EIB introduces Risk Sharing Finance Facility
Impressive start for new EC-EIB financial instrument: Risk Sharing Finance Facility (RSFF) contributes EUR 359 million to research and innovation, with strong focus on renewable energy technologies
Luxembourg, Luxemburg – At the European Investment Bank’s annual Forum "Investing in Energy, Mastering Climate Change" in Ljubljana, Slovenia, the European Commission and European Investment Bank announced today the successful introduction of the Risk Sharing Finance Facility (RSFF) – the latest in a series of joint EIB-European Commission initiatives. This innovative financing solution aims at providing strong additional support to research, development and innovation projects in Europe. The first RSFF financing operations focus on renewable energy technologies, a priority lending objective for the Bank in 2007.
EIB President, Philippe Maystadt, and Janez Potočnik, European Commissioner for Science and Research, praised the implementation strategy of RSFF, which prioritises sectors identified as key drivers of excellence in European research and innovation and present significant lead market potential for Europe. In addition to renewable energy technologies, RSFF will benefit biotechnology, engineering, manufacturing and automotive, information and communication technology projects, as well as European research infrastructures.
The first financing operations by the EIB under RSFF concern renewable energy efficiency, automotive, engineering and biotechnology projects. In addition, significant demand is emerging in priority sectors on the Lisbon agenda and the EU’s 7th Framework Programme as well as in European Technology Platforms (ETPs) and Joint Technology Initiatives (JTIs). The principal beneficiaries of RSFF loans will be midcap companies and SMEs, as well as large companies and public/private entities.
The first research and innovation projects selected for support under RSFF include:
- The Andasol Solar Thermal Power (Spain), which concerns two new concentrating solar thermal power (CSP) generation plants with a capacity of 50 MWe each, to be developed in a valley north of the Sierra Nevada;
- The Solucar Solar Thermal Power (Spain), another project in the area of solar thermal power (CSP) generating plants, to be implemented west of Seville, but using a technology different to that of the Andasol project;
- Renewables and Energy Technologies RDI (Spain) for the development of advanced technology in the field of renewable energy, in particular, the production and reforming of bio-ethanol;
- Automotive Energy Efficiency, AVL (Austria), for the development of clean and efficient automotive powertrains, as well as for research on hydrogen fuel cell technology, nanocomposites and engine technologies to increase energy efficiency and to reduce the impact on climate change;
- Automotive Exhaust and Heat System RDI, Eberspächer (Germany) to develop innovative exhaust technology and heating systems for cars and trucks, including research in thermo and flow-dynamics, exhaust gas treatment and noise reduction;
- Automotive Research & Innovation Facility for Midcaps and SMES (Germany) involving an innovative "Technology Leasing" facility, allowing automotive suppliers to finance their RDI activities through the sale and lease-back of their intellectual property rights to Deutsche Leasing, a leading leasing institute in Germany;
- Biotechnology – Zeltia Pharmaceutical RDI (Spain), to finance research activities aimed at strengthening the company’s position in its priority fields of activity, primarily oncology and rare diseases, through the commercialisation of four products targeting different forms of cancer.
The RSFF, an innovative debt-based facility, designed by the European Commission and the EIB, was launched on 5 June 2007. It is part of the EU’s 7th Framework Programme for Research (FP7), and the EIB’s Innovation 2010 Initiative. RSFF creates an additional capacity up to EUR 10 billion of higher risk financing in support of research, technological development, demonstration and innovation activities (RDI). The Commission, via FP7, and the EIB will each contribute up to EUR 1 billion to RSFF which will provide the necessary capital to underpin the expected loans and guarantees by the EIB of several billion Euros.
The EIB will implement RSFF in close collaboration with all major EU national and regional banks, which are providing support to the development of European companies. The RSFF facility will significantly increase the EIB’s value added by sharing part credit risk related to these operations. This will increase the capacity of banks and other financial intermediaries to support research, development and innovation activities.
For additional information on RSFF see: http://www.bei.org/products/loans/special/rsff/index
FIRST PROJECTS SUPPORTED UNDER RSFF
- Andasol Solar Thermal Power (Spain)
The project concerns two new concentrating solar thermal power (CSP) generation plants with a capacity of 50 MWe each, to be developed in a valley north of the Sierra Nevada, some 60 km southeast of Granada. The project consists of a field of parabolic troughs along which a vacuum tube circulates a fluid which heats up to over 400°C.The heat is then used in a heat exchanger to produce power in a vapour turbine.
The implementation of the plants will play an important role in the demonstration and development of solar thermal power technology and is in line with the EU energy policy to promote the use of indigenous renewable energy. The EIB’s long term loan of EUR 120m provided to the Special Purpose Vehicles promoting the projects will contribute to reducing the overall project cost. Through their financial contributions, the EIB, the banking syndicate and the sponsors are giving a strong endorsement of the potential benefit of this technology.
- Solucar Solar Thermal Power (Spain)
The operation concerns the development, construction and operation of two concentrating solar thermal power (CSP) generating plants, one of 11MW and another of 20MW capacities, in Sanlúcar la Mayor, in the West of Sevilla. Although a CSP project like Andasol, it uses a competing technology.
The project, which consists of a field of heliostats (mirrors) to concentrate solar radiation on a tower mounted thermal receiver, will be the first large scale application of this technology in the EU. Similar to the Andasol project, the objective of the projects consists in the large scale demonstration and development of CSP technology. The EIB’s involvement in the form of a long term loan of EUR 50m provided to the Special Purpose Vehicles promoting the projects have contributed to improvements in the terms and conditions upon which the Borrower can finance the investment www.solucar.com
- Renewables and Energy Technologies RDI – Abengoa (Spain)
The RSFF financing supports RDI investments of the Spanish Abengoa group in a range of advanced technology fields, including notably renewable energy technologies related to the production and reforming of bio-ethanol. The group is one of the largest bioethanol producers in Europe. Furthermore, the RDI project involves the development of technologies for the production of hydrogen from renewable sources and uses it in fuel cells for the production of thermal and electrical energy.
The EIB’s long term loan of EUR 49m under RSFF will reinforce Abengoa’s financial capacity to implement its important RDI investment programme.
- Automotive Energy Efficiency – AVL (Austria)
AVL is a leading, family owned technology and engineering specialist focusing on powertrain/engine and related technologies. With approximately 3400 employees and a successful track record of providing cutting-edge technologies for more than 50 years, the company offers research and development support to many major car manufacturers worldwide. AVL has developed several innovative break-through powertrain technologies and has established a strong reputation in fuel saving technologies for powertrain systems. This, combined with the company’s strong network of cooperation partners, should contribute positively to achieving the European objectives of higher energy efficiency and lower CO2 emissions from transport.
As a leading coordinator of the European Technology Platform for Embedded Systems (ARTEMIS) AVL is also an important enabler for the industry, notably in the areas of energy efficiency and emission reduction. The EUR 30m EIB loan will support the development of clean and efficient automotive power trains, decreasing emissions and reducing the impact of transport on climate change.
The project also involves research in the areas of hydrogen fuel cell technology, nanocomposites and engine technologies improving energy efficiency www.avl.com
- Automotive Exhaust and Heat System RDI – Eberspächer (Germany)
A further RSFF loan was extended to RDI investments in exhaust technology and heating systems for cars and trucks. The investments specifically concern the field of thermo and flow-dynamics, exhaust gas treatment and noise reduction strategies, as well as the development of technologies for the use of alternative, regenerative fuels for heating purposes to be applied in mobile and domestic heating systems or for thermal destruction of pollutants. The EUR 30m EIB loan with its long tender will increase Eberspächer’s capacity to invest in its medium and longer term innovation programme www.eberspaecher.com
Other RSFF Loans
The remaining financings under RSFF to date concern the engineering, automotive and biotechnology sectors:
- Automotive Research & Innovation Facility for Midcaps and SMES (Germany)
This involves a first risk sharing facility with a German bank and a leasing company for the financing of RDI investments of SMEs and Midcaps. This facility involves a guarantee scheme under which the EIB will cover up to 50% of the intermediary’s funding participation in each RDI project meeting pre-defined criteria. The innovative aspect of the facility lies in the use of "Technology Leasing", under which automotive suppliers can finance their RDI activities through the sale and lease-back of their intellectual property rights (IPRs) to Deutsche Leasing, a leading leasing institute in Germany.
- Biotechnology – Zeltia Pharmaceutical RDI (Spain)
The operation concerns the financing of the RDI activities of PharmaMar, the biopharmaceutical company of the Spanish Zeltia group. The R&D activities financed are aimed at strengthening the company’s position in its priority areas, primarily oncology, through the successful commercialisation of four products targeting different forms of cancer that are currently under development. The company is particularly R&D intensive and focuses on rare or orphan diseases, constituting smaller and therefore less attractive markets for the larger pharmaceutical companies. The EIB’s loan of EUR 30m provides for additional longer term financing, enabling the company to conclude the next step of the medicines development process www.zeltia.com