Risk-sharing finance facility

Financial markets and financial institutions are traditionally reluctant to invest in R&D projects. This is due to the fact that there is a higher uncertainty/risk for R&D projects, compared to more traditional business projects.

In order to improve access to loans for R&D projects, the Community proposed the Risk-Sharing Finance Facility (RSFF), consisting in the financial collaboration between the European Commission and the European Investment Bank (EIB). The RSFF aims to improve access to the EIB debt finance for participants of European R&D projects.

Such a mechanism was specifically called for by the European Council in its decision on the Financial Perspectives for 2007-2013.

The Risk-Sharing Finance Facility was thus signed on 5 June 2007 between the European Commission and the EIB .

Sharing the risk between the Commission and the EIB allows the RSFF to produce additional loans for R&D projects. Moreover, projects with a higher risk than would otherwise be possible for the EIB are also considered. The loans will benefit those R&D projects (including infrastructure projects) which have a strong European dimension.

Moreover, the EU contribution can be reused over time and hence stimulate loans over an extended period.

Partners may approach EIB either individually or through joint legal entities. Beneficiaries may thus include large companies, SMEs, public and private research organisations, public-private partnerships.

Partners in large projects supported by FP7, such as joint technology initiatives, collaborative projects and research infrastructures, will be automatically eligible. Eligible requests will then be examined by the EIB according to the usual banking practice.

The European Commission has defined a precise eligibility criteria and has set up an eligibility panel.

In addition to benefiting riskier projects, the RSFF aims to having a demonstration effect: R&D stakeholders and financial institutions will learn to work together, paving the way for further R&D loans in Europe.

This will have as a consequence to benefit all private and public organizations involved in R&D by:

Increasing the total volume of funding available for R&D projects
Allowing public subsidies to focus more on R&D activities unsuitable for loans but with a substantial value to society

RSFF Film, including Commissioner Máire Geoghegan-Quinn's and EIB President Philippe Maystadt's presentations

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Longer version of the RSFF Film in English with subtitles in French or German (8 minutes - on the EIB web site)