SMEs IN HORIZON 2020
Brussels, 18 October 2013
Horizon 2020 Financial Instruments
Access to Risk Finance under the EU Framework Programme for
Research and Innovation 2014-2020
Ignacio Puente González
DG Research and Innovation, RTD-C.3 Financial Engineering Unit
Research and
Innovation
HORIZON 2020 "Access to Risk Finance"
o
Part of the Horizon 2020 budget (3.69%)* will not be provided
through grant funding but in the form of risk-sharing (for loans and
guarantees) and by providing risk finance (equity)
o
Around EUR 2.725 billion in total (net of administrative costs) for
market-driven financial instruments
o
Leverage effect: to attract additional finance and multiply HORIZON
2020 budget resources
o
Addressing financing gaps: Intervention only if there are financing
gaps in the R&I delivery chain (e.g. due to high risk)
o
Building a bridge from R&D to Innovation: Effective and costefficient way to complement grant funding under Horizon 2020 and
translate R&D results to the market
* Actual figure for the budget after the Council/EP/COM negotiations of July 2013;
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to be confirmed
Not legally binding
Principles and Implementation
o Continue and refine proven facilities that have supported R&I in
2007-2013: RSFF, RSI, GIF-1
o Continue to run facilities in a demand-driven way(no earmarking;
"first come, first served"), coupled with targeted awareness-raising
o Encourage top-up funding to target sectors/policies
o Keep focused on attracting private investments
o As now, implementation via entrusted entities (EIB/EIF)
(NB exploratory talks with other institutions)
o As before, select financial intermediaries through
open calls for expressions of interest
o Complementarity with other EU's Financial Instruments, i.e. COSME
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Not legally binding
HORIZON 2020: "Access to Risk
Finance" (sub)programme
o Objectives: Facilitate access to finance for:
 (1) RDI-driven/ innovative SMEs & small midcaps; and
 (2) Ambitious RDI projects carried out by a variety of
recipients (companies, universities, research centres etc.)
o Aim: At least 30% of the budget to serve R&I-driven SMEs and
small midcaps
o One Debt instrument; one Equity instrument;
Accompanying measures
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Not legally binding
What does "Access to risk finance" mean
in the Horizon 2020 context ?
Using part of the Horizon 2020 budget to stimulate more
investment in research and innovation not through grants but
in the form of Financial Instruments:

o
Debt finance
 Loan finance, i.e. risk-sharing loans to companies and for
innovative projects introducing new technologies
 Guarantees to financial intermediaries (commercial and
development banks) that provide loans to research- and
innovation-driven SMEs and small mid-caps
o
Equity finance
 Equity, i.e. venture capital for newly created companies exploiting
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R&D results
Not legally binding
HORIZON 2020 Financial Instruments
o Debt finance:
 Loans and guarantees for investments in Research &
Innovation; demand-driven; targeted at midcaps and larger
companies, research bodies and stand-alone projects; ("RSFF
II")
 Guarantee facility for research-intensive and innovative SMEs &
small midcaps ("RSI II")
 SME Initiative (under development, called by the June
European Council): Joint Guarantee Instrument/ Securitization
for loans to (innovative) SMEs and small midcaps; joint
approach involving European Structural & Investment Funds
(ESIF), HORIZON 2020 and COSME, with crucial support from
EIB Group and Member States
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Not legally binding
SMEs and Small Midcaps
Who or what is eligible for a loan?
o
Loan is for investments in R&D or innovation with significant
technology or application risk
or
o
Loan is to a "fast-growing" enterprise
(meaning >20% p.a. in growth or employees over last 3 years)
or
Loan is to an "enterprise with significant R&D or innovation
potential" — which means what, practically?
o
 Catalogue of criteria — just one must be met …
* Actual criteria, subject to fine-tune
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Not legally binding
"Enterprise with significant R&D or
innovation potential"
o
Expenditure in innovation in last balance-sheet is at least 20% of
loan volume
o
At least 90% of loan is earmarked in business plan over next 2
years for R&D/innovation expenses or investment
o
Firm awarded grants, loans or guarantees from EU or national
R&I support schemes within last 2 years
o
Firm awarded an innovation prize within last 2 years
o
Firm registered a patent within last 2 years
o
Firm has been invested in by high-tech VC fund
o
Firm is based in science, technology or innovation park
o
Firm received tax benefits linked to RDI investment within last 2
8
years
Not legally binding
RSI - Financial Intermediaries (up to now)
N°
Financial Intermediary
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2
3
4
5
6
7
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10
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Unicredit Bank Austria
Ceska Sporitelna (Erste)
ABN Amro
Bankinter
AIB
Banco Popolare (joint application - 2 FIs)
Cassa Di Risparmio di Cento
Deutsche Bank
Komerční banka
BPI
Bank Pekao
BPCE (joint application - 17 FIs)
Credito Valtellinese Group (joint
application - 4 FIs)
Raiffeisen Leasing Polska
Halkbank
Bpifrance financement
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Country
Austria
Czech Republic
Netherlands
Spain
Ireland
Italy
Italy
Germany
Czech Republic
Portugal
Poland
France
Italy
Poland
Turkey
France
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Not legally binding
HORIZON 2020 Financial Instruments
o Equity finance:
 Early stage finance for innovative enterprises - notably seed and
start-up companies, growth-stage also possible. ("Successor to
GIF-1")
 Pilot facility for technology transfer (under development) to
bring R&D results from public research organisations and
universities to the market
o Implementation of the guarantee facility (debt) and the equity facility
will be made in co-operation with COSME financial facilities for
SMEs
o Accompanying measures:
 Technical and financial assistance (of EIB); improving investor-readiness
of start-ups, SMEs and small midcaps; piloting co-investment by
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Business Angels; prizes for best practices in R&I finance etc.
Not legally binding
More information
o Horizon 2020 Financial Instruments
 RSFF
http://www.eib.org/products/rsff/
 RSI
www.eif.org/what_we_do/guarantees/RSI/index.htm
o EU Access to Finance
 Specific portal
www.europa.eu/youreurope/business/index_en.htm
o Horizon 2020
 General portal
http://ec.europa.eu/research/horizon2020/index_en.cfm?pg
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=home&video=none
Not legally binding
Thank you very much
for your attention!
RSFF
• Innovative loan facility co-developed by the Commission
and the EIB; FP7 budget support (EUR 1 billion) for risksharing
• Operational since 2007 and available until the end of 2013
• Loan finance for Research, Development, Demonstration
and Innovation in EU Member States and FP7 Associated
Countries
• Demand-driven; projects supported on a “first come, first
served” basis
• Very successful: Loans of EUR 8.8 billion for more than 90
projects in 23 countries (EU Member States and Associated
Countries)
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RSI
• Guarantee facility under the RSFF for research-driven and/ or
innovative SMEs and small midcaps (up to 499 employees)
• Pilot scheme (2012/2013) to test guarantees and counterguarantees for loans/ leases for RDI investments;
• Implemented by the European Investment Fund (EIF); FP7
budget support to RSI for risk-sharing: EUR 270 million
• Significant leverage effect expected: Approximately EUR 1.125
billion of EIF guarantees and total loans and leases of EUR 2.25
billion for the period 2012-2015
 Important to know: RSFF and RSI are the "blue print"
for the future loan and guarantee Financial
Instruments of Horizon 2020
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Not legally binding
RSI - Financial Intermediaries (up to now)
As of 27 September 2013
 25 applications + 4 requests for increase
 27 for the direct guarantee
 2 for the counter guarantee
 11 countries in the pipeline so far… (more to come!)
 16 guarantee contracts signed
 with Financial Intermediaries from 11 countries
 for total guarantee amount of EUR 860 million
 total loan/lease Volume of EUR 1.76bn available to innovative
businesses in 11 countries
 10 applications covering 3 additional countries approved by the Board & to
be signed before year end
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