InnovFin Presentation
InnovFin Product Overview
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InnovFin Product Overview
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InnovFin SME Guarantee
Up to 50% loss coverage
(Principal + Interest 90D)
Full Delegation to Financial
Intermediaries
Automatic Coverage/Inclusion
Attractive Guarantee
Terms
Favourable Capital
Treatment
Guarantee and
Counter-Guarantee
This guarantee instrument covers the risk related to losses of a portfolio
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What Transactions can be supported?
Loan amount: min EUR 25k – max EUR 7.5m (only Senior Debt)
Loan maturity: min 1 year – max 10 years
Currency: EUR and local currency
Max Portfolio: EUR 400m per intermediary – EUR 1bn per intermediary
group
Purpose of Financing: Loans, Credit Lines, Leases and Bonds
Tangible & Intangible
Assets
Working Capital
Business Transfers
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Key Guarantee Terms
Financial Intermediaries are required to transfer the Financial Benefit to
SMEs & Small Mid-caps
Financial Intermediaries are selected on a “first come, first processed”
basis
Guarantee Fee: SME
0.50% p.a.
Guarantee Fee: Small Mid-Cap
0.80% p.a.
Financial Intermediary
50
% G
uar
ante
e G
uar
ante
e Fe
e
Financial Intermediary
Guarantee from EIF
Innovative SMEs / Small Mid-caps
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Transfer of Benefit (indicative example)
Funding Costs
Fixed Costs
Margin
Without InnovFin
Financing at 4%
0.5%
0.5%
1.5%
0.5%
0.5%
1.5%
50% of financing 50% of financing
Cost of the
guarantee :
0.5% (or 0.8%
for small
midcap)
1.5%
Reduction of Cost of Risk
with InnovFin
0.5%
Cost of Risk
Ind
ica
tive
pri
cin
g m
od
el
co
mp
on
en
ts
With InnovFin
Financing at 3.5%
Total = 4% Total = 3%
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Single EU Equity Financial Instrument (managed by EIF) supporting Union enterprises’ growth and research and innovation (R&I) from the early-stage to the growth
and expansion stages
InnovFin SME Venture Capital
(EUR 430m)
EU 28, Norway, Albania, Bosnia and Herzegovina,
FYROM, Montenegro, Serbia, Turkey, Israel,
Moldova, Faroe Islands
COSME Equity Facility for Growth (EFG)
(up to EUR 660m)
EU 28, Iceland, Montenegro, Turkey, FYROM
PRE-SEED PHASE SEED PHASE START-UP PHASE EMERGING GROWTH DEVELOPMENT
LOWER RISK
Multi.Stage funds – InnovFin & COSME
on a pro-rata basis
EXPANSION
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InnovFin SME Venture Capital - Key Features
VC and BA funds focusing on early stage companies
Focus on Horizon 2020 objectives
(e.g. ICT, life sciences, clean energy,
high-tech)
Companies in pre-seed, seed, start
up phase of development
Investment size up to EUR 30m
up to 50% of total commitments
(CATALYTIC)
EIF’s standard screening and
selection process
Addressing multi-stage funds with
COSME EFG (single Call for EI)
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Investment funds/vehicles,
private equity funds
Focus on companies in their expansion &
growth phase
Investment size up to EUR 30m
Up to 25% of total commitments
Pari-passu, at least 30%
co-investment from private investors
EIF’s standard screening and
selection process
Addressing Multi-stage funds with InnovFin SME VC (single Call for EI)
COSME EFG- Key Features
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InnovFin Product Overview
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How does the MidCap Guarantee work?
EIF Financial Intermediary
Innovative Mid-Caps
3,000 employees
New Loans
50% Guarantee EUR 25m
50% loss coverage for new mid-cap loans of up to EUR 50m not covered
under InnovFin SME Guarantee
Can be complemented with EIB funding (global loan)
Pari-passu sharing of risk and pricing
Full delegation to financial intermediaries
Favourable capital treatment, English law
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How does MidCap Growth Finance work?
Direct long term debt and mezzanine finance: EUR 7.5m – EUR 25m
Loans can be structured as economic equity (silent participation)
For innovative Mid-Caps and SMEs (eligible counterparty concept)
EIB can finance up to 50% of all investments over 3 years
Streamlined EIB approval process & English law
EIF Innovative Mid-Caps
3,000 Employees
Growth Finance / Mezzanine EUR 25m
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EUR 12m
Term
loan
2013
EVS
Broadcast
EUR 25m
Term
loan
2014
Welltec
EUR 20m
Term
loan
2014
Manz
EUR 25m
Term
loan
2014
Rovio
EUR 25m
Term
loan
2013
Marposs
EUR 25m
Term
loan
2014
Pharmathen
EUR 8m
Term
loan
2014
Pramac
EUR 14m
Term
loan
2014
Novabase
EUR 12m
Term
loan
2014
eNet
EUR 7.5m
Term
loan
2014
Maier
EUR 10m
Term
loan
2014
Marangoni
EUR 10m
Term
loan
2015
SAES
MidCap Growth Finance Transactions since Launch
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Mid-Cap Product Advantages
No crowding out. Complementary finance to house banks
EIB signaling effect to attract other banks & investors (quality stamp)
Long-term lending at attractive terms (no subsidised)
Growth finance without dilution of shareholders
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InnovFin Product Overview
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How does InnovFin Large Projects work?
Senior debt (pari-passu with other senior lenders)
Eligible project required. EIB can only finance 50% of R&D and
innovation investments
Comprehensive due diligence including project due diligence
EIB standard documentation under English or Luxembourgish law
EIF Large Projects EUR 50m – EUR 600m
Direct Lending EUR 25m - EUR 300m
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Large Projects Advantages
Long term loans at attractive terms (pari-passu)
Signaling effect and quality stamp (technical expertise)
Co-financing with house-banks preferred
No cross selling & hold to maturity strategy
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InnovFin Product Overview
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EIF
How does InnovFin Energy Demo Projects work?
Broad range of instruments
EIB can only finance 50% of project costs
Comprehensive due diligence (legal, financial, technical, etc.)
EIB standard documentation under English or Luxembourgish law
Projects Direct Lending
Up to EUR 75m
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Which projects can be supported?
Pre-commercial stage
Loan amount: min EUR 7.5m, max EUR 75m
Loan maturity: max 15 years
Currency: EUR and local currency
Eligible Projects
Renewable energy Fuel Cells, Hydrogen
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Risk and pricing
EIB 100% risk
Implementation
and
Performance
Risk
Design, Construction
and Early Operational
Phase
Operating Risks and Market Risks
Operating Phase
Le
ve
l o
f risk
Time
EU 95% FLP risk
EIB 5% RRT risk
Guarantee release
FLP – First loss piece
RRT – Residual risk tranche
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Technical and Financial Guarantee Release Tests
Two conditions must be met to activate the guarantee release :
Financial performance is in line with pre-agreed cover ratios demonstrating
that the project can generate the expected level of cash flows.
The following aspects are to be confirmed by a competent external
advisor:
Evidence of project
completion
Achievement of
minimum technical
performance
Project is fully
operational
1 2 3
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InnovFin Product Overview
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Broad range of products - standard debt instruments (i.e. senior,
subordinated, and mezzanine) to risk sharing instruments (RSL) with
forgiveness options
EIB can only finance 50% of project costs
Comprehensive due diligence (legal, financial, technical, etc.)
EIB standard documentation under English or Luxembourgish law
Projects Direct Lending
Up to EUR 75m
How does InnovFin Infectious Diseases work?
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Projects which have passed pre-clinical stage and for which clinical
validation is needed for further development
Loan amount: min EUR 7.5m, max EUR 75m
Loan maturity: up to 7 years
Currency: EUR and local currency
Pricing : commensurate to the risk incurred
Eligible Projects
Vaccines, drugs Medical and
diagnostic devices Manufacturing plants
Infectious diseases
Innovative
Which projects can be supported?
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Review of all Promoter's Infectious Diseases R&D activities
Definition of risk-sharing portfolio (entire portfolio or sub-set of the most
promising compounds incl. at least 5-10 different streams to diversify risk)
Pharma
InnovFin Infectious Diseases
Innovative vaccines and R&D financing
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FLP and RRT to be assessed every 6 mths by
Steering Committee
EU - EIB Sharing of Risk
R&D and
authority
approval risk
Pre-commercial phase
Operating Risks and Market Risks
Commercial phase
Le
ve
l o
f risk
Time
EU 95% FLP risk
EIB 5% RRT risk
FLP – First loss piece
RRT – Residual risk tranche
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Risk-Sharing-Loan Mechanism
Set up of development milestones/related payments to be structured to target, on a probability
adjusted basis, the repayment of the RSL plus a return commensurate with the risk incurred
Compound
financing
Step 1 Step 2 Step 3 Next steps
Success
Failure
x%
1-x%
Milestone 1 Milestone 2 Milestone 3
Success
Failure
Success
Failure
x%
1-x%
x%
1-x%
Forgiveness
option
Forgiveness
option
Forgiveness
option
Repayment 1
Repayment 2
Repayment 3
x% Milestone achievement
probability
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InnovFin Product Overview
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• Hydrogen Mobility Germany
• Myrrha
• European Lead Factory (ELF)
• European Spallation Source
(ESS)
• Global TB Vaccine Partnership
• Light Project Advisory (LPA)
pipeline
• Infectious Diseases Financing
Facility (IDFF)
• Circular Economy (CE)
• Key Enabling Technologies (KETs)
• Bio -Economy
• Strategic Energy Technology Plan
(SET Plan)
• Financing options for Pan-
European RI
• Web tool to guide innovative
companies
Enable maximum access to finance for innovative projects
Improve bankability/investment
readiness
Enable earlier/ faster access
to finance
Improve framework conditions
for financing
Develop “business case” for
new financing mechanisms in
RDI sectors
Innovation Finance Advisory- What do we do?
Horizontal Activity Project Advisory
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Visit www.eib.org/innovfin
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