United Kingdom: £184 million EIB backing for Northern Powerhouse Investment Fund
- Feb 22, 2017
The British Business Bank has today launched its £400m Northern Powerhouse Investment Fund (NPIF), aimed at boosting the North of England’s economy and helping the region’s businesses realise their growth potential. The EIB will provide £184 million for the new Northern Powerhouse Investment Fund.
The British Business Bank has today launched its £400m Northern Powerhouse Investment Fund (NPIF), aimed at boosting the North of England’s economy and helping the region’s businesses realise their growth potential. The European Investment Bank will provide £184 million for the new Northern Powerhouse Investment Fund.
The British Business Bank’s recent Spotlight: The Northern Powerhouse Investment Fund publication reported that the North contributes £350bn per year in GDP – close to one fifth of the UK economy. The new fund aims to build on this foundation by providing smaller businesses with increased choice of funding and producing greater levels of investment across the Northern Powerhouse region.
Jonathan Taylor, European Investment Bank Vice President, said: “The Northern Powerhouse Investment Fund will unlock the unparalleled innovation, talent and entrepreneurial spirit of the North and build on the world class strengths of the region. The European Investment Bank is pleased to provide more than £184m for this exciting new initiative as part of our commitment to support investment by small business across Europe.”
Based in Sheffield, the Northern Powerhouse Investment Fund will work with 10 Local Enterprise Partnerships (LEPs), combined authorities and Growth Hubs, as well as local accountants, fund managers and banks, to provide a mixture of debt and equity capital to northern-based SMEs at all stages of their development. NPIF will provide funding to fund managers who will offer Microfinance (£25,000 - £100,000), Business Loans (£100,000 - £750,000) and Equity Finance (up to £2m).
The fund managers appointed to manage the Northern Powerhouse Investment Fund are:
- Microfinance: Business Finance Solutions, Finance for Enterprise & Business Enterprise Finance
- Business Loans: FW Capital and Enterprise Ventures
- Equity Finance: Maven Capital Partners and Enterprise Ventures
Initially announced in November 2015, NPIF combines capital allocated to the 10 LEPs in the North West, Yorkshire and Humber and the Tees Valley by the European Regional Development Fund (ERDF), a loan from the European Investment Bank (EIB), funding from the Department for Business, Energy and Industrial Strategy (BEIS) and an additional loan from British Business Finance Limited, a British Business Bank group company.
This comes just weeks after the launch of the Industrial Strategy Green Paper, which outlined the Government’s ambitious plans to build on the UK’s strengths and create an economy that works for everyone: delivering high-skilled, well-paid jobs and creating the conditions for competitive, world-leading businesses to prosper and grow right across the UK.
Keith Morgan, CEO at British Business Bank, said: “The North of England has a long and proud history of driving global innovation and economic progress. The region has more high-growth businesses than London and, at close to one fifth of UK GDP, is larger than the economies of Greece, Denmark, Austria and Belgium.
“The region has enormous untapped economic potential that can be realised by improved funding options and opportunities. The Northern Powerhouse Investment Fund represents a co-ordinated policy approach to help realise this potential across the North.”
Andrew Percy, Northern Powerhouse Minister, said: “Our efforts to build the Northern Powerhouse are delivering real results for local people, with over one million businesses involved, foreign direct investment up by a quarter and 187,000 jobs created in the past year alone. This dedicated £400m will help us go even further, supporting smaller businesses across the region to reach their full potential and helping to create an economy that works for everyone.”
Roger Marsh, OBE Chair of the Leeds City Region Enterprise Partnership (LEP) and Chair of the NPIF Strategic Oversight Board, said: “The North already boasts a diverse, dynamic and thriving economy with enormous untapped potential that, when realised, will bring huge economic benefits to the region and the UK’s competitiveness.
“This increased investment will complement the business support activity already delivering jobs and growth in the region. It offers SMEs increased flexibility in the funding available and will help boost business growth, create more high quality jobs and increase innovation.”
The project is supported financially by the European Union. Attracting investment from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.