France: First financial transaction under the Investment Plan for Europe
12 May 2015
The European Investment Fund (EIF), the arm of the EIB Group specialising in risk capital instruments, risk financing for small and medium-sized enterprises (SMEs) and innovation, and Bpifrance, the French public investment bank, have signed a financial agreement to increase lending to innovative SMEs and mid-caps in France thanks to the guarantee financed from the EU budget under the European Fund for Strategic Investments (EFSI). The European Commission (EC) and the EIB Group will deploy the Investment Plan for Europe (IPE) via EFSI.
This is the first financial transaction in Europe to benefit from an EU guarantee under EFSI. The transaction, which is taking place before EFSI is formally established, reflects the EIB Group’s commitment to responding swiftly to calls from Member States, the Commission and the European Parliament for the urgent launch of concrete initiatives under EFSI to accelerate the implementation of lending and guarantee transactions and to boost jobs and growth in the EU.
This new agreement between the EIF and Bpifrance will enable the latter to help finance innovative businesses in France for a total amount of EUR 420m over the next two years. This operation under EFSI will enable the EIF to accelerate the deployment of resources earmarked for funding highly innovative businesses under the Horizon 2020 programme's InnovFin – EU Finance for Innovators initiative by offering better financing terms.
Bpifrance has thus created two new financing tools that will enable loans to be provided for French firms with an EIF guarantee covering two key sectors and offering increased exposure to risk:
The EUR 320m Prêt Innovation (PI, or Innovation Loan), which is 50% guaranteed by the EIF, will facilitate the industrial launch and marketing of innovations introduced by SMEs and midcaps (with fewer than 500 employees) for ticket prices of up to EUR 5m.
The EUR 100m Prêt Amorçage Investissement (PAI or Seed Capital Loan), which is 40% guaranteed by the EIF, will make it possible to strengthen the financial structure of young businesses that are raising funds from experienced investors and to support them in their development by providing them with additional finance of up to EUR 500 000.
Emmanuel Macron, Minister for the Economy, Industry and Digital Affairs, stated: "The launch of this project shows that the Investment Plan for Europe is making progress and that France is mobilising its resources. The Plan for Europe will enable more investment to be financed, more rapidly, for riskier projects. The project promoters must mobilise their resources to take full advantage of this new tool."
Commenting on the signing of the deal, Jyrki Katainen, European Commission Vice-President for Jobs, Growth, Investment and Competitiveness, said: “The Investment Plan for Europe is a top priority for the European Commission. It aims to mobilise EUR 315bn of additional investment within the EU by 2018. I am very pleased that today sees the signing of the very first deal under the Investment Plan. Thanks to the combined support of the European Fund for Strategic Investments and the Horizon 2020 programme, significant additional finance will be made available to innovative companies – SMEs, start-ups but also small mid-caps – in France. This operation paves the way for more jobs, growth and innovation in Europe."
Carlos Moedas, European Commissioner for Research, Science and Innovation, said:
"In addition to the EUR 315bn Investment Plan providing support for innovation and SMEs, InnovFin instruments under the Horizon 2020 programme are to raise EUR 48bn for investment in research and innovation. The signing of the operation between the EIF and Bpifrance is a perfect illustration of how EFSI and InnovFin complement and reinforce each other but also of how they help innovative companies to start their business, invest, grow and create jobs, in France and elsewhere in the European Union."
EIB Group Vice-President Ambroise Fayolle said: "This transaction is the first in Europe under the Investment Plan for Europe. The EIB Group has honoured its commitment: to be operational even before EFSI is officially launched. Innovation and support for businesses are essential to the growth and competitiveness of the French economy. By providing guarantees against the risk inherent in this type of financing, the EIB Group aims to act as a key partner for France’s innovative firms and start-ups both nationally and in the heart of the regions – a strike force that will be all the more powerful thanks to the support of our partners!”
EIF Chief Executive Pier Luigi Gilibert stated: “I am pleased to be signing the first EFSI agreement in Europe here in Paris with Bpifrance. In line with the Investment Plan for Europe, the EU guarantee will enable us to support more innovative businesses under the InnovFin programme in a shorter time than previously planned and therefore to boost Europe’s competitiveness."
For Caisse des Dépôts Group CEO Pierre-René Lemas"The signing of this agreement demonstrates the commitment and crucial role of the national development banks and financial institutions in the deployment of the Investment Plan for Europe. All the constituents of the Caisse des Dépôts Group have mobilised to ensure that it will be a success and that the implementing conditions are as operational as possible."
Bpifrance CEO Nicolas Dufourcq stated: "The Innovation and Seed Capital Loans will be accessible to French firms as from 15 May 2015. This ability to rapidly implement the Juncker Plan confirms Bpifrance's key role in encouraging innovation and as a trusted partner of the EU institutions."
The European Investment Bank (EIB) and the European Investment Fund (EIF) see a clear acceleration in European financing aimed at Dutch SMEs. In the years between 2018 and 2020 around €3 billion was made available through intermediary banks and funds in The Netherlands. This European financial injection made sure that, thanks to a leverage effect through the intermediaries, a total of approximately €12.5 billion of financing was allocated to Dutch SMEs.
The European Investment Bank Group (EIB Group), comprising the European Investment Bank (EIB) and the European Investment Fund (EIF), financed loans, guarantees and equity commitments in Slovakia totalling €211 million in 2020.
The European Investment Bank Group (EIB Group) provided €530 million in loans, equity and guarantees to clients in Croatia in 2020. The two parts of the EIB Group, the European Investment Bank (EIB) and the European Investment Fund (EIF), invested €342.5 million and €187.9 million, respectively, making 2020 a record year for the EIF in Croatia.