Download for RDI projects RSFF Financing Needs

Joint Technology Initiative for Clean Coal
EU Financial Instruments Supporting the Development of Technology
Initiatives
Warsaw, 23 March 2007
Kim Kreilgaard
Table of Content
2
1.
RSFF Key Terms
2.
RSFF Implementation Strategy
3.
EIB Financing
Risk Sharing Finance Facility
RSFF – Key Terms
EUR 1bn
OWN RESOURCES
EUR 1bn
 Large Corporates,Mid-caps, SMEs,
turnaround situations, infrastructure
SPVs, Universities and PPPs
 Commission: R&D
R&D + I
EIB Products
 Corporate loans, project finance
 Risk sharing bank facilities, funds that
meet the RSFF credit profile
Size of Loans
 Reduced to min. EUR 7.5m
for direct loans/guarantees
EUR 10bn in Financing Capacity
3
FP7
Beneficiaries
Eligibility
 EIB:
RSFF
provisioning &
capital
allocation
Risk Sharing Finance Facility
 Eligibility
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EC Window - RTD & D
2
EIB Window - RDI
Fundamental research
Definition stage / feasibility studies
Industrial research
Pre-competitive development activity
Pilot and demonstration projects
Innovation
 Geographic Scope: EU 27 and Associated countries (Iceland, Liechtenstein, Norway,
Switzerland, Israel, Turkey and Croatia)
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Risk Sharing Finance Facility
 Key counterpart groups
Risk Sharing with Banks
Corporate /Project Finance
• Targeted beneficiaries: SMEs & MidCaps
(low/sub-investmentgrade)
• Targeted beneficiaries: Mid-sized and large
corporations (low/sub-investmentgrade),
• Product Ideas: RSFF Facilites; Interest Contingent
Supplier Facility, Co-financing, Global Authorisations
• Product Ideas: Structured individual corporate loans for
R&D projects (senior/junior debt, mezzanine)
• EIB value added: Banks: risk sharing, capital relief,
new customers/cross selling, Beneficiaries: risk
sharing, higher debt capacity, lower financing cost
• EIB value added: Lower Financing Cost, increase of
debt capacity (in case of subordination), project risk
sharing
NEW PRODUCT DEVELOPMENTS
• Targeted beneficiaries: Universities
• Product Idea: Royalty fund for scientific research
projects
• EIB value added: Facilitate financing for universities,
utilize royalty streams of research results (e.g. patents,
lower financing cost
Risk Sharing with Universities
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• Targeted beneficiaries: JTIs, Technology Platforms,
EUREKA Joint Ventures,…
• Product Ideas: SPV based structures for individual
R&D consortia
• EIB value added: Provide structuring know-how
(Project Financing) and facilitate private sector funding
Financing R&D Consortia
Table of Content
6
1.
RSFF Key Terms
2.
RSFF Implementation Strategy
3.
EIB Financing
RSFF Implementation Strategy
Key objectives
Extend EIB financing to new groups of counterparts through
the introduction of new products
 RSFF Product Development
Collaborate with the Commission on financing FP7 projects
 Synergies with ETPs, EUREKA, ESFRI etc.
Pursue a sector strategy in support of RDI investments in
Collaboration with lead players, platforms and intermediaries.
 RSFF Sector Strategy
Develop co-financing and risk sharing with financial institutions
for small projects / SMEs
 RSFF Facilities
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Generating Projects and Portfolio Building
 RSFF Product Development : rationale for SMEs/ Midcaps
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SFF Financing
(low/sub-investment grade)
for RDI projects
Scarcity of capital is an
obstacle for RDI / growth
Limited debt capacity:
equity gap/volatile cash-flows
Limited access to capital
markets
Consolidation pressure +
internationalisation
Complementary Products
Financing Needs
MidCaps/
SMEs
RSFF
Extend Debt Capacity
Subordinated Debt/Mezzanine
Interest Contingent Loan
Extend Lending Capacity
Risk Sharing Facilities
Co-financing/leverage of
mezzanine funds
RSFF Implementation Strategy
Synergies with ETPs, EUREKA, ESFRI, etc.
BENIFITS
EIB
ROLE
European Technology
Platforms (ETPs)
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Joint Technology Initiatives
(JTIs)
ESFRI

EIB is Privileged Bank in the dialogue for the development of ETPs, JTIs
and ESFRIs

Core potential financier of low/sub-investment grade ETP, JTI, ESFRI
member companies

ETPs provide a wide range of key players for RSFF financing

ETP SRAs (Strategic Research Agenda) provides coherent framework
for RDI financing

EIB can leverage its pan EU focus, sector knowledge, financial
engineering and advisory capabilities to the benefits of ETPs, JTIs and
ESFRIs.
Table of Content
10
1.
RSFF Key Terms
2.
RSFF Implementation Strategy
3.
EIB Financing
EIB Financing – Key terms
General EIB Terms and Minimum Requirements

Maximum loan amount: up to 50% of project cost.

Loan tenors: depending on the “economic life” of the investment
(generally between 10 and 20 years; exceptions).

Interest Rate: Fixed or Variable

Minimum size per loan: > EUR 25m for investment grade financing
> EUR 7.5m under RSFF
< EUR 25m Intermediated Credit Lines
Projects should…
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…be eligible for EIB finance
…be technically sound
…be financially viable
…show accteptable returns
…comply regulations (esp.
environment/procurement)
…have adequate security
General Overview on the EIB
EIB Methods of Operation
Bank Intermediated Loans
Bank Guaranteed Loan
Direct Loan
EIB lends to client’s house bank(s)
passing through its low funding cost.
Credit risk is born by the com. bank.
EIB provides financing directly to the
customer alongside other lenders as
appropriate. Credit risk is born by
the guarantor.
EIB provides financing directly to the
customer alongside other lenders as
appropriate. Credit risk is shared
on an equal basis with other bank(s).
EIB
EIB
Loan
Commercial
Bank(s)
Loan
Guarantee
EIB
Commercial
Bank(s)
Loan
Loan
Commercial
Bank(s)
Loan(s)
Customer
e.g. Global Loan, Framework Loan
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Customer
Customer
The Risk Sharing Finance Facility
What can be financed
ELIGIBLE COSTS
Time
Year 1
€ 20m
Year 2
€ 10m
Year 3
€ 30m
Total
€ 60m
€ 45m
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Eligible project cost include:
• Facilities: project capital expenditures for
tangible assets;
• Activities : project capital expenditures for
intangible assets, research staff cost,
incremental working capital needs and other
related operating expenses.
R&D budgets typically cumulated over 3 years
(investment programme)
MAX. EIB LOAN
Up to 75% of the total project cost.
Thank You !
[email protected]
www.eib.org/rsff
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