FORMO (IEU GT2)

The project will finance the promoter's research and development (R&D) activities and production capacity expansion related to substitutes of dairy and egg products based on precision fermentation.

The aim is to contribute to deploy more sustainable animal-free cheeses using protein exudates from fungi. The project supports the Bioeconomy sector and is in line with the Invest EU Main Priority Areas (MPPA) under the Research, Innovation, and Digitisation Window (RIDW).

The operation finances FORMO's RDI programme and technology scale-up in the field of precision fermentation and microfermentation for cheese and egg alternatives. The project will be developed in the EU between 2025-2027 and aims at developing a technology that can progressively replace conventional dairy and egg products. An increasing share of consumers value animal welfare and production sustainability and are willing to incorporate these products into their diets.

In line with the EU policy objectives of the Farm-to-Fork strategy, the project addresses the market failure of sub-optimal delivery of natural-resource efficient products by competitive markets, while generating positive externalities with clear impacts on climate change mitigation and biodiversity.

The proposed financing is a quasi-equity investment, which provides the company with additional financial flexibility to scale-up. The proposed financing provides diversification and stability to the borrower's financing by providing alternative funding sources. The company can benefit from a longer bullet-equivalent tenor and flexible availability period compared to what available in the market.

The project is in line with the InvestEU objective of Bioeconomy of the Green Transition Schedule under InvestEU. The level of risk this operation is expected to be in excess of the risk capacity the EIB could take using its own resources. The operation could not be executed without the strong EU First Loss Piece support provided by the Green Transition Thematic product. 

The project primarily concerns investments in R&D and capital expenditures that are not specifically mentioned under the Environmental Impact Assessment (EIA) Directive 2011/92/EU (as amended by 2014/52/EU) and that are expected to be carried out in existing facilities without changing the already-authorised scope; it would therefore not require an EIA under the Directive 2011/92/EU as amended. The environmental details of the project will be reviewed by the Bank's services during the project appraisal.

The promoter has been assessed by the EIB as being a private company not being subject to EU rules on public procurement or concessions. However, if after the project appraisal, the EIB were to conclude that the promoter is after all subject to EU public procurement legislation Directive 2014/24/EU, then the EIB requires the promoter to ensure that contracts for the implementation of the project will be tendered in accordance with the relevant applicable EU procurement legislation Directives 2014/24/EU as well as Directive 89/665/EEC, as interpreted by the Court of Justice of the EU, with the publication of tender notices in the Official Journal of the European Union, as and where required.