EIB General Presentation 2005

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14 April, 2005 World Trade Center
The contribution of the European Investment Bank
to the Research Area the Innovation 2010
Initiative
Mr. Paolo Munini
Head of RD Task Force
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THE EIB GROUP

• EIB - European Unions financing institution
• Created by the Treaty of Rome in 1958, to provide
  long-term finance for projects promoting European
  integration
• Subscribed capital EUR 163.7bn
• EIB shareholders 25 Member States of the
  European Union
• Lending in 2004 EUR 43bn (EUR 40bn within the
  EU)
• Borrowing in 2004 EUR 50bn (EUR 28bn in EU
  currencies).

P. Munini
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THE EIB CAPITAL (IN PERCENT)
Germany France Italy United Kingdom Spain Belgium
The Netherlands Sweden Denmark Austria Poland Finl
and Greece Portugal Czech Republic Hungary Ireland
Slovakia Slovenia Lithuania Cyprus Luxembourg
Latvia Estonia Malta
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Subscribed Capital EUR 164bn
Country Rating
Share subscribed of Capital
As of February 2005 In case of split rating, the
highest rating has been taken
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WHAT ARE THE BENEFITS OF AN EIB LOAN

• Low cost of "AAA" rating funding benefit passed
  on to clients, for
• Large amounts
• All major currencies, including those of the
  Candidate Countries and RSA
• Long maturities
• Catalytic effect on participation of other
  banking or financial partners.

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• 5 priorities
• Economic and social cohesion in an enlarged EU
• Implementing of the Innovation 2010 Initiative
  (i2i)
• Development of Trans-European and Access networks
  (TENs)
• Support of EU Development and Cooperation
  Policies in Partner Countries
• Environmental Protection and Improvement,
  including Climate Change and Renewable Energy.

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i2i PROMOTING KNOWLEDGE AND
INNOVATION(2000-2010)

• Human capital formation
• Information technology networks and access
• RD
• Dissemination of information technology and the
  audiovisual sector
• Equipping SMEs with information technologies
• Development of SMEs and entrepreneurship.

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i2i (2000-2010)EUR 26.8bn
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27

• Human Capital
• Research Development
• ICT
• European Investment Fund

25
38
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LOAN SIGNATURES IN THE EU 2000-2004Individual
loans EUR 122.6bnGlobal loans EUR 57.7bn

• By country and
• objective
• Regional development
• Human Capital
• Communication Infrastructure
• Environment
• Energy
• Innovation 2010 Initiative

Furthering development and integration
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RDI and Economic Development
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EUs Deficit in RDI Investment

• vs the US
• gap in excess of 120 bn
• GDP accounted for by investment in RDI at 1.9 vs
  2.7 in US
• vs Japan
• Japan already invests 3 of GDP in RDI compared
  to 1.9 in EU

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Need for EU Action

• Increase EU and member states investments in RDI
• Revise EU budget structure (significant increase
  from 17.5 bn in 2003-2006 being negotiated)
• Diffuse best practice (Finland, Sweden vs.
  Greece, Portugal)

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The Growth Initiative

Formulated during Italian EU Presidency- Nov.
2003

• OBJECTIVE
• 40 bn invested in RDI by 2010 in EU
• Quick Start Programme (QSP)
• Defines Technology Platforms for EU action in
  specific sectors.

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RDI Towards 3 of GDP

• 3 target by 2010 confirmed by European Council
• Action plan pillars
• Co-ordination between member states
• Improving public support for RDI (eg. Fiscal
  measures, facilitation of technology transfers)
• Public funding
• Improving RD environment (eg. competition rules,
  intellectual property rights)

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EIB Products

• Individual loans (projects gt 25 m)
• EIB credit lines through commercial banks for
  SMEs and smaller projects
• EIB Structured Finance Facility (risk taking)
• EIF venture capital investments (Eg. Innovacom 5,
  Ventech)
• EIF SME guarantees

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EIB Role and Actions

• Innovation 2010 Initiative
• Follows successful completion of i2i (Lisbon
  2000)
• Innovation a priority for EIB lending
• 50 bn earmarked by 2010 for enlarged EU
• Target sector knowledge net (integration of
  knowledge, diffusion of results, harmonisation of
  technological standards, eg. EU aerospace
  industry, GSM in TLC)

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EIB Project Examples

• Pilot plants
• and prototypes

Science parks, Incubators
RDI Company Investments
Small Innovative projects
RD Infrastructure
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EIB RDI lending (1)

• m 2000-2003 2004
• Approvals 21,049 10,256
• Signatures 16,951 7,150
• Disbursements 9,615 6,620

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Challenges for EIBs New Role

• Financing infrastructure intangibles
• Low risk high risk
• Traditional loan products equity,
  mezzanine, financial engineering

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Example of EIB RDI lending Italy
Private Sector (2 large company projects being
finalised)

• European Priority Projects
• (Free Electron Laser)

Banks (enhanced resources, partners identified
to compensate for limited public resources)
Central and Regional Public Administration
(ongoing coordination with Ministry,
securitisation, programme under discussion for
local Authorities )
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The Open Challenges

• Fill the financing gap
• Develop suitable products
• Cover project cycle from equity (EIF) to loans to
  guarantees
• Meet ambitious quantitative targets

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Thank you
http//www.eib.org
P. Munini