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Lahti Science and Business Park Ltd The leading Cleantech Park in the Nordic countries Lauri Ylstalo CEO | Lahti Science and Business Park Ltd November 29, 2010

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The leading Cleantech Park in Northern Europe. Coordinator of the Finnish Cleantech Cluster with over 500 member companies. The coordinator of the IASP Enviroparks network. 100 % subsidiary renewable energy centre Energon (TRI Energy Oy). Turnover 2010 7.6 M. Budget 2011 8.8 M. Project portfolio over 30 M. Number of personnel appr. 50. CEO Lauri Ylstalo. Member or Partner of TEKEL (Finnish Science Park Association) IASP (International Association of Science Parks) EBN (European Business and Innovation Centre Network) EEN (Enterprise Europe Network) Greenovate! Europe, Cleantech Scandinavia, Global Cleantech Cluster Association Lahti Science and Business Park Ltd We are developing the Lahti region into a world-class centre for environmental business and research.

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Development services for growth-companies Business Incubator and ICT services Business development & internationalization services for Cleantech companies Internationalization programmes: China, Russia, India. Investor & financer contacting: Cleantech Venture Day. Invest-in activities & soft-landing services Lahti Cleantech Park facilities & services. Cleantech infrastructure - R&D labs, pilots, test-beds: Energon Renewable Energy Research Centre Pilot-scale Soil Research Centre Lahti Science and Business Parks Services We are developing the Lahti region into a world-class centre for environmental business and research.

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Finnish Cleantech Cluster Regions Kuopio, Oulu, Uusimaa, Lahti. Led by Lahti Science and Business Park Ltd. Mandated by Ministry of Employment and Economy (2007-2013). Target in increasing Cleantech know-how and business in Finland and in internationalizing the Finnish SMEs. 260 member companies of which the most are significant universities and research institutions. 60 % Cleantech business and 80 % of research in Finland. Ongoing internationalization programmes: China, Russia and India. Finnish Cleantech Cluster was ranked the 3rd best Cleantech Cluster in global benchmark 2010 by Sustainable World Capital, USA.

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THE EXPERIENCE OF BUSINESS INTERMEDIARIES IN FINANCING ECO-INNOVATION Lauri Ylstalo CEO Lahti Science and Business Park Ltd November 29, 2010

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THE EXPERIENCE OF BUSINESS INTERMEDIARIES IN FINANCING ECO-INNOVATION What are the recurring challenges that organisations facilitating access to finance for SMEs observe? What initiatives could help improve the match of demand with the offer? Is it networking information sharing investment readiness OR something else? Lauri Ylstalo CEO Lahti Science and Business Park Ltd November 29, 2010

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IT Global standardization has made it possible for start-ups to play and win. Cleantech Highly dependent on local climate, needs, culture, vegetation, history etc... Drives different technological solutions deeply into the solution design. Requires still a lot of technical and localized knowledge from the financiers. Understanding the difference via comparison of IT and Cleantech

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Couple of years ago Technology & science-oriented green people with less attention to business plans. Now More and more entrepreneurs with good business instinct entering the cleantech arena. Purely Cleantech focused investors have paved the way generic funds have followed. Success stories and second-wave of serial entrepreneurs improve the dealflow. Exits exist Venture Capital market exists. However, still very young industry but becoming mainstream. Venture Capital and Cleantech

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Unpredictability and discontinuity of legislation still a major risk Many of the eco-innovations lean on subsidy schemes -> public & private risk sharing is needed. Gap between public R&D funding and private VC funding -> public & private risk sharing is needed. Financing CAPEX intensive demonstration projects is a major bottle neck has become even worse problem with financial crisis as risk capital moved way from the technology risk (from early-stage companies to expansion) -> Pro-active domestic marker is needed. Challenges

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Energon Renewable energy research centre for companies to demonstrate their technology prior to commercialization. Bio-oils and biogas, solar, heat pumps, monitoring of emissions. 45 % of the financing from European Union. Lahtis example to tackle the demo bottle neck

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VIGO Programme Bridges the gap between early-stage technology companies and international venture funding with matching the government-backed funding with VC funds. Start-ups selected by a VIGO Accelerator gain streamlined access to a 1 M TEKES grant (TEKES = Finnish Funding Agency for Technology and Innovation). Private investment of ~300k required to receive the grant. VIGO Accelerator receives up to 10 % sweat equity in the venture and management. New innovative financing tool with public & private risk sharing Finnish Cleantech Cluster was ranked the 3rd best Cleantech Cluster in global benchmark 2010 by Sustainable World Capital, USA.

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In 2005 less than a handful of fundable projects now we are able to select the best from competitive deal-flow. In 2010 total of 250 participants: 60 investors, 80 cleantech companies from all over the world. 70 % of the presenting companies have gained access to VC funds. Coaching of entrepreneurs and their business plans has become an important part of the Cleantech Venture Day. Cleantech awareness of the VC community has greatly been improved. Cleantech Venture Day in Lahti since 2005

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VC money getting gradually back to early stage companies after financial crises. Chinese and Indian money seeking investment targets in cleantech. Emerging markets are also very often part of the expansion strategies of cleantech companies. Mainstreaming cleantech: large corporations getting involved. Emerging trends

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Case China

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FECCs General Approach POLICY LEVEL GoVT LEVEL MOUs and OTHER PROCESSES PROCESSES in FINLAND & EUROPE SUPPORTING ACTIVITIES FECC & PARTNERS (Opening doors; Support thru the whole business process) OTHERS (e.g. FINANCIERS) + NETWORKING + SISTER CITIES MARKET SURVEYS; PROJECT DEVELOPMENT; LEADS THRU NETWORKS CLIENT COMPANY INTERFACE CONTRACTS & AGREEMENTS CLUSTERS SMEs

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SINO Finnish Cleantech MoUs 1997 (1987) MoWR (China) / MoAF (Finland): Science and Technology within Water Resources Sector 2002 (1996) MoEP (China) and MoE (Finland): Environment 2007 NDRC (China) and MEE (Finland): Cleantech 2009 Mofcom (China) and MEE (2 MoUs): Ecological Zones & HighTech : , 2009 Mountain-River-Lake Development Committee of Jiangxi Province (MRLDO) and FECC: Cleantech FECC

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Major Achievements 1 st operational year the budget was 10-folded (contracts for companies). 2 nd operational year budget was more than 100-folded. In the May 2010 Cleantech seminar in Beijing FECCs partner companies signed agreements worth over 1,5 billion Euro! Cooperation with NDRC (MoU) in good progress. Market Studies (Solid Waste, Waste Water, Western China, Air Pollution, Bioenergy, Biogas N-E China).

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AGREEMENTS Cooperation agreements: Juno Capital Group; STTE ; MRLD. More than 20 Added value services-agreements with companies. PROJECTS over 20 projects in different development stage: Bioenergy, Sediment sludge, Ecocities, Bioethanol, Waste water. Energy Efficiency market survey (buildings, housing) with FinPro. Ongoing Activities

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Case India

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YESBank is a leading Indian new-age private sector bank having a strong focus on sustainability and clean technology and providing advisory services for Finnish clean technology companies in the Indian markets. LahtiSBP & YESBank offer joint advisory services to Finnish and other Nordic companies pertaining to entry into Indian markets, joint venture formation, strategic acquisition, strategic sale to Indian companies and fund raising for India operations. LahtiSBP & YES Bank cooperation since 2009 Finnish Cleantech Cluster was ranked the 3rd best Cleantech Cluster in global benchmark 2010 by Sustainable World Capital, USA.

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Climate Change Big Challenges Great Opportunities Lauri Ylstalo | CEO | Lahti Science and Business Park Ltd

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To bridge the gap between R&D and expansion stages Benchmarking and exchange of best practices in public & private risk sharing. Development of innovative public & private financial tools (e.g. Singapore and Israel). Learnings from ICT sector financing To localize the knowledge and better penetrate into the emerging markets Stimulate the establishment of cleantech focused business and financial hubs in target markets. Cooperation with incubators, science and technology parks and VC capital in target markets. Suggestions for further work

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Lahti Science and Business Park Ltd The leading Cleantech Park in the Nordic countries Lauri Ylstalo CEO | Lahti Science and Business Park Ltd lauri.ylostalo@lahtisbp.fi +358 400 708 719