EIB Financing of the Water Sector: Funding Opportunities for SMEs during 2014 – 2020 FinnoWater and SME Financing Infoday Brussels, 24 January 2014 24/01/2014 1 European Investment Bank Group
EIB Financing of the Water Sector:
Funding Opportunities for SMEs
during 2014 – 2020
FinnoWater and SME Financing Infoday
Brussels, 24 January 2014
24/01/2014 1 European Investment Bank Group
24/01/2014
• The EU’s bank, set up in 1958 by the Treaty of Rome.
• Shareholders: 28 Member States of the European Union.
• Providing long-term financing and expertise for sound and sustainable
investment projects to implement EU policy.
• Largest multilateral lender (EUR 52.2 bn in 2012) and borrower (EUR
71 bn in 2012) in the world.
• More than 400 projects each year in over 160 countries
• Some 90% of lending is inside the EU
• Public and private clients
The EIB at a glance
24/01/2014
6 priority objectives:
• Economic and social cohesion
• Support for small and medium-sized enterprises (SMEs)
• Environment and sustainable communities [water sector]
• Innovation and skills [RDI]
• Development of trans-European networks (TEN-T, TEN-T, TEN-Tele)
• Sustainable, competitive and secure energy
The EIB: supporting EU policy goals
The EIB capital increase
Exceptional response
for sustainable growth & jobs
24/01/2014 4 European Investment Bank Group
EIB new EU growth and jobs initiatives
24/01/2014 5
Innovation and Skills
up to EUR 15bn
SME Access to Finance
up to EUR 15bn
Resource Efficiency
up to EUR 20bn
Strategic Infrastructure
up to EUR 15bn
Promote RDI,
training and
education
Maintain strong
emphasis on
Climate action
Improve
employment
opportunities
Strengthen the
internal market /
support cohesion
European Investment Bank Group
24/01/2014
EIB financing can cover investment in the entire water cycle.
Key aspects of EIB lending policy in the water sector:
• River basin approach (Integrated Water Resource Management)
• Sector development and consolidation
• Climate change: adaptation
• Water efficiency
• Additional supply requirements
• Wastewater and sanitation services
• Research and innovation
EIB financing of the water sector
EU-27 89.4%
Eastern Neighbours, and Russia
0.5%
ACP 1.9%
Rep of South Africa 0.9%
Candidates and
Potential Candidates
3.4%
Mediterranean Partner Countries
3.9%
24/01/2014
Different types of innovation needed in
different contexts :
• technological (incl. appropriate lower
cost technologies),
• managerial (efficiency)
• Institutional (regulatory) / social
• procurement
• .. and sometimes financial
Water & Waste Management projects signed
2008-2012
(total EUR 18.9 bn)
EIB direct lending in the water sector
Average EIB lending in the water sector
2008-2012 = 5% of total EIB lending
Average signatures of EUR 3.4 bn p.a.
Vast majority in traditional investment
programmes for water/wastewater
infrastructure (service provision)
Non-EU projects support varying
infrastructure types, service levels and
institutional activities – from desalination
plants to community mobilisation for
sanitation demand creation.
24/01/2014
EIB financing structures
24/01/2014 European Investment Bank Group
The EIB Group SME portfolio
We provide Loans, Risk-sharing/Guarantees and Equity (e.g. VC).
24/01/2014
EIB Loans for SMEs
Intermediated through commercial banks and institutions
Investment loans
Transfer financial advantage (e.g lower interest rate for the SME)
Eligibility:
• Capital expenditure investment – fixed assets, intangible assets
(including purchase of patents and licenses), etc.
• Sectors: widened eligibility and allocation criteria for Loans for SMEs
(most sectors eligible)
• Medium and long-term working capital investment: subject to min. 2
year commitment
• Generation change or staff-related enterprise transmission: up to EUR
5 m (from EUR 1 m previously)
24/10/2013
For example, the following can be supported:
• Purchases (plant, equipment, raw materials, semi-manufactures,
stock…)
• RDI expenditure
• Build-up or take-over of distribution networks within the EU
• Transmission in order to safeguard economic activity
• Working capital and liquidity ratios
EIB Loans for SMEs
• Expand joint risk-sharing financial instruments in cooperation
with EC and MS, using Structural Funds to leverage private sector
and capital market investments in SMEs - to be operational in 2014;
• Increase EIF’s credit enhancement capacity
• Gradually expand EIB trade finance scheme in favor of SMEs in
particular in programme countries
• Strengthen cooperation with national development banks & MS.
• Extend range of financial intermediaries where possible
24/01/2014 4 European Investment Bank Group
EIB Group enhanced support to SMEs
Risk Sharing Facility for innovative SMEs (RSI)
• Purpose: joint financial instrument to improve access to debt finance for
innovative SMEs and Small Mid-caps (< 500 employees) in support of their
research, development and innovation (RDI)
• How? EIF provides direct (and indirect) financial guarantees to selected
financial intermediaries based on portfolio analysis and review of operations.
EIF provides 50% guarantee on individual transactions. Initiative falls under the
Risk Sharing Finance Facility (RSFF) and benefits from EU budget
allocation.
• Status: joint pilot scheme launched end 2011 and rolled-out in 2013. Covers
12 EU MS so-far through 18 counterparties for guaranteed amounts over
EUR 950m; +170 transactions covered.
• The Growth Finance Initiative (GFI) provides loans of up to EUR 25 million
to mid-cap companies focusing on industry sectors that heavily rely on
research, development and innovation (RDI). Variety of financing solutions
ranging from senior secured debt to mezzanine financing.
24/01/2014 European Investment Bank Group 9
EIB Group: Innovative SME financing
24/01/2014
“Skills for Jobs – Investing in Youth” programme
• Purpose: EUR 6bn contribution to the EU effort to support youth employment by improving access to finance for SMEs (“Investing in Youth”) and to enhance employability via targeting projects focused on education, vocational training and student finance (“Investment in Skills”).
• How? Under the “Investing in Youth” window for SMEs, the EIB is developing pricing incentive schemes for SMEs and Mid-caps that confirm compliance with set criteria to hire young people (15-25yrs) or offer training to young people.
• Status: first loans for SMEs with dedicated amounts for SMEs employing youth have been signed.
• In addition, prioritising credit lines for SMEs in regions with youth unemployment of over 25%, aligning closely with the guidelines of the Youth Employment Initiative and the Youth Guarantee. By the end of October, EUR 2.7 billion had been allocated to youth-employing SMEs in these regions.
European Investment Bank Group 10
EIB Group: Innovative SME financing
24/10/2013
European Commission website showing banks or venture
capital funds that provide finance supported by the EU by
country (including EIB/EIF financial products):
http://europa.eu/youreurope/business/funding-grants/access-to-
finance/index_en.htm
Access to EU finance
Thank you!
24/01/2014 12 European Investment Bank Group
more information:
Monica Peña Sastre
Tel. : + 32 (0) 2 235 00 85
www.eib.org