Luxembourg, 17/07/2007 (Agence Europe) - A €30 million loan has just been granted to AVL List GmbH, one of the leading Austrian technology companies. This is the first operation using the Risk Sharing Finance Facility (RSFF), an innovative financing instrument launched by the European Investment Bank (EIB) on 5 June 2007 to support higher risk financing for projects in the area of research, development and innovation (RDI).
The loan will finance research and experimental developments from 2007 to 2009 in the areas of powertrain technologies and related instrumentation and testing systems. The project is focused on the development of clean and efficient automotive powertrains focused on the decrease of emissions with positive implication for the reduction of the impact of transport on climate change. It also involves research in the areas of hydrogen fuel cell technology, nanocomposites and engine technologies improving energy efficiency.
AVL is a leading technology and engineering specialist focusing on powertrain/engine and related instrumentation technologies. With a successful track record of providing leading edge technologies for more than 50 years, the company offers R&D 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, which, in combination with the company's strong network of cooperation partners, should contribute to the achievement of European objectives of higher energy efficiency and lower CO2 emissions from transport. AVL is, also, a leading coordinator of the European Technology Platform for Embedded Systems (ARTEMIS) and also participated in numerous EU supported projects under the second to the sixth framework programmes.
The Risk-Sharing Finance Facility
The Risk Sharing Finance Facility will make more financing available for promoters of research and innovation (RDI) projects, which often face more difficulties than traditional business sectors in accessing finance due to the relatively high levels of uncertainty and risk inherent to their activity. The RSFF will, then, provide for higher risk debt financing, targeting companies of any size and ownership, notably the innovative small or medium sized companies, including the large group of midcap companies that are key to European innovation. The implementation of RSFF is now well underway, as is evidenced by the wide range of projects that have been submitted for financing under RSFF in the fields of engineering and automotive industry, the life sciences, renewable energy as well as a Risk Sharing Bank Facility for SME and Mid Cap financing. Details of the first group of RSFF projects to be financed will be announced shortly.
The EIB's implementation strategy for the RSFF will comprise offering new financial products to the market such as mezzanine financing, research infrastructure loans and risk sharing credit facilities with partner banks to address the specific needs of individual groups of promoters. Furthermore, it focuses on all the sectors identified as key drivers of excellence in European RDI, that present significant lead market potential in the context of the European Union's competitiveness strategy. Initial demand has come from renewable energies as well as the engineering, manufacturing and automotive sector. Priority has been given to the development of these sectors as well as life sciences including biotechnology, information and communication technology and European research infrastructures. Significant additional demand is also expected from all the sectors prioritised under the Lisbon agenda and the FP7: European Technology Platforms (ETPs) and Joint Technology Initiatives (JTIs).
EIB intends to 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 participating in the credit risk of these operations “thus fostering the capacity of banks and other financial intermediaries to do more business with their clients in the research, development and innovation sectors”, the bank says in a press release.
Through the RSFF, the EIB expects to provide the necessary capital to underpin the expected loans and guarantees by the EIB of some €10 billion over the coming 7 years, thanks to the initial €2 billion funding, with half of this sum being provided by the European Commission through the 7th Framework Programme, and the other half by the EIB from its own resources. (ol)