at the end of 2008
 Financing modes: corporate loans, project finance and risk sharing bank
facilities
 Extensive awareness raising
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RSFF market update 2008
 The current market sentiment:
 (i) significant increases in credit spreads,
 (ii) sharp decline in commercial bank financing supply due to funding as
well as capital constraints of banks in the market and
 (iii) decreasing RDI investments due to expected economic down-turn.
 The implications for RSFF are both positive (more projects) and negative
(high mortality rate)
 Market/business risk profiles increased significantly hence an increase in
credit risk for new transactions but also for existing RSFF loan
exposures.
 Execution time for new operations is expected to increase and
sophisticated financial structuring to mitigate operational risks more and
more important
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Geographical Spread
End 2008
July 2008
Turkey
Austria
Austria
Bulgaria
Bulgaria
United Kingdom
Sw eden
Denmark
Turkey
Sw eden
France
Germany
Germany
Spain
Israel
Spain
Hungary
Italy
Italy
Netherlands
Luxembourg
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RSFF update
Sectors
End 2008
Life Science
21%
Bank Risk
Sharing
14%
Energy
24%
ICT
19%
Engineering
Industry
25%
“Bank Risk Sharing” represents loans provided by the EIB to intermediaries with a view to finance smaller loans (below EUR 7.5
million) to research-intensive companies.
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Table of Contents
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1.
Introduction to RSFF
2.
Implementation strategy
3.
Implementation results
4.
Awareness raising
5.
SMEs/Mid Cap product development
RSFF update
Awareness raising campaign and dissemination (EIB + EC)
 Over 40 seminars, workshops and meetings, and 17 conferences
organised with the stakeholders of FP7 and with potential RSFF
borrowers in 2008
 In 2008 (to date), the RSFF presentations were made in: Belgium,
Czech Republic, Denmark, Estonia, France, Finland, Germany, Hungary,
Italy, Lithuania, Luxemburg, the Netherlands, Poland, Portugal, Slovenia,
Spain, Sweden, Turkey, UK.
 The website www.eib.org/rsff is being frequently updated. Portfolio
updates and factsheets presenting example transactions will also be
posted there.
 EC RSFF sector continues to present RSFF to colleagues from DG
RTD and other DGs of the research family, either in the form of dedicated
presentations or within the framework of FP7 training sessions. The
network of RSFF liaison officers is regularly updated on RSFF progress.
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Table of Contents
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1.
Introduction to RSFF
2.
Implementation strategy
3.
Implementation results
4.
Awareness raising
5.
SMEs/Mid Cap product development
SMEs: Complementarities between CIP
and FP7 (RSFF)
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Risk Capital
 Facility: High Growth Innovative
SME Scheme (GIF), Ecotech
 Purpose: IP financing, technology
transfer, seed financing,
investment readiness
 Target Group: VC Funds,
Business Angels
 EIF Product: Fund-of-Funds
2
CIP Resources (SME)
3
RSFF (SME / MidCap)
 Facility: CIP Guarantee schemes
 Facility: RSFF
 Purpose: Growth financing for
SMEs
 Purpose: RDI financing
 Target Group: Formal VC Funds,
CLOs
 EIF Product: SME guarantees
(loans, microcredit,
equity/mezzanine, securitisation
 Target Group: SMEs/MidCaps,
Banks, PE Investors,
 EIB Product: Loans (incl.
Mezzanine), Funded Risk Sharing
Facilities with Banks (Investors)
Bank Loans and Guarantees
Formal VC Funds
Seed/Early Stage VC Funds
Business Angels
Entrepreneur, friends, family
Seed / Start-Up Phase
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Emerging Growth Phase
Development Phase
EIB and its partner banks (intermediaries)
For loans of EUR 7.5 million or more - direct involvement by the EIB
EIB
Borrower
For all loans where borrowers wish to work with their own banks,
in particular those of less than EUR 7.5 million - sharing of RSFF benefits
with intermediaries (e.g. through partial guarantees)
Refinancing/
Guarantee
EIB
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Intermediary
Borrower
SMEs/Mid Cap – Facility Structure
Approved
 Signature of the Automotive Supplier RDI Facility (loans
and guarantees to RDI projects of SMEs and mid cap
automotive suppliers in Germany; EUR 100m + EUR 50m)
- RSFF
 Approval of KfW Ipex Risk Sharing Facility (loans and
guarantees to mid-cap companies in Germany; EUR 100m
+ EUR 50m) - RSFF
 Approval of RZB Group Risk Sharing Facility (loans and
guarantees to mid cap companies in Austria, Hungary,
Romania; EUR 100m + EUR 70m) – partially RSFF
 Approval of CS Risk Sharing Energy Efficiency (loans and
guarantees to SMEs in the Czek Republic; EUR 100m +
EUR 60m) – SMEs, non RSFF
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SMEs/Mid Cap – Facility Structure
Running negotiations
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Project Name
Target
Amount (M EUR)
Bank Pekao BP
SME
100
BPI SME Risk Sharing SFF
SME
100
BA-CA Risk Sharing Austria RSFF
SME/Midcap
75
Banca Intesa
SME
100
SEB
SME
100
RSFF

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Thank you for your attention