EIB support to innovation in the MENA region

Joyce LiyanHead of Neighbourhood Business Development UnitDirectorate for operations outside the EU

Cambridge, 20 June 2013

1. The European Investment Bank: The EU Bank

2. Role of international institutions in promoting linkages

3. Supporting innovation in the MENA region

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The European Investment Bank (EIB),The EU Bank

European Union’s long-term lending bank set up in 1958 by the Treaty of Rome.

Shareholders: 27 EU Member States

Governance

Board of Governors – EU Finance Ministers

Board of Directors - Member States & European Commission

Management Committee –EIB’s executive body

Audit Committee – independent, non-resident

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Long-term finance promoting European objectives

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We operate through FEMIP « Facility for Euro-Mediterranean Investment and Partnership », which brings together the whole range of EIB instruments in North Africa and the Middle East.

Our objective is to support the modernisation and opening up of region’s economies.

Over EUR 14.2bn invested since 2002 through: Direct lending to infrastructure projects: transport, energy, water, telecom, health... Credit lines to SMEs provided through local banks Equity and risk-capital Microfinance Technical assistance

The EIB in North Africa and the Middle East : investment, partnership and technical assistance

1. The European Investment Bank: The EU Bank

2. Role of international institutions in promoting linkages

3. Supporting innovation in the MENA region

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EIB Knowledge Economy Lending 2000-2012

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2.2 bn

5.1 bn3.6 bn

6.2 bn7.1 bn

10.7 bn10.9 bn

10.2 bn

12.5 bn

18.3 bn

16.5 bn

10.4 bn9.3 bn

Total Lending 2000-2012 : EUR 123 bn

Tota

l len

ding

vol

ume

(EU

R m

)

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Risk Capital CIP Resources (SME) RSFF (SME / MidCap)

Entrepreneur, friends, family

Business Angels

Seed/Early Stage VC Funds

VC Funds

Bank Loans and Guarantees

Seed / Start-Up Phase Emerging Growth Phase Development Phase

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

Competitiveness and Innovation Program (CIP) Guarantee schemes

Growth financing for SMEs

VC Funds,

SME guarantees (loans, microcredit, equity/mezzanine,)

RSFF

Innovation financing

SMEs/MidCaps, Banks, PE Investors (sub-investment grade)

Loans (incl. Mezzanine), Funded Risk Sharing Facilities with Banks (Investors)

Special Operations

RSFF / Investment Loans

RSFF

Investment Loans

RDI financing

MidCaps/Large Corporates/Public Sector Entities (investment grade)

Guarantees

Special Operations

Later Stage Counterparts

EIF EIB

EIB Group product offering for RDI

TECHNICAL ASSISTANCE

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Beneficiaries of RSFF financing

• Mid-Caps and large corporates (unrated / sub investment grade)• Public agencies for S&T / R&D&I promotion• Universities and research institutes• European and national Research Infrastructures (open access).• Industrial and regional clusters/networks

Eligible cost categories

• Project capital expenditures in tangible (buildings and equipment) & intangible assets (Capital Formation)

• RDI cost (basic research, industrial research, development, proof of concept, pilot & demonstration plants; innovation (technological or organisational)

• Upscaling / incremental working capital needs. • Development and Acquisition of -proprietary- IPR, and other related operating

expenses.

RSFF, eligible benificiaries and costs categories

EIB Risk Sharing Finance Facility (“RSFF”)

RSFF Approved and signed transactions 2007- 08/2012 (in EURm)

RSFF Portfolio Distribution by Industry Segments

RSFF Portfolio - Geographical Distribution

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1. The European Investment Bank: The EU Bank

2. Role of institutions in promoting linkages

3. Supporting innovation in the MENA region

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Supporting innovation in the MENA region

EIB has granted a series of loans over EUR 600m to technology parks in the Maghreb region, education infrastructure projects, often combined with technical assistance, as well as upstream technical assistance and capacity building.

Education:

Enseignement Superieur Tunisia; ecole d’ingenieurs Gafsa, Kairouan and Béja, buildings and instrumentation

Education Maroc; Jordan Higher Education

Innovation Structures:

Technopôles Tunisia; Sidi Thabet, Sousse, Sfax, Monsatir and Bizerte Technopôles Morocco; Rabat-Salé, Oujda, Kenitra, Berkane, Agadir, Nouaceur,

Meknes

Both loans combined with Technical Assistance for project implementation and capacity building.

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Supporting innovation in the MENA region

Funds for innovative SMEs

As at 31st December 2012 the total active FEMIP risk capital portfolio under management stood at EUR 469 million and consisted of 40 investment funds, 8 direct investments, 9 microfinance operations and 290 co-investments with local intermediaries. All operations are entirely dedicated to the private sector.

Tunisia; Fond d’Amorçage Tunisien (Phenicia Seed Fund), Global Loan Innovative SMEs (with amongst others Amen Bank, Arab Tunisian, Tuniso-Kuwait, Union Bancaire Commerce

Morocco: Massinissa Fund

Jordan: Capital for Growth Fund (JEDCO-Abraaj Capital); Badia Impact fund for Technology Transfer

Lebanon; Building Block Equity Fund (Bader); Lebanon Growth Capital Fund

Palestine: Middle East Venture Capital Fund for export-oriented start-ups in the services, software and communication sectors

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The CMI Work programme «Innovation Capacities»2013-2015

Centre for Mediterranean Integration in Marseille: exchange platform / benchmarking

1) Management of Innovation Funds in MENA

2) Development of IP systems and rights; (1) National level and (2) University and business level: The EIB and the WB through the CMI organized a workshop and commissioned a study to understand the context of Intellectual Property (IP) assets in the MENA region and to assess the potential of developing an IP system.

3) Beyond IP and incubation; how to overcome growing “pains”

4) Science and Innovation cities, (universities, research centres, innovative businesses)

5) Bridging the gap between Academic R&D, business and local innovation needs

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Areas under development

Partnership with European Space Agency: EIB together with the European Space Agency (ESA) and Luxembourg’s Research and Innovation Industry have launched the “Space for Med Initiative” to use space-based technologies for developing three key sectors: i) water management, ii) energy and renewable energies and iii) transport and logistics in the Mediterranean partner countries. Ultimately, new aspects of development in these sectors will be identified and will lead to the implementation of concrete infrastructure projects. One example is the development of broadband internet throughout the region.

Maturation Funds: EIB is also interested in investing in TT (Technology Transfer) vehicles and it is currently considering supporting maturation funds which will be used for investing the projects in a large geographical area (broader then MENA).

Programme to support diaspora start-up in the MENA: The EIB is working with its partners to assess the feasibility of a programme that helps highly qualified students in Europe set up innovative companies in their origin countries, thus creation of job opportunities and support entrepreneurship in the Mediterranean partner countries.

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Cultivating «RDI» and competitiveness

• Reflection on «new» financial products along RDI cycle; Regional RDI fund ?• Products to strengthen research quality and quantity (fixed- and human capital)

• Products that contribute to the valorisation of research: Strengthen the Triple Helix (incl. PPP-schemes) MENA Science Cities, Cités d’Innovation

Technology Transfer and IP policies. Spin-offs / incubator/ proof of concept / accelerators Twinning programmes with industrial partners (bridge towards industry) Innovation to increase employment / (K&L) factor productivity in the region (RD in

line with indigenous needs + absorption capacity of local industry)

• Consider regional (intermediated) scheme to attain critical mass.• Technical Assistance to build indigenous capacities

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For more information

http://www.bei.org/

info@eib.org

Tel: (+352) 437922000