Risk Sharing Finance Facility (RSFF) EIB instruments for local and regional authorities / EIB and the EU 2020 Strategy Risk Sharing Finance Facility (RSFF) Marc D’hooge DG Regio Open Days, Brussels, 6 October 2010

Low/Sub Investment Grade DG Regio Open Days, Brussels, 6 October 2010 A brief reminder … RSFF : a EUR 10 bn Risk Sharing Finance Facility EIB RSFF funds complement other sources of debt capital available for low/sub investment grade RDI intensive entities EIB RSFF funds are well suited to potential beneficiaries because: Share risk on highly attractive terms & conditions (EIB’s costs and not-for-profit risk pricing) Long maturities of up to 10 years with longer for Research Infrastructure Direct EIB participation of up to EUR 300m per transaction (depending on loan grading) Strong technology/industry expertise Signalling Effect: EIB as a quality stamp Debt and Mezzanine Debt Product Own Resources EUR 1bn EUR 1bn EIB (RSFF) 2007 - 2013 Approx. EUR 10bn Debt Financing Banks Investors Final Beneficiaries Low/Sub Investment Grade DG Regio Open Days, Brussels, 6 October 2010

European Investment Bank EIB & EIF in support of the entire RDI value chain 1 Risk Capital 2 CIP Resources (SME) 3 RSFF (SME / MidCap) 4 Investment Loans Facility: High Growth Innovative SME Scheme (GIF), Ecotech Purpose: IP financing, technology transfer, seed financing, investment readiness Target Group: VC Funds, Business Angels EIF Product: Fund-of- Funds CIP Guarantee schemes Growth financing for SMEs Formal VC Funds, CLOs SME guarantees (loans, microcredit, equity/mezzanine, securitisation FP7 RSFF RDI financing SMEs/MidCaps, Banks, PE Investors (sub- investment grade) Loans (incl. Mezzanine), Funded Risk Sharing Facilities with Banks (Investors) FP7 RSFF Investment Loans RDI financing MidCaps/Large Corporates/Public Sector Entities (investment grade) Loans, Guarantees Bank Loans and Guarantees Formal VC Funds Seed/Early Stage VC Funds Business Angels Entrepreneur, friends, family EIF EIB Seed / Start-Up Phase Emerging Growth Phase Development Phase Later Stage Counterparts DG Regio Open Days, Brussels, 6 October 2010

Risk Sharing Finance Facility Results 2007 – To Date Target 2,145 RSFF Loan amount (in EURm) and number of RSFF Operations Approved/Signed/Disbursed 2010 RSFF Signature Target: EUR 2,145m (37% achieved to date) DG Regio Open Days, Brussels, 6 October 2010

RSFF Signatures to end September 2010 Breakdown by Sector and Country Signed RSFF Projects by Sector Signed RSFF Projects by Country Main sectors financed so far :life science engineering industry and renewable energy technologies. By end September 2010 operations signed in 20 countries. DG Regio Open Days, Brussels, 6 October 2010

Effectiveness Target group distribution DG Regio Open Days, Brussels, 6 October 2010

DG Regio Open Days, Brussels, 6 October 2010 Risk Sharing Finance Facility – Europe 2020 Mid Term Review Main Conclusions, Prospects and Next Steps The first phase of RSFF (2007-2009) has now been successfully implemented and exceeds initial targets. Loans amounting to EUR 7.1bn (71% of total RSFF Facility) have been approved for projects in 21 countries and loans of EUR 4.6bn (46% of total RSFF Facility) have been signed for projects in 20 countries RSFF business pipeline of EUR 2.0-2.5bn in prospect for each of the years from 2010 to 2013. Subject to the decisions of Parliament and Council on the results of the current Mid-Term Review and the related decisions of EIB, the second phase will be characterised by: A selective deepening and widening of RSFF. Development of new RSFF products by EIB in collaboration with EC. DG Regio Open Days, Brussels, 6 October 2010

DG Regio Open Days, Brussels, 6 October 2010 Risk Sharing Finance Facility – The “Regions” Angle The need for new regional smart knowledge policies Need to address competitiveness gaps across EU MS and regions, particularly for those countries confronted with large public deficits (which usually puts pressure on RDI expenditure) Need to recognise the under-exploited opportunities for smart, local knowledge specialisation. No « one size fits all » scheme, but tailored RDI investment strategies Need for EU wide scheme that strengthens links between high regional performers in research, innovation and entrepreneurship, and promote the evolution of regional specialisation based on the growth of young innovative firms, based on diversity Make the provision of structural funds for RDI conditional upon delivery of a local, smart and open specialisation strategy. DG Regio Open Days, Brussels, 6 October 2010

DG Regio Open Days, Brussels, 6 October 2010 A Risk Sharing Finance Facility for “Regions” Some constructive thoughts Both DG REGIO and MS are committed to expansion of use of revolving and other structured instruments in the next programming period. Question mark: soft incentives or some form of compulsion ?? Make the RSFF EC Contribution a revolving mechanism, and increase it substantially for its post-2013 phase, for instance also with a contribution from Structural Funds for well-designed local, smart and open specialisation strategies In the light of the EU 2020 objectives for sustainable development, use RSFF as additional debt source for grant funding at Community level, to add a specific economic prioritisation – mid- to long-term income generation capacity – as a key to unlocking growth and competitiveness potential DG Regio Open Days, Brussels, 6 October 2010

DG Regio Open Days, Brussels, 6 October 2010 A Risk Sharing Finance Facility for “Regions” Some constructive thoughts Establishment of RSFF Facility dedicated to Cohesion and Convergence Regions. Scale up of programme requires a higher share of EC risk coverage than in current programme. Possible pilot programme in 2011-2013 Based on experience with existing programmes (e.g. JEREMIE), development of new forms of public-private Risk Sharing Financial Facilities to meet RDI needs in regional development areas, also for Research Infrastructures projects, blending Structural Funds and risk based financing resources from EIB and other investors or intermediaries DG Regio Open Days, Brussels, 6 October 2010

European Investment Bank Contact Details Marc D’hooge RSFF Programme Manager Phone: (+352) 4379 87211 Fax: (+352) 4379 67292 email: dhooge@eib.org European Investment Bank 100, boulevard Konrad Adenauer L-2950 Luxembourg DG Regio Open Days, Brussels, 6 October 2010