Innovative Financial Instruments and Advisory Services · 19/4/2016 Innovation Finance Advisory |...
Transcript of Innovative Financial Instruments and Advisory Services · 19/4/2016 Innovation Finance Advisory |...
1 19/4/2016 Innovation Finance Advisory | European Investment Bank
European Investment Bank
Innovative Financial Instruments and
Advisory Services
Shiva Dustdar
EIB RDI Advisory Services
Berlin, 1 July 2014
Access to Finance for RTOs: preliminary results of EIB
study
Arnold Verbeek
Senior Adviser, Innovation Finance Advisory
9th Plenary Meeting
of the European TTO Circle
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Content
InnovFin Advisory
Access-to-finance for RTOs and their partners
Insights and financing models
Way forward
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Innovation Finance Advisory
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Enable maximum access to finance for innovative projects
Innovation Finance Advisory- What do we do?
Synergies between Project Advisory and Horizontal Activities
Improve framework conditions for
financing
Develop “business case” for new
financing mechanisms in RDI
sectors
Prepare studies on increasing
effectiveness of financial
instruments to address specific
sector/RDI policy objectives
Horizontal Activities Improve bankability/investment
readiness
Enable earlier/ faster access to
finance
Light Project Advisory (LPA)
Project Advisory
Projects Advisory
Transfer of Lessons Learned
Horizontal Activities
Pipeline Development
InnovFin Advisory
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Agri-Food Digital
Economy
Road Transport
Innovative Life
Science
Snapshot of Horizontal Activities portfolio Current portfolio of Horizontal Activities
Bio economy
SET
LPA Circular economy
Financing Pan-EU RI
Web-tool
RTOs IDFF KETs
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Content
InnovFin Advisory
Access-to-finance for RTOs and their partners
Insights and financing models
Way forward
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Background
EARTO/EIB high-level lunch (EARTO President M. Khorsand, EARTO VP Frank Treppe and EIB Senior Delegation chaired by VP A. Fayolle) and workshop with representation of RTOs and EIB/EIF operational staff.
Following the workshop, the EARTO President asked the EIB and DG R&I for a dedicated InnovFin Advisory mandate to develop new funding models for RTOs, also in the context of the EFSI.
This new horizontal activity was approved by the InnovFin Advisory Steering Committee and the advisory mandate kick-started in Q3/2015, in close collaboration with EARTO
April 2015
June 2015
September 2015
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Implementation plan and status
Mid-2016
Summer 2015 and official kick-
off on 23rd September 2015
Bilateral C
on
sultatio
ns w
ith R
TOs Current stage
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Research institutions
Start-ups
Established companies of different size
Universities
1 2
4 3 RTOs
Broader ecosystem
Open ‘ecosystem’ perspective
Spin-outs
Funding agencies
Direct ecosystem Service companies
Suppliers
Governments
InnovFin Advisory
• Assess funding gaps
• Develop funding models
• Finance more open
innovation activities
X
X
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Content
InnovFin Advisory
Access-to-finance for RTOs and their partners
Insights and financing models
Way forward
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Potential funding to support RTOs’ investments
Potential EIB
Support
Direct funding for RTO specific investments and operations
Debt allowed?
Typically used to address liquidity and working capital
considerations
Cannot replace grants in terms of funding of large RDI
investments
Except: Securing other sizable and sustainable income streams (long term rental agreements, longer term license
fees, contract research for several years, training income, off take agreements, etc.)
Y
‘New’ revenue streams require the rethinking of existing and development of
new business models
Contingent loans (repayable under conditions) could be
possible
Joint investments (e.g. through SPVs)
N
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Case: Joint- financing based on long-term rental
agreements
Project promotor: Association of RTOs, local university, … (SPV).
Foreseen investments: Building and development of specialised R&D, testing and demonstration facilities (to be used for industry driven R&D and innovation programs).
Underlying business model: Provide access and knowledge (through the RTOs) to state of the art R&D, testing and demonstration facilities to the industrial partners of the RTOs and university involved.
Cash flow generation: Mainly renting of infrastructure and facilities, contractually guaranteed for a period of 20 years (providing comfort and debt capacity).
Funding mix: app. 50% equity by the partners, 20% public funding (local, EU), 30% bank loan (debt capacity created through long term rental agreement).
InnovFin Advisory to assist project promoter to develop the financing model and prepare for potential due diligence.
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Technology transfer, IP valorisation
Potential EIF
Support
EIF, as part of the InnovFin Advisory mandate, is currently exploring how the funding ecosystem for IP valorisation and technology transfer of RTOs can be strengthened…
Technology transfer, IP valorisation
Need for equity funding for technology transfer (spin-off,
start-up creation)
Less of a funding gap with existing large or medium-sized clients (except in case of larger investments, multipartner, off-balance which require special
solutions)
Development of appropriate equity funding solutions for IP
valorisation (common RTO requirement)
RTOs to utilize knowledge and expertise and become part of the investment assessment process
Knowledge gap with potential investors (on technology/market
potential)
- Educate/train financial market participants- Develop technology/market assessment tools- «Finance gateway »
Use of facilities to further develop ‘proof-of-
concept’
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Preliminary findings from our Advisory Mandate todate….
• Debt and equity (by private investors) not prominent in the RTO ‘funding mix’: grants are, but they are also under pressure (more short-term and more competitive). Need to look at new business models and new financing strategies.
Clear need for equity funding to spin-offs, tech transfers and start-ups: broad mobilisation/
integration of knowledge and capital.
• (Contingent) Loans can partially replace grants if new sizable and sustainable income
streams are secured. Legal framework has to be conducive.
1. RTO funding sources
• The partners of the RTOs can play an important role (as ‘off-takers’). Smaller companies and start-ups (equity funding) face specific challenges. Large or medium-sized clients seem to face less problems (except for high investment volumes and need for special constructions).
2. RTOs and their partners
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Preliminary Findings from our Advisory Mandate todate…
3. RTOs can act as ‘financing catalysts’ as they could: 1) Educate/train financial market participants about technologies
2) Support the development of technology risk assessment methodologies
3) Add credibility to projects/technologies/start-ups
4) Could become a “hub” combining technological/market/financial knowledge in
support of the development and financing of projects or companies
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Content
InnovFin Advisory
Access-to-finance for RTOs and their partners
Insights and financing models
Way forward
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Way forward
1. Continue the bilateral discussions between the EIB/EIF and the RTOs (through
the Working Group with EARTO but also directly)
2. Continue providing bilateral advisory support to selective RTOs with concrete investment plans
3. Further develop potential financing types/strategies, in view of the current EIB instruments, including the possibilities EFSI
4. Consolidation of findings, conclusions, recommendations and reporting
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Shiva Dustdar
Head of Innovation Finance Advisory
Advisory Services Department
Phone: (+352) 4379 87316
eMail: [email protected]
European Investment Bank
3, rue Jean Monnet
L-2180 Luxembourg
Arnold Verbeek
Senior Adviser
Innovation Finance Advisory
Advisory Services Department
Phone: (+352) 4379 82029
Fax: (+352) 4379 52029
eMail: [email protected]
European Investment Bank
3, rue Jean Monnet
L-2180 Luxembourg
Paulina Brzezicka
Junior Advisor
Innovation Finance Advisory
Advisory Services Department
Phone: (+352) 4379 82176
Fax: (+352) 4379 62650
eMail: [email protected]
European Investment Bank
3, rue Jean Monnet
L-2180 Luxembourg
Laura Busato
Advisor
Innovation Finance Advisory
Advisory Services Department
Phone: (+352) 4379 82319
Fax: (+352) 4379 52319
eMail: [email protected]
European Investment Bank
3, rue Jean Monnet
L-2180 Luxembourg
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