Wednesday, 16 July 2014

Enterprise Ireland CEO welcomes launch of ‘InnovFin – EU Finance for Innovators’

EnterpriseIreland CEO Julie Sinnamon has welcomed the launch of a new generation of EU financial instruments and advisory services to help innovative firms access finance more easily.

The agreement with the European Investment Bank Group was signed by European Research, Innovation and Science Commissioner Máire Geoghegan-Quinn, on behalf of the EU in Greece yesterday (12th June 2014).

Julie Sinnamon CEO Enterprise Ireland with European Research, Innovation and Science Commissioner Máire Geoghegan-Quinn discussing how Irish SMEs can access finance for ‘high-risk’ research and innovation activities at Enterprise Ireland’s offices in Dublin today (13th June 2014).

Over the next seven years, it is expected that the "InnovFin – EU Finance for Innovators" products will make available more than €24BN of financing for research and innovation (R&I) by small, medium and large companies and the promoters of research infrastructures. This finance is expected to support up to €48BN of final R&I investments.

Speaking during today’s visit by the Commissioner to Enterprise Ireland which is leading Ireland’s participation in Horizon 2020, the EU’s programme for research and innovation, Ms Sinnamon said;

“Enterprise Ireland welcomes the introduction of the InnovFin financial instruments and associated advisory services. These instruments will complement existing research and innovation funding sources and will provide much needed additional access to finance for innovative Irish SMEs. We now want the Irish banking sector to embrace these new instruments as they will de-risk lending propositions for Irish companies that want to fund R&D in order to gain a competitive edge. This activity is central to boosting employment and growth in Ireland’s economy”.

European Research, Innovation and Science Commissioner Máire Geoghegan-Quinn said:

"Financial instruments provide an innovative way of investing in growth-enhancing companies and activities. The EU lags behind its global competitors in terms of business investment in innovation, so we must encourage banks to lend to these projects and help research-intensive companies get access to this finance. This will help us reach our EU target to invest 3% of GDP in R&D by 2020."

"InnovFin – EU Finance for Innovators" will consist of a range of tailored products – from guarantees for intermediaries that lend to SMEs to direct loans to enterprises - helping support the smallest to the largest R&I projects in the EU and countries associated to Horizon 2020, the new EU research programme for 2014-2020. 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 helped provide over €11BN of finance to 114 R&I projects worth more than €30BN.

The EIB Group consists of the European Investment Bank and the European Investment Fund (EIF). The European Investment Bank will provide loans to medium to larger companies, or guarantees to banks lending to them. The EIF will provide guarantees to banks lending to small and medium-sized firms and – at a later stage – invest in venture capital funds providing start ups and fast-growing firms with equity.

The launch took place at a two-day conference, organised by the Greek Presidency of the EU, to discuss how to improve access to finance for research and innovation.

InnovFin guarantees and loans will be backed by funds set aside under Horizon 2020 and by the EIB Group for the purpose of supporting R&I investment, which by nature is riskier and harder to appraise than tangible investments. All are demand-driven instruments, with no prior allocations between sectors, countries or regions. These debt instruments will be complemented in the near future by a suite of equity instruments managed by the EIF. In total, some €2.7BN of Horizon 2020's near €80BN budget will support these financial instruments.