Financing SME in the Eu Union-SME UNION

8/14/2019 Financing SME in the Eu Union-SME UNION

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Financing SMEs in the EU overview

SME UNION, 22 Rue de Pascale, B-1040 Brussels

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FINANCING SMALL AND MEDIUM ENTERPRISES

IN THE EUROPEAN UNION

SME UNION of the EPP22 Rue de Pascale, 1040 Brussels

[email protected]

By

Krisztina JekkelProject Manager

Brussels, November 2006


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Content

Foreword ......................................................................................................... 4.

Userguide: Different types of financial means for SMEs ............................ 5.

European Commission................................................................................... 6.

Competitiveness and Innovation Framework Program ................................ 6.

The Seventh Framework Program............................................................. 10.

INNOVA..................................................................................................... 12.

LIFE+......................................................................................................... 14.

European Structural Funds........................................................................ 16.

Risk Capital-Venture Capital...................................................................... 19.Commission Funded Activities and Private Information Networks.......... 23.

European Investment Bank - European Investment Fund ........................ 31.

JASPERS .................................................................................................. 31.

JEREMIE................................................................................................... 33.

JESSICA ................................................................................................... 35.

Venture Capital.......................................................................................... 37.

Other means of financing SMEs in the member states ............................. 41.

Austria ....................................................................................................... 41.

Belgium ..................................................................................................... 47.

Bulgaria ..................................................................................................... 52.

Cyprus ....................................................................................................... 56.

Czech Republic ......................................................................................... 59.

Denmark.................................................................................................... 63.

Estonia ...................................................................................................... 72.

Finland....................................................................................................... 73.France ....................................................................................................... 79.

Germany.................................................................................................... 85.

Greece....................................................................................................... 90.

Hungary..................................................................................................... 94.


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ContentIreland ..................................................................................................... 100.

Italy.......................................................................................................... 104.

Latvia....................................................................................................... 107.

Lithuania.................................................................................................. 108.

Luxemburg .............................................................................................. 110.

Malta........................................................................................................ 113.

Netherlands ............................................................................................. 114.

Poland ..................................................................................................... 118.

Portugal ................................................................................................... 119.

Romania .................................................................................................. 121.Slovakia................................................................................................... 130.

Slovenia................................................................................................... 132.

Spain ....................................................................................................... 136.

Sweden ................................................................................................... 140.

United Kingdom....................................................................................... 144.

EBRD............................................................................................................ 146.

National banks......................................................................................... 149.

Bulgaria .............................................................................................. 149.

Czech Republic .................................................................................. 155.

Estonia ............................................................................................... 160.

Hungary.............................................................................................. 163.

Latvia ................................................................................................. 167.

Lithuania............................................................................................. 170.

Poland................................................................................................ 173.

Romania............................................................................................. 180.

Slovak Republic ................................................................................. 188.

Slovenia ............................................................................................. 193.

Regional and sectoral equity financing investments................................ 197.


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Foreword

At a time when Small and Medium Enterprises are the key drivers of theEuropean Economy, and their specific support is still not completely fulfilled bythe European institutions, this document provides help for SMEs in order to find away to finance their objectives. Improving the access to funds, loans and venturecapital is vital in developing entrepreuneurship, competition, innovation andgrowth in Europe. Additionally many European small and medium enterpriseshave to face difficulties while accessing the financial means of supporting theirprojects. Not only the adaptation to the constantly changing financial environmentbut the complexity and extent of financial reporting impede obtaining adequateand sufficient capital to produce and further extend their activities. This documenthelps to find the best financial solution for the SMEs projects.

Such an overview can never be fully completed. Because of obvious reasons, itis not possible to contact all of the regional banks, national programs and privatefinancial institutions. In the first part of the report we tried to give some overallview how small and medium enterprises can obtain financial means from thedifferent type of institutions.

Further we tried to collect all the European programs provided by the EuropeanCommission (EC), European Investment Bank (EIB) and European InvestmentFund (EIF) that can provide capital for the small and medium enterprises. Someof the programs listed do not provide direct funding for SMEs such as theCompetitivenes and Innovation Program (CIP), but they are co-funders fornational programs. Some other programs have very stringent requirements oronly addressed to organisers of national initiatives of which SMEs could benefitindirectly.

Moving towards the national level we listed governmental organisations,chambers, SME advisory services, business information centres, financialinstitutions, intermediaries for SME support and contact points for sales, export-import, cooperation and joint-ventures. We provided also the EBRD regional andnational programs mainly in the new member states of the European Union.

Finally we would like to stress that our aim was not to give a complete descriptionabout all financial services in the European Union. We rather wanted to givecontact points of possible programs, institutions where SMEs individually can

turn in case of financial needs. I want to express my special gratitude to mycolleague Krisztina Jekkel, who compiled all this important information duringweeks of research. Hopefully this report will be a helpful guide for Europeansmall and medium enterprises.

Patrick VollerSecretary General

SME UNION of the EPP


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Userguide: Different types of financial means for SMEs

Let us examine the main sources of institutional funding for small and mediumenterprises. According to a Eurobarometer survey (September 2005, in the EU15) 79% of the small and medium enterprises go to a bank in order to obtaincapital.Credits from banks represent around 70% of the SMEs external financing.Althoug it is the most popular way of financing many SMEs feel that their accessto bank credit is difficult and sometimes banks credits are even harder to accessthan normal loans. Banks require too much information; it takes too much timeand slows down the actual implementation of the project. Terms laid down by thebanks are not enough transparent and very often banks act with mistrust andprotecting their own interests. From the other side, banks are often complainingthat SMEs do not have strategic plan for long term loan, their equity capital is toosmall to sustain a serious risk, and they do not manage to present their projectproperly.

Renting and leasing is the most common in Germany, Austria and Sweden butalso 24% of European SMEs get financial means from that. Leasing has gained astrong foothold as a specialised and highly flexible pathway to banking finance.However leasing is limited to the acquisition of equipment and propertyinvestment. Moreover, funding investment with leasing leaves the businesswithout additional resources to cover its working capital needs for the operation.From public finance institutions (most of them listed below) 11% of SMEs getaccess to financial instruments. These agencies present themselves as specialistin financial engineering. However they focus on setting up larger businesses andthen on providing financial and consultancy services for medium enterprises.Venture capital companies do not give very frequently loans to small

businesses. They prefer medium sized enterprises with a high growth objectiveand leading market position as possible target. Moreover they require high costanalysing the project and most of the enterprises get rejected.Business angel networks are looking at smaller amounts around 100 000 euroand can become crucial players in providing capital if the businesses meet theireligibility criteria. These networks bring together private and companyinvestors. Additionally they not only provide financial means but also advice andgive other information services for companies. Micro-credits form a major part ofloans to small businesses part. As a result micro credits represent one-third ofcredit applications from SMEs. Micro credits can be given by banks or otherfinancial institutions as well.

Finally there are different programs established by European Union institutionsall together with national agencies in order to finance small and mediumenterprises. First of all European institutions and their programs are listed in thisdocument; further more the national level institutions are also described thatprovide information and capital. Contact details are described under every singleprogram and institution.


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EUROPEAN COMMISSION PROGRAMS

Competitiveness and Innovation framework Programme (CIP)

The European Commission has adopted a coherent and integrated response tothe objectives of the renewed Lisbon strategy. Running from 2007 to 2013, itproposes a budget of more than 4 billion euros.The proposal was adopted on 6thApril 2005. The CIP is supposed to become one of the main Community actionsto make economic growth and create more jobs. It will draw together into acoherent framework specific Community support programmes and relevant partsof other Community programmes in order to boost European productivity,innovation capacity and sustainable growth, and to address complementaryenvironmental concerns. The CIP will be harmonized the relevant actions, andthose conducted by Member States. CIP brings together already existing EUactivities that support competitiveness and innovation. Thus it will be more

transparent and comprehensible for the public, ensuring continuity of theprogrammes with a proven and successful track record.

There are three specific programmes run under CIP:1. Entrepreneurship and Innovation Programme2. ICT Policy Support Programme3. Intelligent Energy-Europe Programme

Each of these has its own objectives, benefits its target beneficiaries andanswers to its own stakeholders. Each of them will establish its annual workprogrammes, which in turn will be submitted to a specific management

committee composed of CIP participating countries authorities.

1. Entrepreneurship and Innovation ProgrammeThis programme brings together those actions that were isolated in theMultiannual Program for Enterprise and Entrepreneurship (MAP), measure forIndustrial Competitiveness and elements of the LIFE-Environment Programme.CIP will also build on innovation activities previously developed in ResearchFramework Programmes.It aims to help enterprises innovate by providing access to finance: sharing risksand reward with private equity investors and providing counter or co-guaranteesto national guarantee schemes.

Through this programme, SMEs will also have simple, clear and efficient accessto the EU its legislation, programmes and opportunities through the businesssupport networks.

The conditions for innovation will be improved through better policies based onexchanges of best practices between member states and evidence (innovationtrendchart, innobarometer, innovation scoreboard) targeted to:

improving the regulatory environment for enterprise and innovation


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improving access to finance for SMEs in their start-up and growth phasesand

helping SMEs navigate the single market, and channel feedback onbusinesses concerns to improve EU policy making.

2. ICT Policy Support ProgrammeICT Policy Support Programme will use the previous outcome and actions of e-TEN, Modinis and e-Content parallel to the new strategy 2010-EuropeanInformation Society.

The ICT programme will: stimulate the new converging markets for electronic networks, media

content and digital technologies test solutions to the bottlenecks that delay wide European deployment of

electronic services support the modernization of public sector services that will raise

productivity and improve services.

Actions under the ICT-policy support programme will underpin regulatory and research actions of the Commission to stimulate

emerging digital economy based on the convergence between networkservices, media content and new electronic devices

provide a bridge between research investment and wide adoption, byproviding a testing ground for pan-European electronic services in boththe public and private sectors

reinforce European cultural and linguistic identities by support for theproduction and distribution of European digital content

assist the development of an open and inclusive European InformationSociety through stimulating innovative approaches to inclusion, quality oflife and public services.

3. Intelligent Energy-Europe ProgrammeThe programme will encourage the wider use of new and renewable energiesand improve energy efficiency. It aims to accelerate actions parallel to the agreedEU strategy and targets in the field of sustainable energy, enlarge the share ofrenewable energy and reduce our final energy consumption.

It includes actions to: increase the uptake and demand for energy efficiency to promote renewable energy sources and energy diversification, and to stimulate the diversification of fuels and energy efficiency in transport.

New actions CIP will add a new risk capital instrument (the High Growth and Innovative

Company Facility - GIF2) to the existing instrument fostering SME start-ups. This is aimed specifically at innovative and high growth SMEs, which


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in Europe face a lack of capital at their most crucial growth phase. Asignificant proportion of resources will be dedicated to supporting SMEsdeveloping or using environmental technologies.

An instrument for securitisation of bank loan portfolios will free up furtherSME loan capacity amongst smaller and regional banks, which are thetypical interface for family businesses. This is important to develop theavailability of proximity financing for more traditional small businesses.

Euro Info Centre and Innovation Relay Centre networks will bedeveloped to offer one-stop-shops for services in support of business andinnovation. Their role in providing feedback for developing EU policy willbe enhanced, as will their role in improving SME access to EUprogrammes in particular the framework programmes for research.

A scheme to support the cooperation between national and regional

programmes for business innovation (BISS) will increase the opportunitiesfor SMEs to benefit from creativity, know-how and market opportunities inother EU Member States, without having to go through the EUadministrative processes. This new scheme will allow tailoring trans-national programmes to specific regional or sectoral technology andinnovation needs. It aims to give an incentive to regions to supportinvestment in innovation by enterprises, which is essential for morecompetitiveness in a knowledge-based economy.

The Intelligent Energy Programme will place its emphasis on the massreplication of new and renewable energy sources and energy efficient

technology, and in the faster implementation of the regulatory frameworkin the sustainable energy field.

In order to help Member States drive forward administrative andeconomic reforms, our open method policy development tools will becomplemented through twinning activities helping Member States andregions to learn from examples of good practice.

For further informationEuropean Commission Enterprise & Industry DGFax: +32 (0)2 298 88 22

E-mail: [email protected]

Euro Info Centers inform, advise, and assist businesses on Community issues.They also provide feedback to the European Commission about communitymatters affecting SMEs. They are well integrated in the local and regionalbusiness environment, while their teams are familiar with Europeanpractices. They constantly contact with the European Commission and get


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access to a business support network comprising of more than 300 centresacross more than 45 countries.

For further information:http://ec.europa.eu/enterprise/networks/eic/eic.html

Innovation Relay Centre is established in order to support innovation andtransnational technological co-operation in Europe with a range ofspecialized business support services. IRC services are primarily targeted attechnology-oriented small and medium-sized enterprises (SMEs), but are alsoavailable to large companies, research institutes, universities, technology centersand innovation agencies.

For further information:http://irc.cordis.lu/home.cfm

EraSME will network national and regional programmes promoting co-operationbetween SMEs and research organizations from 19 European countries andregions and interface with programme owner and programme agencies in theparticipating member states and regions. EraSME is funded within the ERA-NETscheme of the 6th European Framework Programme.

For further information:http://www.era-sme.net/public/


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The Seventh Framework Programme (FP7)

Research and development activities have been supported by the EuropeanUnion through the Framework Programmes (FPs) in almost all scientific areas.FP7 will be launched operationally on January the 1st in 2007 and it expires in2013. The main purpose of the program, similarly to its predecessors, is to createthe European Research Area and carry out the development of a knowledgebased economy and society in the European Union.The maximum overallamount for Community financial participation in the EC Seventh FrameworkProgramme should be more than EUR 50 000 million for the period 2007 - 2013.For nuclear research and training activities carried out under the Euratom treatyEUR 2751 million are foreseen for 2007-2011.

Four basic components of European research within the programmes will besupported in the proposed Seventh Framework Programme:

CooperationWhole range of research activities can be supported that are carried out in trans-national cooperation, from collaborative projects and networks to the coordinationof national research programmes. International cooperation between the EU andthird countries is also integrated part of the program. The action is industry-drivenand divided into four sub-programmes that are the following:

Collaborative research Joint Technology Initiatives Coordination of non-Community research programmes International Cooperation

IdeasDynamism, creativity and excellence of European research is central componentin all scientific and technological fields, including engineering, socio-economicsciences and the humanities. This action will support new ideas and will beoverseen by a European Research Council

PeopleThe objective is to strengthen quantitatively and qualitatively the humanresources in research and technology in Europe.

Capacities

The point of this action is to prop up research infrastructures, research for thebenefit of SMEs and the research potential of European regions (Regions ofKnowledge) as well as to stimulate the realisation of the full research potential(Convergence Regions) of the enlarged Union and build an effective anddemocratic European Knowledge society.

On the other sides European social, economic, environmental and industrialchallenges also underline the need of research. The overall idea is to contribute


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to sustainable development therefore the following high level themes wereproposed for EU action:

Health Food, agriculture and biotechnology Information and communication technology (IST) Nanosciences, nanotechnologies, materials, new production technologies Energy Environment (including climate change) Transport Socio-economic sciences and the humanities Security and Space

In addition, two themes are covered by the Euratom Framework Programme: Fusion energy research Nuclear fission and radiation protection

The Community financial contribution will cover a maximum of 50% of eligiblecosts minus receipts both for research and for demonstration activities. ForSMEs, public bodies, secondary and higher education establishments and non-profit research organisations, there will be a top up of a maximum of 25% forresearch activities. Frontier research actions would be reimbursed at 100% for allentities. All other activities, including those relating to coordination and supportactions, and actions for the training and career development of researchers,would be reimbursed at up to 100% for all entities.

For more information: http://cordis.europa.eu/fp7/


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INNOVA

Europe INNOVA is an initiative for innovation professionals supported by theEuropean Commission under the 6th Framework Programme (continuing underthe 7th Framework Programme). The fundamental objectives of this initiative fallin line with the policy direction set out within the FP6 priority of "Structuring theEuropean Research Area". In acting as the focal point for innovation networkingin Europe, Europe INNOVA aspires to inform, assist, mobilise and network thekey stakeholders in the field of entrepreneurial innovation, including firmmanagers, policy makers, cluster managers, investors and relevant associations.Europe INNOVA adopts a sector-based approach that is strategically designed toidentify and analyse the leverages and barriers to innovation within specificsectors. It is intended that this approach will lead to sound and targeted policymeasures. Furthermore, the sector-based approach will activate cooperationbetween business clusters in Europe through the establishment of networksbetween clusters that operate in the same or different domains. Through such

cooperation it is envisaged that existing clusters will adopt "outward looking"approaches by establishing learning platforms for exchanging experiences,information, good practice and knowledge.Europe INNOVA builds upon Gate2Growth and PAXIS and further develops theapproach of networking innovation players, by combining analytical expertisewith grass roots experience. Europe INNOVA brings together more than 300partners from 23 Member States, and is currently composed of the elementsdepicted in the diagram.

Financing Networks:European companies are facing global competition. There is agreement that

financing of innovation will be crucial in preparing for this global market. WhereasEurope can compete with the most successful regions in the world in terms ofR&D, the situation is not as good when it comes to turning RTD results intomarket success. The innovation capability of SMEs in particular strongly dependson the availability of innovation financing. But European investment markets donot perform like those in the US and Asian markets.The main barrier to achieving the Lisbon objectives will be the development of amuch more effective innovation finance system within Europe. There are specificgaps in the system (such as early stage financing) which can only be addressedby public-private partnership models. Sectoral situations need to be analysed indetail in order to identify gaps and develop instruments to overcome the barriers.

Europe INNOVA via its Sectoral Financing Networks brings together a range ofactors from across Europe (enterprises, business associations and incubators,the financing community, academia and policy makers) to identify the criticalfactors involved in obtaining funding and to enable better access to capital forinnovative enterprises. Each network will identify and analyse sector-specificproblems ranging from the drafting of business plans and the preparation ofappropriate IP strategies, to the identification of the most likely sources offunding.


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This structured sectoral approach will enable gaps and market failures ininnovation financing to be addressed by the development of tailor-cut tools.Policy recommendations will be formulated to overcome sectoral specific pitfallsand stimulate the performance of European capital markets in relation toinnovation financing.

For further details look at: www.europe-innova.org


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LIFE+

The first phase ofLIFE ran from 1992 to 1995. It coincided with the first time thatEU environmental policy was given a firm Treaty basis, in the Single EuropeanAct, and with the Fifth Environment Action Programme, which was adopted in1992. This was to set the pace of environmental reform for the next decade andthe LIFE programme was one of its essential tools.Detailed priorities were seteach year. For example, in 1993, the sustainable development andenvironmental quality component of LIFE I focused on projects relating to thetextile, tannery, paper and agro-food industries; waste reduction and recyclingdemonstration projects; decontamination of polluted sites; sustainabledevelopment in agriculture, transport and tourism; urban transport; andmodernisation of environmental monitoring networks. During its lifetime, LIFE Ifunded a total of 731 projects , rising from 105 in 1992 to a high point of 245 in1994 (in 1995, slightly fewer - 237 projects - were funded).The first phase of LIFE was succeeded by LIFE II (1996-1999), also running for

four years but with an increased budget of ECU 450 million, covering an enlargedEU During LIFE II, the split of the programme into three categories - LIFE-Nature,LIFE-Environment and LIFE-Third countries - was completed. The third phase ofthe LIFE, called LIFE III programme ran for a five year period (2000-2004),though it was implemented in four rounds due to late adoption of the legal base.Its budget was increased to EUR 640 million. Later it was extended until 2006.The proposal for an extension of the programme was based on the positiveassessment reached in a mid-term evaluation report. Specifically, the reportexamined the role of the LIFE programme in implementation and development ofEuropean environmental policy and legislation, and the actual management ofthe LIFE III.

The new phase of LIFE, known as LIFE+, for the period 2007-2013 was currentlyaccepted. Life+ also means grants for innovating environment projects thatcontribute to strengthening the EU environmental policy. Altogether with SMEs;research centers, local and regional authorities, federations, unions,administrations of states, agencies, chambers, universities and associations canapply for funding. The principles of the proposed programme have been agreedthough final approval on the budget can only take place in the context ofagreement on the overall EU budget.LiFE+ will focus on three components:

1. LIFE+ Nature and Biodiversity

This strand of LIFE+ will contribute to the implementation of Communitypolicy and legislation on nature and biodiversity, with particular referenceto the Birds and Habitats Directives, and will support further developmentof the Natura 2000 network. This strand will also work to build up aknowledge base for evaluating Community nature and biodiversity policy,and will support development of monitoring tools in this respect, as well asworking for better environmental governance, and broadening stakeholderinvolvement.


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2. LIFE+ Environment Policy and GovernanceThis strand of LIFE+ will support innovative policy approaches, with aspecial focus on climate change, environment and health and quality oflife, and natural resource use and waste.

3. LIFE+ Information and CommunicationThis strand of LIFE+ will disseminate information and raise awareness onenvironmental issues, including forest fire prevention, and will supportaccompaning measures, such as information campaigns, conferences,publications and training.

The major change in LIFE+ compared to LIFE is that the new programme will bedecentralised with around 80 percent of the budget allocated to the EU MemberStates for financing projects and measures through national programmes.Finance will be allocated to Member States depending on their population,population density, number of Sites of Community Interest (SCIs) and number ofSCIs relative to the EU total. Weightings will be attached to all of these factors to

ensure a fair dispersal of funds and several corrective measures will apply.Member States will distribute funds according to national annual workingprogrammes, which they will develop in consultation with the EuropeanCommission. These programmes will be in accordance with EU added valuecriteria: they should support the objectives, show Community value andrepresent value for money. There will be two multi-annual programming periods:2007 to 2010 and 2011 to 2013.

For more information look at: http://ec.europa.eu/environment/life/life


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European Structural Funds

Cohesion policy, supported by the Structural Funds, increasingly focuses onknowledge, research and innovation. Where regions, Member States and theCommission foster development within a bottom-up approach, based onpartnership and shared management, it has proven to be a strong instrumentresulting in increased growth and job creation. A strong effort has already beenmade in the present programming period (2000-2006); spending on research andinnovation amounts to 7.4% of the total European Regional Development Fundfor less developed regions (EUR 7.5 billion) and 11% for regions under economicrestructuring (EUR 2.4 billion). The Commission has proposed that MemberStates significantly increase expenditure in this area in the next programmingperiod. Similar efforts are being made with the European Social Fund.This approach is reflected in the Commissions draft Strategic Guidelines forCohesion Policy, which expect the Structural Funds to fully back theimplementation of the Partnership for Growth and Jobs. A broad range of

research and innovation related actions may be funded, such as regional andtransregional clusters, poles of excellence, technology transfer, business supportservices and actions to develop human capital and to help workers andenterprises anticipate and adapt to economic change. Regions and MemberStates can use the Structural Funds in a flexible manner to help meet theirspecific needs and exploit the synergies with FP7 and CIP.Innovative actions will also be co-financed by European Agricultural Fund forRural Development to develop new high quality and value added products and topromote the sustainable use of natural resources. The Commission will, throughthe strategic guidelines and its interactions with Member States and regions,promote the use of Structural Funds and Rural Fund to improve knowledge and

innovation for growth.Member States are invited to take full advantage of the Structural Funds and theEuropean Agricultural Fund for Rural Development to strengthen and build strongresearch and innovation systems.

For more information: http://ec.europa.eu/regional_policy

Structural Funds are designed to help reduce disparities in the development ofregions, and to promote economic and social cohesion within the EuropeanUnion. The European Commission therefore co-finances regional projects in theMember States.Nevertheless, it is important to stress the fact that direct aid to

SMEs to co-finance their investments is only possible in the economically lessdeveloped regions (the co-called convergence regions). In other regions,priority has been given to actions having a high leverage effect (e.g.entrepreneurship training, support services, business incubators, technologytransfer mechanisms, networking, etc.), as opposed to direct aid to individualSMEs.


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European Regional Development FundFor the period 2007-2013 the strategy and resources of cohesion policy aregrouped into three priority objectives, with a total allocation of 336 billion:Convergence: speed up the economic convergence of the less developedregions (78.54% of the budget);Regional competitiveness and employment: strengthen regionalcompetitiveness and attractiveness and help workers and companies to adaptthemselves to economic changes (17.22% of the budget);European territorial co-operation: strengthen cross-border, transnational andinterregional co-operation (3.94% of the budget).

Further details: http://ec.europa.eu/regional_policy/funds/2007/index_fr.htmThe web site of the Directorate-General for Regional Policy providesinformation on the European Union's action in support of regionaldevelopment:http://ec.europa.eu/regional_policy/index_en.htmThis includes:a list of the managing authorities of structural funds in every region:http://ec.europa.eu/regional_policy/manage/authority/authority_en.cfm andhttp://ec.europa.eu/regional_policy/country/prordn/index_en.cfm

European Social FundFor the period 2007-2013, the European Social Fund provides support foranticipating and managing economic and social change, with a number ofopportunities for supporting SMEs. The four key areas for action under theRegional competitiveness and employment objective are:

o increasing adaptability of workers and enterprises;o enhancing access to employment and participation in the labour

market;o reinforcing social inclusion by combating discrimination and

facilitating access to the labour market for disadvantaged people;o promoting partnership for reform in the fields of employment and

inclusion.In the least prosperous regions, the Fund concentrates on promotingstructural adjustment, growth and job creation. To this end, under theConvergence objective, the ESF also supports:

o efforts to expand and improve investment in human capital, inparticular by improving education and training systems;

o actions aimed at developing institutional capacity and the efficiencyof public administrations, at national, regional and local level.

Further details:http://ec.europa.eu/employment_social/esf2000/2007-2013_en.html


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Rural Development FundThe Rural Development Fund for the period 2007-2013 focuses on threethematic axes: improving competitiveness for farming and forestry;environment and countryside; improving quality of life and diversification ofthe rural economy. A fourth axis also introduces possibilities for locally basedbottom-up approaches to rural development.For each set of priorities, Member States prepare national rural developmentstrategies on the basis of the following six community strategic guidelines:1. improving the competitiveness of the agricultural and forestry sectors;2. improving the environment and the countryside;3. improving the quality of life in rural areas and encouraging diversification;4. building Local Capacity for Employment and Diversification;5. translating priorities into programmes;6. complementarity between Community Instruments.

Further details: http://ec.europa.eu/agriculture/rurdev/index_en.htm


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Risk Capital Venture Capital

Risk capital or venture capital is an equity investment and typically involveshigher risk potentially rewarded by higher returns. It is often used by innovativegrowth-oriented firms that often require large amount of financing in order toinvert in R&D, marketing and training. Venture Capital investment were 10,8billion euros in the European Union in 2004 versus 16,5 billion euros in theUnited States of America. The current obstacles for obtaining risk capitals in theEU are the lack of early-stage private investors, the fragmentation of the marketsin Europe, the lack of entrepreneurial spirit and the lack of investment readinessof entrepreneurs.

The European Commission seeks to enhance the functioning of a singleEuropean financial market. Between 2001-2006 financial instruments weredeveloped in the framework of the MAP programme with a budget of 500 millioneuros. Under the Competitiveness and Innovation Programme (CIP), the budgethas increased to 1,1 billion euros for the period 2007-2013.

The financial instruments cover SMEs different needs according to the stage intheir life-cycle:

1. High Growth and Innovative SME Facility (GIF) provides equity toventure capital funds for seed and early-stage investments in SMEs toreduce the gap in early-stage investment by investing in venture capitalfunds.

2.Debt and hybrid instruments: SME Guarantee Facility provides co-andcounter-guarantees to guarantee schemes. These schemes stimulate

the supply of loans to SMEs by credit institutions. It also provides directguarantees to these institutions under four guarantee windows: loans,microloans, quasi-equity and equity and SME securitisation (more info,see below)

3. Capacity building: The Seed Capital Action that finishes in 2006 supports the recruitment of specialised staff by seed capital funds and thePartnership Action will support bank lending, notably in new MemberStates.


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COMMISSION

BEFOREPeriod: 2000-2006

MAP

Budget: 400 million

AFTERPeriod: 2007-2013

CIP

Budget: +/-1 billion

ETF-Start-ups( 170 m) VC early-stage investments

High Growth and InnovativeSME Facility ( +/- 500 m) VC funds:

Early stages Expansion stages for

innovative companies Co-investments in side-

funds with business angels

CIP and EIB risk capitalmandate for theperiod 2007-2013 (est.):10% of the European

VC market (base: 2005 early-stageinvestments EVCA Annual Report).

SME Guarantee Facility ( 340m)

SME Guarantee Facility ( +/-500 m)

Capacity Building( 60 m)

Capacity Building( +/- 100 m)

1. High Growth and Innovative SME Facility (GIF)

The aim of the GIF is to increase the availability of risk capital to innovative SMEsduring their creation and their early stage development.

The EIF invests in specialised venture capital (VC) funds establishedspecifically to provide equity or other forms of risk capital to SMEs. The fundsconsidered under this Facility are small or newly established ones, including fundsoperating at regional level, those focusing on specific industries or technologiesand funds that finance the exploitation of R&D results.

Investments are made on equal termswith other equity investors. The GIFInvestment Guidelines specify that investments must represent between 10% and25% of the total capital of a VC fund or business incubator, or 50% in exceptionalcases such as new funds which are likely to have a particularly strong catalytic rolein the development of VC markets for a specific technology or in a specific region.Investments can be made up to a maximum amount of EUR 10 million. In


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exceptional, duly substantiated cases the amount committed may be higher, butwill not in any case exceed EUR 15 million.

Following the approval of a VC fund proposal by the Commission , the EIFsigns contractual agreements. Thereafter EIF disburses the amounts committed to

the VC funds in accordance with their investment opportunities and correspondingfinancing needs.

According to figures of EVCA (European Private Equity and Venture CapitalMarket Association) European early-stage VC market stands at 2 billion eurostoday. The expected tripling of the European early-stage VC market to 6 billioneuros by 2013 is based on the following assumptions:

2. SME Guarantee Facility

The Facility provides

- support for higher volumes of guarantees for the existing guaranteeproducts of the financial intermediaries (FIs),- access to financing for a larger number of small companies for a wider

variety of investments and guarantees for riskier loans and- supports the creation and development of new guarantee schemes.The Facility covers part of the losses incurred under the guarantees up to a pre-determined amount (the cap). It is managed by the European InvestmentFund and other International Financial Institutions on behalf of the EU. The EIFevaluates and selects potential FIs.

The SME Guarantee Facility applies to companies with up to 100 employees.The FIs may have stricter SME eligibility criteria depending on their specificguarantee or loan products. In any case, the origination and risk assessment, withregard to the final SME beneficiaries, is the full responsibility of the selectedfinancial intermediaries.

New sub-windows to the Facility (to expand the range of available guaranteeinstruments):

Loan guarantees: support enterprises with growth potential and up to 100employees. Under this window, the EIF issues partial guarantees to coverportfolios of loans or guarantees. Micro-credit guarantees: support micro-loansfor very small enterprises with up to 10 employees. Under this window, the EIFissues partial guarantees to cover portfolios of micro loans. Equity Guarantees:counter- or co-guarantees to guarantee schemes to cover equity investments inSMEs with fewer than 250 employees (no direct guarantees to VC funds). SMEsecuritisation: securitisation of SME debt finance portfolios, shall mobiliseadditional debt financing for SMEs under appropriate risk-sharing arrangementswith the targeted institutions. Support for those transactions shall be conditionalupon an undertaking by the originating institutions to grant a significant part of theresulting liquidity of the mobilised capital for new SME lending in a reasonableperiod of time


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One Euro invested by the Commission becomes a total of 75 Euroinvested: Leverage effect

Guarantee schemes in general have a very high leverage effect. Loanguarantees have high leverage as they are often provided in the form of counter-

guarantees to institutions that in turn provide guarantees to other actors such asintermediaries and banks. Due to the risk-sharing between these various actors,the leverage is very high:

SME Guarantee Facility Leverage (gearing)

Table Leverage effect (gearing) achieved at 31.12.2005 with the Communityfunds in terms of estimated volume of loans,

Allocatedbudget

(signed)

Estimatedunderlying loan

volume

supported

Maximum EIFGuarantee

Amount

Leverage effect

EUR EUR million EUR million

Loan guaranteewindow 173.8 12,352.5 3,624.1 75

Micro-creditwindow 32.1 259.1 177.6 8.1

Equity guaranteewindow 17.3 306.3 89.4 17.7

Total 223.2 12,917.9 3,891.1 60.34

MAP: Leverage effect: SMEG: 340*70= +/- 24 bn VC fund: 170*5= 0.85 bn Total = +/- 25 bn

Nb of SME beneficiaries: 250,000

CIP: Leverage effect: SMEG: 500*60= +/- 30 bn VC fund: 500*5= 2.5 bn Total = +/- 32.5 bn (rounded to

30 bn)

Nb of SME beneficiaries: 400,000

It is expected that, some 400 000 small and medium-sized enterprises(SMEs) will receive EU support to invest in all forms of innovation andgrowth between 2007 and 2013.

For more information about SME Guarantee Facility:http://www.eif.org/Attachments/productdocs/loans_guarantee_policy_updated_01.04.pdf


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Commission Funded Activities and Private InformationNetworks

1. European Business Angels Network (EBAN)EBAN was established by the European Association of Development Agencies(EURADA) with the support of the European Commission in 1999. It is a non-profit association which has the purpose of:

Encouraging the exchange of experience among business angelsnetworks and encouraging "best practice"

Promoting recognition of business angels networks Contributing to working out and carrying out local, regional and national

programs of assistance to the creation and development of a positiveenvironment for business angels activities

BAN offers its members a comprehensive and varied set of services: Exchange of experiences and good practices between network managers; Awareness raising in EU and candidate countries on business angel

activity and the benefits of informal venture capital investment; Privileged contacts with the EU through its regular dialogue with the

Commission, in particular DG Enterprise; Economic intelligence and prospective ; European central point on business angel and business angel network

activities in Europe ; European visibility for its member associations; Organisation of high level events : 1 annual awareness Congress, 1

annual Technical Event, and ad hoc meetings on specific topics; A monthly EBAN Flash to keep members up to date with the most recent

evolutions and fresh news on the business angel scene in Europe andworldwide;

A bi-annual EBAN Info, a very complete publication reviewing the actualityof EBAN members and trends in the industry every 6 months;

An annual Statistics Compendium on the activity of business angelnetworks in Europe , keeping track of the number of deals made toevaluate and promote the impact of informal investments onentrepreneurship;

A Yellow Book of the informal venture capital experts that gravitate aroundthe association and constitute our added value in today's knowledge-based society;

Information and the possibility of participating in European projects

For more information visit: http://www.eban.org/European Directory of Business Angel Network in Europe:http://www.eban.org/download/Directory%20of%20Networks%202005.pdf


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2. Business DialogueThis site, created by the European Commissions Directorate-General for theInternal Market, is presented as a one-stop shop for business. It containsinformation on key issues such as public procurement, technical harmonisation,and funding opportunities. It also contains the Single Market rules, preparatorydocuments, an advice section, fairs and exhibitions world-wide, and a BusinessDirectory. Contact: www.europa.eu.int/business

3. CORDIS business incubatorsThe service aims to provide the interested parties with a single entry point to allbusiness incubators in Europe, regardless of type (virtual or real-estate),business sector or location. Its objectives are to:

assist entrepreneurs with new business ideas find the incubators developthese ideas into commercially and technically viable products and/orservices;

facilitate networking among business incubators in Europe, and help national, regional and local authorities to access information on more

than 950 business incubators spread throughout Europe today.Contact: http://cordis.europa.eu/incubators/funding.htm

4. Gate2GrowthGate2Growth is the pan-European Business Platform for:

Entrepreneurs seeking financing (Business Matching), Investors (InvestorNet), Technology Incubator Managers (Incubator Forum), Knowledge Transfer Offices (Proton Europe), Academia in entrepreneurship, innovation and finance (Academic

Network), Innovative companies seeking expert service providers (Service Center)

Contact: www.gate2growth.com

5. International Network for Small and Medium Sized Enterprises (INSME)The International Network for Small and Medium Sized Enterprises-INSME is anon profit Association open to international membership. Its mission is tostimulate transnational cooperation and public and private partnership in the fieldof innovation and technology transfer to SMEs. This is justified by the challengesposed by globalization that force SMEs to strive to be more competitive throughaccessing innovation and technology. Policy Makers and Intermediaries play a

crucial role in assisting SMEs in this respect: Policy Makers provide support through the creation of innovation policies

and by orienting public funding towards SMEs that need innovationservices;

Intermediaries provide more hands-on support, working directly withSMEs to resolve their problems.

Given this scenario, INSMEs role is to create a link between these entities so asto enhance the level of support provided. In doing so, INSME acts as a hub,


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multiplier and disseminator of knowledge, a facilitator for alliances, a promoter ofnetworking and a catalyzer to encourage North-South and South-Southinternational cooperation and political dialogue.INSME was first launched as an informal multistakeolder community gatheringGovernmental bodies, International Organizations and NGOs, Intermediaries andtheir networks acting in the field of innovation, technology transfer and SMErelated issues. In mid-February 2004 the network evolved into an independentlegal entity initially founded by organizations from Italy, Romania, Spain andSwitzerland. Membership in the Association is reserved for the above mentionedcategories. Individual SMEs cannot apply for membership in the INSMEAssociation, but they remain indirect beneficiaries of its activities.The Association provides services and facilities to its Members, some of whichare also made available through this portal. Gathering and dissemination ofinformation are achieved through collaboration and exchange among Members,which may occur through e-mail contacts, discussion in the dedicated rooms ofthe Discussion Group Area of the portal, periodical meetings and conference

calls.For more information visit: http://www.insme.info/page.aspFor financing programs look at:http://www.insme.info/page.asp?IDArea=1&page=financings

6.EUREKAEUREKA is a pan-European network for market-oriented, industrial R&D.Created as an intergovernmental Initiative in 1985, EUREKA aims to enhanceEuropean competitiveness through its support to businesses, research centersand universities who carry out pan-European projects to develop innovativeproducts, processes and services. Through its flexible and decentralized

Network, EUREKA offers project partners rapid access to a wealth of knowledge,skills and expertise across Europe and facilitates access to national public andprivate funding schemes. The internationally recognized EUREKA label addsvalue to a project and gives participants a competitive edge in their dealings withfinancial, technical and commercial partners. Through a EUREKA project,partners develop new technologies for which they agree the Intellectual PropertyRights and build partnerships to penetrate new markets. The EUREKA Clustersplay a key role in building European competitiveness, driving Europeanstandards and the interoperability of products in a wide range of sectors. Eachyear hundreds of individual projects are initiated by European companies, anincreasing number of which are SMEs. These contribute to improved wellbeing,

security, environment and employment in Europe and beyond.BUSANET, a European network of Business Angels, signed a partnershipagreement with EUREKA in 2004. This non-profit making organizations objectiveis to develop funding activities and financial toolboxes to support innovationimplementation in Europe.Each year the EUREKA Lillehammer Award is given to a project that hasdemonstrated its outstanding contribution to the environment. The EUREKA Lynx


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Award goes to the SME that has achieved or expects to achieve a significantincrease in turnover as a result of participation in a EUREKA project.By encouraging and assisting businesses to innovate, the EUREKA Initiativecomplements the European Union's Framework Programme in working activelytowards the common European objective of raising investment in R&D to 3% ofGDP by 2010.For more information look at: http://www.eureka.be/home.doFor financing opportunities look at: http://www.eureka.be/contacts/fundingList.do

7. Trans European Research and Networking and Education NetworkingAssociation (TERENA)TERENA coordinates and carries out technical activities and provides a platformfor discussion to encourage the development of a high-quality computernetworking infrastructure for the European research community.For more information look at: www.terena.nl

8. Joint Research Center (JRC)The mission of the JRC is to provide customer-driven scientific and technicalsupport for the conception, development, implementation and monitoring of EUpolicies. As a service of the European Commission, the JRC functions as areference centre of science and technology for the Union. Close to the policy-making process, it serves the common interest of the Member States, whilebeing independent of special interests, whether private or national.Contact:www.jrc.cec.eu.intEuropean Commission - DG Joint Research CentrePublic Relations Unit, SDME 10/78, B-1049 BrusselsHead of Unit: Ulla ENGELMANN

Tel: +32.2.2957624 Fax: +32.2.2996322Email:[email protected] Sector Head: Ciarn NichollTel: +39.0332.789180 Fax: +39.0332.785409Email:[email protected]

9. G8 Pilot ProjectThe European Unions Information Network for Small and Medium-sized Enterprisesprovides links into Web sites which hold a wealth of information on small and mediumsized enterprises in the European Union. It is part of the G8 Global Marketplace forSMEs Project.

For more information look at:http://europa.eu.int/ISPO/ecommerce/g8/eug7sme.htm

10. ElexportalElexportal provides up-to-date information for non-specialist entrepreneurs andbusiness people, in particular for SMEs about legislative and regulatory mattersaffecting eCommerce matters across the European Union. Access to this portalis currently free of charge. It is possible to register to access various on-line


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services (e-mail alerts; submitting contributions for publication on the portal;accessing the Interactive Forum; and requesting support from the HelpDesk).www.elexportal.com

11. Information SocietyIn 2003, presenting the European e-business Showcases - a sample of 22examples of implementation of e-business in SMEs published under theeEurope2005 Action Plan - Commissioner Erkki Likkanen observed that"More than two-thirds of SMEs use the internet as a business tool. Surveys showthe mid-sized enterprises have already closed the gap with large enterprises andsmall-and micro-enterprises are catching up rapidly (...) But e-business wontcompensate for lack of entrepreneurship and the failure to move with markettrends. The challenges are plenty: new levels of interoperability of technologyand business applications with lower costs will enable businesses to switch fromone collaborative network to another. Technology development in broad bandaccess and 3G mobile communications is emerging as a further driver for new

forms of doing business. "To make e-business more suitable for SMES, there is a need for:

Improving their technical and management skills: training and managerialchange are key issues

Making available appropriate e-business solutions for SMEs Addressing the high cost of ownership of ICT equipment Addressing security and privacy issues Making available SME-specific information on the uses of e-business, to

help them in their investment decisionsContact: europa.eu.int/information_society/index_en.htm

12. Network of European Financial Institutions for SMEs (NEFI)The Network of European Financial Institutions for SMEs (NEFI), which wasfounded in 1999, consists of 11 financial institutions from 11 member states ofthe European Union: ALMI (Sweden), AWS (Austria), Oso/BDPME (France),Finnvera (Finland), Hipoteku Banka (Latvia), ICO (Spain), KfW Bankengruppe(Germany), MCC (Italy), MFB (Hungary), SNCI (Luxembourg) and SZRB(Slovakia). These institutions share a public mission to facilitate the access tofinance for SMEs by offering them financial services and expertise. This missionwas entrusted to them by the government and the legislation in force in theirrespective countries. Other, similar tasks have been assigned to the memberinstitutions in the fields of the environment and infrastructure, among other

things. All NEFI partners act complementarily to and in co-operation with thenational banking system through co-financing, risk-sharing, expertise and advicein order to address shortcomings in the SME financial markets.As a European network of specialised financial institutions, NEFI pursues thefollowing goals:

to maintain a permanent and constructive dialogue on SME financingissues with the European Union institutions or with other SME-relatedEuropean associations and federations


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to provide expertise and advice for the EU and its financial institutions inthe planning and implementation of EU-wide promotional and financingschemes

to facilitate the access of SME clients to both European and nationalfinancing schemes.

In the past year NEFI institutions actively supported and financed a total of morethan 117,000 SMEs all over Europe with about 20 billion of financing in theform of loans and guarantees.

For more information: www.nefi.beMembers contact: http://www.nefi.be/default.asp?m=5&um=0&lan=1&ar=0Brussels contact: NEFI 50, rue Wiertz B-1050 Brussels Tel.: +32 2 287 7600

13. EURADAEURADA is the Association of Regional Development Agencies is a nonprofit-making organisation aiming to promote regional economic developmentthrough dialogue with the European Commission services, interchange of goodpractice among members, transnational co-operation among members, regionaldevelopment agencies as a concept. EURADA gathers around 150 developmentagencies from 25 countries of both the European Union and Central and EasternEurope.

Avenue des Arts 12 Bte 7, B-1210 BRUSSELS, BELGIUMTel. : 32 2 218 43 13 Fax : 32 2 218 45 83E-mail : [email protected] Internet: www.eurada.org

14. FinNETSMEFinNetSME, the Network for Regional SME Finance, is a project designed toencourage an intensive exchange between regional public financiers on how toimprove access to finance for Small and Medium Sized Enterprises. FinNetSMEgathers partners from all parts of the EU - from Spain in the West to Lithuaniaand Latvia in the East, from Greece in the South to Finland in the North.FinNetSME will collect and analyse data on regional financing instruments andcontact points as well as on public financing structures, support services andschemes in the different regions.FinNetSME addresses the need for an inventory of existing good practices inregional SME finance by building a platform for public regional financiers. The

aim is to develop common regional tools and strategies promoting SME accessto finance and to bridge the market gap in SME finance by exploiting the givenfinancial sources in an innovative way. On the practical level, models of regionalSME finance will be elaborated to provide easily available advice on thedevelopment of promotional instruments with EU support. The partners of thenetwork will accumulate their experience in setting up financial and non-financialsupport instruments, co-operation strategies etc. They will develop them into


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templates that can be used in other regions to start corresponding initiatives andestablish similar means.For more information look at: www.finnetsme.org

15. FlexWork - New Ways of Working in Remote RegionsFlexwork offers Handbook of Flexible Working with advice on how to overcomethe problems faced by small companies, Guides to Flexible Working includingchecklists and case studies to guide you and your clients in implementing flexibleworking and Management Briefings covering a wide range of flexible workingtopics relevant to Regional Development Agencies and regional Internet ServiceProviders. Their free publications are aimed to help advisors give practicalguidance to small companies on how to adopt new ways of flexible working.Publications are intended primarily for advisors of small business.They can also help Regional Development bodies and regional Internet ServiceProviders to plan for the introduction of flexible working methods, and fordevelopment of the necessary high speed, flexible telecommunications

infrastructure.For more information look at: www.flexwork.eu.com

16. International Economic Development Council (IEDC)The International Economic Development Council (IEDC) is a non-profitmembership organization dedicated to helping economic developers do their jobmore effectively and raising the profile of the profession. When we succeed, ourmembers create more high-quality jobs, develop more vibrant communities, andgenerally improve the quality of life in their regions.For more information look at: http://www.iedconline.org/

17. CULTURE 2007The programme CULTURE 2007 provides grants to cultural co-operation projectsin all artistic and cultural fields (performing arts, plastic and visual arts, literature,heritage, cultural history, etc.).Further details: http://ec.europa.eu/dgs/education_culture/newprog/index_en.html

18. MEDIA 2007This programme deals with the training of media professionals; the developmentof production projects and companies; the distribution and promotion ofcinematographic works and audiovisual programmes and the support forcinematographic festivals, grants to SMEs which are active in these areas.

Further details: http://ec.europa.eu/comm/avpolicy/media/index_en.html

19. Integrated Action Programme in Lifelong LearningThe Integrated Action Programme in Lifelong Learning for the 2007-2013 periodcovers four specific programmes: COMENIUS for general education activitiesconcerning schools up to the end of the upper secondary level; ERASMUS foreducation and advanced training activities at a higher education level;LEONARDO DA VINCI for all other aspects of vocational education and training;


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and GRUNDTVIG for adult education. The LEONARDO DA VINCI programme isof most direct relevance to enterprises, since it supports innovative trans-nationalinitiatives for promoting the knowledge, aptitudes and skills necessary forsuccessful integration into working life and the full exercise of citizenship.Further details: http://ec.europa.eu/dgs/education_culture/newprog/index_en.html

20. eContentplus(2005-2008)eContentplus Programme has a budget of 149 million (200508) to tackleorganisational barriers and promote the take-up of leading-edge technicalsolutions to improve accessibility and usability of digital material in a multilingualenvironment.The Programme addresses specific market areas where development has beenslow: geographic coverage (as a key constituent of public sector content),educational content, and cultural, scientific and scholarly content. TheProgramme also supports EU-wide co-ordination of collections in libraries,museums and archives and the preservation of digital collections so as to ensure

availability of cultural, scholarly and scientific assets for future use. More about:http://europa.eu.int/information_society/activities/econtentplus/index_en.htm

21. Marco Polo II (2007-2013)The Marco Polo Programme aims to reduce road congestion, to improve theenvironmental performance of the freight transport system within the Communityand to enhance intermodality, thereby contributing to an efficient and sustainabletransport system. To achieve this objective, the Programme support actions infreight transport, logistics and other relevant markets, including motorways of thesea and traffic avoidance measures. The programme has a budget of 400million for the period 2007-2013.

Further details: http://ec.europa.eu/transport/marcopolo/index_en.htm

22. Innovation Relay Centres NetworkA network of centres in the European Union and beyond, providing local help topromote technology partnerships and transfer:The IRCs are innovation support service providers mainly hosted by publicorganisations, to facilitate and promote the transfer of innovative technologiesamong European SMEs.The IRC Network is currently composed of 71 IRCs and 236 regional offices in33 countries.Find your local IRC Contact Point at: http://irc.cordis.lu/whoswho/home.cfm


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EUROPEAN INVESTMENT BANK EUROPEAN INVESTMENT FUND

Venture Capital

Fund

Guarantor

Bank

InvestsLends

Funding sources

EIF selects itsfinancial intermediaries

based on capability,history and solidity

European Commission1.000.000

Operations

European Investment Fund (EIF)

Guarantees

EU Financial Instruments for SMEs

SMEs SMEs

Guarantees

European Commission

Invests

European Investment Bank

JASPERS

The Joint Assistance to Support Projects in European Regions (JASPERS)is a major joint policy initiative of the EIB, European Commission (RegionalPolicy Directorate-General - DG Regio) and the European Bank forReconstruction and Development (EBRD).

JASPERS will assist beneficiary countries (principally the new Member Statesand acceding countries of the EU) to prepare major infrastructure projects whichwill be assisted by the EU Structural and Cohesion Funds over the nextbudgetary planning period 2007-2013. All assistance will be offered free ofcharge. Assistance may be given to prepare individual projects or horizontalstudies that cover more than one project or more than one country.

JASPERS will: be complementary to the project preparation work carried out by national

and local authorities; provide upstream technical expertise as required from the early stages of

programming and preparation through to the final decision to grant EUassistance.


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Key areas for JASPERS include: Trans-European networks (TENs) The transport sector outside of TENs, including rail, river and sea

transport Inter-modal transport systems and their interoperability Management of road and air traffic Clean urban and public transport The environment, including energy efficiency and renewable energy Private public partnerships

Contact:[email protected]://jaspers.europa.eu/


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JEREMIE

The European Commission (Directorate General for Regional Policy), theEuropean Investment Bank and the European Investment Fund have launched a

joint program in order to facilitate financing SMEs in the framework of EuropeanRegions.The acronym JEREMIE is for Joint European Resources for Micro and MediumEnterprises. The program will allow European Member States and Regions toutilize part of their structural funds to attain a set of financial instruments tosupport micro, small and medium enterprises. JEREMIE will make easier theprocess whereby EIF will enable the European Member States and Regions touse the part of ERDF that are allocated to SME access to finance, to obtain a setof financial products specifically engineered for Micro, Small and MediumEnterprises.It will be balanced to other SME finance initiatives at EU level, notably theCompetitiveness and Innovation Framework Program (CIP).

JEREMIE has 3 main financial instruments:1. Advisory, technical assistance2. Equity and venture capital3. Guarantees (for microcredit loans and SME loans)

Under JEREMIE it will be possible to transform part of the grants into financialproducts. SMEs will use the financial products and will then reimburse theamounts - once reimbursed, the funds will be rolled over and used again, insteadof simply granted once. This means that each Euro coming from the budget, thesum of financing products could range from 2 to 10 euros. The multiplier effectwill mean that the sum of the financing products available will be increased,

bringing potential benefit to a higher number of SMEs than the grant system.

JEREMIEs financial products will contribute to meet the financial needs of theSMEs but also improving the supply side by providing a wide range of servicesand products to local financial intermediaries such as technical assistance, loanguarantees, first loss piece guarantees for securitization.

EIF may manage JEREMIE during the financial perspective 2007 to 2013. EIFrole will simplify the administrative process of funds disbursed from ERDF. EIF isa pan-European SME finance platform with wide geographical coverage andleads in several market segments (early stage venture capital investor,

microcredit guarantor). EIF will work with the support of EIB. Additional fundingcapacity will be brought to JEREMIE by the EIB group, for example through SMEglobal loans from the EIB. EIF will act as a mediator for all other sources offinance from other international, national, local financial institutions, investmentfunds, micro-credit agencies and other organizations from both the public andprivate sector. Funds will be channeled through EIF to local financial institutionsthat will in turn provide financing to SMEs. To achieve this EIF will contact andcooperate with local financial intermediaries such as venture capital funds,


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guarantee schemes, banks and micro finance providers as channels for ERDFfunds to reach SMEs. EIF will not provide any direct financial support to SMEs.

On 1st January 2007, JEREMIE will enter its operational phase.

Eligibility Criteria: SMEs have to make investments in fixed assets and long-term working

capital Eligible enterprises are SMEs with the maximum of 249 employees, a

maximum annual turnover of EUR 50 million and/or a maximum annualbalance sheet of EUR 43 million

Preference should be given to small (less than 50 persons; balancesheet/annual turnover less than EUR 1 million) and micro enterprises (lessthan 10 persons; balance sheet/annual turnover less than EUR 2 million)

Eligible SMEs must have a majority private ownership and control or be inthe final stage of the process of privatization.

They must not conduct business in the following activities: gambling, realestate, banking, insurance or financial intermediation and themanufacture, supply or trade in arms, or activities on EIFs or EIBsexclusion lists.

For more information:http://www.eif.org/jeremie/http://ec.europa.eu/regional_policy/events/ifi/documentation.cfm?deploy=0

To request general information on JEREMIE, please send an email [email protected]

For specific requests on JEREMIE, please contact:European Investment Fund, 43 avenue J.F. Kennedy, L-2968 LuxembourgTel.: (352) 42 66 881 Fax: (352) 42 66 88 280


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JESSICA

JESSICA, Joint European Support for Sustainable Investment in City Areas, is aninitiative of the Commission in cooperation with the European Investment Bank(EIB) and the Council of Europe Development Bank (CEB), in order to promotesustainable investment, and growth and jobs, in Europes urban areas.

How JESSICA worksJESSICA will offer the managing authorities of structural funds programmes thepossibility to take advantage of outside expertise and to have greater access toloan capital for the purpose of promoting urban development, including loans forsocial housing where appropriate. Where a managing authority wishes toparticipate under the JESSICA framework, it would contribute resources from theprogramme, while the EIB, other international financial institutions, private banksand investors would contribute additional loan or equity capital as appropriate.Since projects will not be supported through grants, programme contributions to

urban development funds will be revolving and help to enhance the sustainabilityof the investment effort. The programme contributions will be used to financeloans provided by the urban development funds to the final beneficiaries, backedby guarantee schemes established by the funds and the participating banksthemselves. No State guarantee for these loans is involved, hence they wouldnot aggravate public finance and debt.

For two possible approaches, the basic steps leading from the contribution fromthe programme to support for a project on the ground are as follows:

(1) Direct relationship with Urban Development Funds

Managing authorities deciding to use the JESSICA framework will launch one ormore calls for expression of interest, addressed to urban development fundsand the resulting submissions would then be appraised in the usual way.Relevant criteria in this context would include the investments and projects to betargeted, the terms and conditions under which they would be financed,ownership and contributions of co-financing partners of the fund, the justificationand intended utilization of the ERDF contribution, the winding up provisions ofthe fund, etc.As a result of the appraisal, a funding agreement would be signed between themanaging or other authority and the selected urban development fund(s),specifying the terms and conditions, as well as the targeted investments for

allocating resources from operational programmes to them.Urban development funds will select and support PPPs and other urban projects,providing them loans, equity or guarantees, but not grants. It would be possiblefor a given project to be supported partly by the non-grant urban developmentfunds, and partly by public grants (including from operational programmes).Other private banks or investors may also participate. Project promoters could bepublic, municipal or private sector enterprises, or joint enterprises involving theseactors in any possible combination between them. The funds will monitor


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implementation of projects by final beneficiaries. They will report to the managingauthorities on their activities (selection of projects, implementation by finalbeneficiaries).

(2) Organising JESSICA through Holding FundsManaging authorities have the possibility to organise financial engineering forsustainable urban development through the intermediary of holding funds.Holding funds are those investing in more than one urban development fund,providing them with equity, loans or guarantees. In such cases, the authoritieswill have the option of awarding a grant to the EIB entrusting it with the holdingfund tasks.A funding agreement would be signed between the Member States ormanaging authorities and the holding fund, specifying the terms, conditions,targeted investments, etc. Holding funds invest in more than one urbandevelopment fund, providing them with equity, loans or guarantees. Urbandevelopment funds are funds investing directly in public-private partnerships

(PPPs) and other projects in the urban context. Projects approved by the fundsfor support will be financed only through equity or loans, and not through grants.It is envisaged that a pre-condition would be that projects would be supportedonly in the context of an integrated plan for sustainable urban development.Urban development funds will be co-managed by professionals of the bankingand private sector, who should contribute financial, technical and managerialexpertise and flexibility to the management of projects co-financed by theEuropean Regional Development Fund.

For more information visit:http://ec.europa.eu/regional_policy/funds/2007/jjj/jessica_en.htm


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Venture Capital European Investment Fund (EIF)

The EIFs venture capital instruments consist of equity investments in venturecapital funds that support SMEs, particularly those that are in their early stages ofdevelopment and those that are technology-oriented.

EIF has significant means available for investment with a current portfolio of inexcess of 2,55 billion euros invested in 191 venture capital funds and anobjective to invest substantially more in the region over the next years.

There are two sources of funding: Capital from the EIB Group (EIB and EIF) Capital from the European Commission is allocated under two different

programmes: ETF Start-up Facility and Seed Capital Action

For the list of investments:http://www.eif.org/venture/vinter/

1. EIF and EIB Resources for venture capital

EIB Group (EIB and EIF) resources for venture capital are managed by the EIFas part of the Amsterdam Special Action Programme and the Innovation 2000Initiative.

EIF aims to invest in: Independent management teams that raise funds from a wide range of

investors in order to provide risk capital to growing Small and Medium-sized Enterprises.

Funds targeting early stage companies that are developing or usingadvanced technologies in industry or services.

Investment TargetWe seek a minority position of between 10 and 35% of the total capitalcommitted in a fund. The exact size of the EIFs investment varies according tothe size and characteristics of each fund.

Eligibility CriteriaThe EIF requires that its portfolio funds:

Raise at least EUR 15 million. Focus principally their investments in the EU and the Acceding/Accession

Countries. Focus primarily their investments on early-stage, development or

expansion capital, preferably in technology-oriented SMEs. Target mainly SMEs, defined as businesses with less than 250

employees, with total turnover not exceeding EUR 50 million or a balance


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sheet total not exceeding EUR 43 million, and that are independent (i.e.not owned by more than a third of their capital by non-SMEs) at the time ofthe funds first investment. In exceptional cases, a targetof enterprises with more than 250 employees can be considered.

Be mainly independently and professionally managed, i.e.:Selection/monitoring by a dedicated management team of professionalswith appropriate experience and skills; Investment/divestment decisionstaken either by the management team and/or by an independent boardwhose members are independent from the investors.

Provide a risk-adjusted return in line with that of the private equity market. Be mainly funded by Private sector investors, with the Public sector

investors (including the EIF) not exceeding 50% to total committed capital.

For further information:http://www.eif.org/venture/eibres/product.asp?prod=87

2. European Commission Resources

A, ETF Start-upETF Start-up is intended to adopt a higher risk profile than the EIB Groupoperations. It aims to invest in venture capital funds such as:

seed capital funds business incubators smaller or newly established funds funds operating regionally funds focused on specific industries or technologies funds financing the exploitation of R&D results (i.e. funds linked to

research centres and science parks)

The investment target for ETF Start-up Facility is a minority position of between10 and 25% of the total capital committed in a fund or business incubator. Amaximum amount of EUR 10 million will be invested in any single fund/incubator(15 million in justified cases). Venture capital funds and incubators will need to beable to support adequate professional management, make a sufficient number ofinvestments and be in a position to provide follow-up finance. Funds/incubatorswill be required to raise at least EUR 10 million, however for justified cases theETF Start-up Facility may be available to smaller funds/incubators of EUR 5

million upwards.

Eligibility Criteria:ETF Start-up will invest in specialized Venture Capital funds and BusinessIncubators established specifically to provide equity or, as is the case forBusiness Incubators, operational support to SMEs with growth potential at theirestablishment and early stages (including seed capital). In particular, ETF Start-up focuses on funds and incubators that:


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