1

Western Balkan EDIF

(Enterprise Development and

Innovation Facility)

Support Services Pillar

1 European Investment Bank Group

Trieste, September 21, 2017

The Western Balkans:

- Albania

- Bosnia and

Herzegovina

- The former Yugoslav

Republic of

Macedonia

- Kosovo*

- Montenegro

- Serbia

- (Croatia)

*This designation is without prejudice

to positions on status, and is in line

with UNSCR 1244/ 1999 and the ICJ

Opinion on the Kosovo declaration of

independence)

3

WB EDIF Platform

is coordinated by the EIF and

is comprised of four different and scalable pillars

The entire structure is steered by the Platform Advisory Group (PAG)

whereby WBEDIF investors and the WB beneficiaries are represented

ENIF Enterprise

Innovation Fund

ENEF Enterprise

Expansion Fund

A VC fund focusing on

innovative SMEs,

providing equity and

quasi equity to start-up

to expansion phase

SMEs EUR 40m

Supporting established

SMEs with high growth

potential. Managed by

the EBRD with EUR

50m LEF co-

investment facility EUR 100m

Equity instruments Guarantee

instruments

Lending

instruments

Support Services

Coordinated by EIB Partners and

Investors

Support for WBEDIF

Financial Instruments

Policy level

Support WBEDIF offers

programmes to

support implementing

policy reforms to

foster a favourable

regulatory

environment for SMEs

WBEDIF also offers

complementary support

actions to assist the

deployment of the

financial instruments

on the ground

Guarantees are

provided to banks

to incentivise them

to build up new

SME loan

portfolios

EUR 200m

Guarantee

Facility Competitivene

ss Programme

Dedicated credit

lines for partner

financial

institutions and

complementary

investment

incentives for

SMEs EUR 20m

Western Balkans Enterprise Development

and Innovation Facility (WBEDIF)

Advisory and Support Services Managed and Coordinated by

4

Venture Capital Ecosystem & Pilot Entrepreneurship

Programme Focus area: Venture Capital Contracted with World Bank

EU-REPARIS* Focus area: capacity & institutional building

Contracted with World Bank

EU Small Business Act (SBA) monitoring

Focus area: horizontal monitoring Contracted with OECD

Triple Helix Partnership

Focus area: innovation

Contracted with OECD

Small Business Support (SBS)

Focus area: direct support Contracted with EBRD

EU FUNDING (DG NEAR)

The EU provides funding both to the EIB in their role as manager and coordinator of Advisory and Support Services, as well as via parallel and bilateral initiatives which are

identified as being in line with the strategic objectives and priorities of WBEDIF, as defined by the WBEDIF Platform Advisory Group (PAG)

* Road to Europe – Program of Accounting Reform And Institutional Strengthening

EIB provides overall management, coordination and monitoring as well as targeted advisory and technical assistance support

To boost the commercial potential of innovative SMEs, bringing

together entrepreneurs, public sector researchers, business support

networks, and financial intermediaries throughout the region.

EIB scope of activities

European Investment Bank Group 5

Refinement of

needs / gap

assessment

Delivery of

short-term

actions

Complement the work done on the policy side with the identification of

gaps in the private sector’s needs

Supply and demand side assessment of the SMEs financing gaps in the

Western Balkans

Coordination & Facilitation tasks

Acts as secretariat of the Support Services Working Party (SUPWP)

Monitoring and reporting

Identification of delivery gaps

Management /

coordination

function

Assessment of SMEs financing needs

European Investment Bank Group 6

Refinement of

needs / gap

assessment

Delivery of

short-term

actions

Management /

coordination

function

Scope: assess demand needs and supply gaps in financing of

SMEs in the Western Balkans

Analysis by country and by financial product

Work carried out by EIB economics department and an

external industry expert

Results can be used as a basis for discussion on future

allocations to EDIF financing pillars

Progress to date:

o Selection and appointment of consultant (BFC)

o Methodology finalised and desk research completed

o Country visits finalised

o Final report presented June 2016

The EIB Bank Lending Survey

European Investment Bank Group 7

Refinement of

needs / gap

assessment

Delivery of

short-term

actions

Management /

coordination

function

Conducted by the EIB Economics Department every 6

months

Initially designed in the context of the Vienna initiative

addressing parent banks and their CESEE subsidiaries

Unique harmonized survey to analyze and monitor credit

conditions in the region

Detects supply and demand developments and constraints to

credit extensions, NPL dynamics and a range of clients

including SMEs, international banking groups and 90

subsidiaries, covering 50% of banking assets per country

Next steps

o Allocation of a consultant for continuous analysis and

reporting on Western Balkans

o Expand coverage in FYROM and include Montenegro

PwC PwC

Serbian ex-Ante

Preliminary: There are four identified options to expand

the Serbian SMEs access to finance

Portfolio guarantee

instrument

Microfinance capital

enhancement (equity) fund

Early-Stage Equity Fund -

Seed Fund and Technology

Transfer Fund

The support facility to SMEs

Provide banks with a guarantee

coverage at the portfolio level,

with particular focus on micro-

enterprises

For SMEs currently not having access to

credit: lift existing credit constraints;

For SMEs currently having access to

credit – lower interest rate (thanks to the

risk sharing) and longer maturity;

Principle Benefits Financial instrument

Support, at portfolio level, new

microfinance institutions (set

up once the regulatory

framework is established)

Micro-enterprises currently not receiving

any financing are able to secure external

funding and develop

Equity and quasi-equity to

innovative SMEs at the early

stage of their development. A

technology transfer (TT) facility

could complement it.

Enable creation and growth of innovative

SMEs which could not have occurred

before due to financing constraints

Provide technical assistance,

business knowledge and

advisory services to SMEs,

including micro-enterprises

SMEs would be aware of all the existing

financing opportunities and get help to

tailor their individual financing strategy

and, ultimately, grow.

European Investment Bank Group

European Investment Bank Group 9

Capacity Building for Financial Instruments

MODULE 1: March

2016

Experiences in

developing Financial

Instruments

- Basic concepts and

framework

- Lifecycle, main

stages in

implementation

- State Aid

implications for FIs

- Implementing

bodies, case

studies Slovakia,

Bulgaria

MODULE 2: November

2016

Financial instruments

for SMEs in Serbia

- EIB experience through

JASMINE, JEREMIE,

etc

- Best practice from

Cambridge and

Luxembourg incubators

- EIF SME funds

- Off-the-shelf

instruments

Support Services CURRENT ACTIONS

Intangibles and IP

valuation and

monetization in the

Western Balkans

Feasibility

Study for a

Regional

Centre of

Excellence

Improving Public

to Private Sector

Technology

Transfer – early

stage:

Proof of Concept

European Investment Bank Group 11

Intellectual Property (IP) & Intangibles Monetization

OBJECTIVE:

unlock commercial

potential of intangibles

and IP assets in SMEs,

bringing together

entrepreneurs, IP

professionals, public

sector researchers,

business support

networks and financial

intermediaries

Compare regulatory

environment and market

practices

Investigate monetisation

potential

Establish IP valuation

criteria and tools, arriving at

country-specific best

practice

Create and disseminate

toolkits for managers and

researchers through

Workshops

Provide mentoring

services to selected

SMEs for valuation

of IP portfolio

European Investment Bank Group 12

Criteria to be met by CoE:

Existence of a critical mass of

high level scientists and/or

technology developers

A well-defined structure with

its own research agenda

Dynamic role in the

surrounding innovation system

International visibility and

scientific and industrial

connectivity

Reasonable stability of funding

Feasibility Study for a Regional Centre of Excellence

Study to propose

institution/hub with

highest potential for

Centre of Excellence

based on research

agenda, capacity to

integrate related fields,

industrial connectivity,

visibility and

sustainability

European Investment Bank Group 13

Implementation & Outcomes:

Inception Phase includes best

practice research, set of

excellence criteria, proposing

list of key institutions,

preparing questionnaires and

interviews

Implementation Phase:

conduct interviews in the

region, provide detailed

assessment and

recommendations for

a self sustainable

model with

commercial potential

Feasibility Study for a Regional Centre of Excellence

Target Sectors:

Aimed at sectors with highest

potential for achieving

excellence in R&D and impact

in innovation

CoE supplies services in

technology with a critical mass

of recipients (wide reception)

ICT and Renewable Energy and

Energy Efficiency target sectors,

due to

- priority status in Horizon 2020

- swift transfer to SMEs

- R&D intensive, not expensive

- existing human resources in

……the Western Balkans

16 June 2017

PwC

Western Balkan EDIF

Platform Advisory Group

Regional HEI / PRO initiatives…..

with some basic capacities to create spin-offs and/or support SMEs,

….. in combination with existing plans to become a Centre of Excellence

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Centre of Excellence for the Western Balkans

Serbian Innovation Hub, Belgrade Innovation House, Sarajevo

CAKE, Novi Sad INNOFEIT, Skopje

EUR 50m - EBRD LEF co-investment

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PRE-SEED PHASE SEED PHASE START-UP PHASE EMERGING GROWTH DEVELOPMENT

HIGHER RISK LOWER RISK

Equity products Debt products

EUR 40m – ENIF – Enterprise Innovation Fund

EUR 50m – ENEF – Enterprise Expansion

Fund

EUR 200m - Guarantee Facility

EDIF financial and TA support

across the innovation chain

ED

IF

financia

l

Pill

ars

ED

IF T

A S

up

port

Pill

ar

Triple Helix projects

Investment readiness

Assessment of VC Ecosystem

EU REPARIS

Advice for Small Businesses

Monitoring of EDIF policy reform priorities through the SME Policy Index

Overall coordination of EDIF TA Pillar and delivery of targeted support services actions

Private fund manager as

selected by

Proof of Concept Facility for the Western Balkans?

Addresses funding

gap:

The earliest and most

risky step in the

technology transfer

funding cycle

Provides grants for:

Proof of Concept

IP Protection

Market analysis

Feasibility studies

Business Plans

Development strategy

To be defined:

Size of grants

% of funding provided

Eligibility criteria

Evaluation procedure

Governance structure

Overlap with national

programmes?

The PoC

instrument is

conceived as a

first step in the

construction of a

fully – fledged

Technology

Transfer (equity or

quasi equity)

investment fund

Serbian ex-Ante study estimates funding gap for SMEs ~ 1Beur

Recommends Accelerator Facility with supporting TA (mentorship and fund for product development)

(IP Valuation Report) recommends Funding for patenting costs

National versus regional programmes

Best regional practice: target both SMEs and PROs

• Pilot programme blending grants & mentoring ?

Lessons learned: problems with pipeline/ absorption

capacity

Proof of Concept Facility for the Western Balkans?