• First InnovFin Midcap Guarantee in Belgium
  • Up to EUR 400 million loans for innovative firms in Belgium
  • Midcaps benefit from increased credit granting by KBC Bank

The European Investment Bank (EIB), the EU bank, is willing to make available substantial support for midcap companies in Belgium. Innovative corporate and midcap companies with up to 3 000 employees will be eligible for the first “InnovFin Midcap Guarantee” transaction in Belgium, for which the EIB is providing a guarantee of up to EUR 200 million. KBC Bank will rely upon this programme to provide new loans, especially to corporate and midcap customers undertaking research and development investments.

This new financial instrument is based on risk sharing and aims to create more growth and competitiveness in Europe. It enables the EIB to provide a 50 percent credit risk guarantee to the intermediary financial institution – KBC Bank in this case. The new guaranteed loans will be granted by KBC Bank to innovative corporate and midcap companies for an amount of up to EUR 400 million of lending. The 50% guarantee will therefore enable KBC Bank to increase its lending capacity to this customer segment.

The European Commission is supporting the financing operation under the EU’s new R&D framework programme, “Horizon 2020”. Companies active in the research and development field will in particular be provided with reliable long-term financing. The EIB guarantee will cover up to 50 percent of individual investment costs with a cap of EUR 25 million per project. KBC Bank will complement the loans per project to the tune of at least the amount of the EIB guarantee.

EIB Vice-President Pim Van Ballekom emphasised the strengths of the new InnovFin MidCap Guarantee: “This new instrument allows for more risk taking when investing in innovation. As such, it gives the EIB intermediaries such as KBC Bank the opportunity and freedom to finance a broader spectrum of much-needed projects. We count on such a measure to boost innovative Midcaps financing and strengthen them. This allows us to contribute significantly to growth and increased competitiveness in Europe in the medium and long terms. At the same time, this new instrument will enable the participating banks to respond to firms' financing needs more quickly and with more flexibility.

Wim Eraly, Senior General Manager Corporate Banking KBC Bank, welcomes the agreement with the EIB: “The InnovFin programme is fully in line with KBC’s overall client-centric vision and strategy, Innovative midcaps and corporate companies will now gain access to sufficient financial resources to boost new business developments and research capacity through KBC.  At the other end of the customer segment, KBC also nurtures start-ups in the earliest phase of their business. KBC’s unique Start it @ KBC initiative provides them full support and guidance while at the same time facilitating access to crowdfunding and other instruments. Moreover, KBC already collaborated with the EIB in the past to offer attractive financing resources to SMEs in Belgium. With the InnovFin programme, KBC is now able to also offer a flexible answer to the specific financing needs of innovative midcap and corporate customers. Therefore, KBC can offer innovative companies tailored solutions in every step of their business lifecycle”

The KBC Bank facility is supported by the “InnovFin – EU Finance for Innovators” MidCap Guarantee instrument, with the financial backing of the European Union under Horizon 2020. InnovFin is a new range of EIB Group products designed to facilitate access to finance for innovative businesses.

Background information:

InnovFin financial products

Under Horizon 2020, the new EU research programme for 2014-20, the European Commission and the European Investment Bank Group (EIB and EIF) have launched a new generation of financial instruments and advisory services to help innovative firms access finance more easily. Over the next seven years, "InnovFin – EU Finance for Innovators" will offer a range of tailored products which will make available more than EUR 24bn of financing support for research and innovation (R&I) by small, medium-sized and large companies and the promoters of research infrastructures. This finance is expected to support up to EUR 48bn of final R&I investments.  

InnovFin builds on the success of the Risk-Sharing Finance Facility developed under the seventh EU framework programme for research and technological development (FP7), which financed 114 R&I projects to the tune of EUR 11.3bn and in addition provided loan guarantees worth over EUR 1.4bn. 

Backed by funds set aside under Horizon 2020 and by the EIB Group, InnovFin financial products support R&I activities, which by their nature are riskier and harder to assess than traditional investments, and therefore often face difficulties in accessing finance. All are demand-driven instruments, with no prior allocations between sectors, countries or regions. Firms and other entities located in EU Member States and Horizon 2020 Associated Countries will be eligible as final beneficiaries. These debt instruments will be complemented in the near future by a suite of equity instruments managed by the EIF.  

InnovFin MidCap Guarantee provides guarantees and counter-guarantees on debt financing of up to EUR 50m, in order to improve access to finance for innovative midcaps (up to 3000 employees) which are not eligible under the InnovFin SME Guarantee. This will be rolled out through financial intermediaries such as banks and other financial institutions. Under InnovFin MidCap Guarantee, financial intermediaries will be guaranteed against a portion of their potential losses by the EIB.