InvestEU: EIF support to strengthen Europe’s cultural and creative businesses with a strong boost to the audiovisual sector

• EIF investments and guarantee agreements worth €68.25 million will facilitate access to finance for these sectors via intermediaries from Spain, France, and Luxembourg.
• These agreements are supported by the InvestEU programme, which aims to trigger more than €372 billion in additional investments over the period 2021-2027.
• One of the approved transactions is the first under the InvestEU MediaInvest instrument, which seeks to mobilise private investors and increase equity investment volumes.

On the sidelines of the 71st San Sebastian Film Festival, the European Investment Fund (EIF) and the European Commission announced a series of agreements that will boost SMEs and small mid-caps in Europe’s cultural and creative sectors. These EIF transactions backed by the InvestEU programme total €68.25 million and will facilitate access to finance for these businesses via intermediaries from Spain, France, and Luxembourg. They are expected to mobilise around €500 million of new financing for cultural and creative businesses and projects.

The first transaction announced has been signed by the EIF and Compañía Española de Reafianzamiento (CERSA), a Spanish non-profit promotional counter-guarantee institution and long-standing partner of the EIF operating across all regions in Spain. CERSA will benefit from a €20 million EIF guarantee line under the InvestEU Cultural and Creative Sectors Guarantee Facility (CCS GF). The European Union's support is expected to leverage a portfolio of around €230 million of counter-guarantees, enabling the network of Spanish mutual guarantee institutions to offer enhanced access to finance in the cultural and creative sectors in Spain (including film, theatre, video game production, music and performance, and editorial fields). The loans to be made available to SMEs will translate into increased support for their ecosystem which often faces difficulties in accessing finance due to the limited size of the market and demand uncertainty, among other issues.

The second transaction also covers Spain as the EIF has approved a transaction with CREA, a private mutual guarantee institution addressing financial challenges faced by SMEs in the audiovisual sector and with CERSA as coordination entity. EU support will come from a €15 million EIF guarantee line under the CCS GF product that is expected to leverage a portfolio of around €145 million of guarantees, to be issued by CREA, which will provide these guarantees to SMEs and small mid-caps operating in the audiovisual sector on more favourable terms, enabling these companies to scale up their activities.

In addition, the EIF has signed an agreement with MDDG S.à.r.l., a new Luxembourgish fund manager specialised in investments in the audiovisual sector, mainly financing the co-production of projects like films and TV series. This deal is materialised through a €8.25 million EIF guarantee line under the CCS GF product that aims to leverage a portfolio of around €50 million in financing. MDDG will act as a general partner of its investment vehicles ‘The Archers’ and ‘The Archers Production’.

Lastly, the EIF has approved an equity investment of up to €25 million into the Logical Content Ventures fund. This is the first transaction approved under the InvestEU MediaInvest equity investment instrument (part of the InvestEU equity programme) which aims to mobilise private investors and increase equity investment volumes to strengthen the competitiveness of the audiovisual industries in Europe — supporting total investments of €400 million over the period 2022-2027. Logical Content Ventures is an alternative investment fund managed by the French company Logical Pictures SAS and finances content production across Europe, focusing on films, TV series and impact content – dealing with women’s empowerment, diversity and human rights, among others.

The fund aims to raise up to €70 million and will benefit from a co-investment partnership with Pathé, a French film production and distribution company. It is expected that the EIF’s role as anchor investor will trigger a cascading effect across the EU alternative investment ecosystem that will boost investment in the audiovisual sector, encouraging the creation of audiovisual equity funds.

The European audiovisual sector is characterised by highly innovative and creative independent production and distribution companies with high growth potential. These businesses often lack the financial strength to compete at international level and their potential tends to be off the radar of European investors. All agreements presented aim to address a market failure in the cultural and creative sectors and boost these businesses through financing and stimulating more investment.

“We are thrilled to support the European cultural and creative sectors through a series of agreements backed by the InvestEU programme, that are in line with the European Union’s top priorities like employment, growth and social cohesion”, said EIF Chief Executive Marjut Falkstedt. “Strong cultural and creative sectors play a critical role in our sense of European identity and values, so we are very glad to join forces with our partners to extend financing on beneficial terms for businesses that traditionally struggle with access to finance, thereby promoting creativity and making culture count.”

Commissioner for the Internal Market, Thierry Breton, said “Preserving a robust and independent European audiovisual industry is one of our best asset to defend our cultural diversity. The MediaInvest instrument, which I launched in Cannes last year, fulfils that. I am glad to see that the very first MediaInvest agreement has been signed. I look forward to seeing more deals to be concluded and achieve our target of crowding in up to €400 million in private investment to foster European audiovisual production and distribution and help companies better exploit their intellectual property assets.”

Background information

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and micro-finance instruments that specifically target this market segment. In this role, it contributes to the achievement of key EU policy goals such as competitiveness and growth, innovation and digitalisation, social impact, skills and human capital, climate action and environmental sustainability.

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for the European Union’s policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.

Press contacts:

EIF:
Maite Cordero, m.corderomunoz@eib.org, tel. +34 606 66 82 62
José Vicente Alzola, j.alzola@ext.eib.org, mobile: +34 608143903
Website: www.eif.org — Press Office: +352 4379 21000 — press@eib.org
Twitter @eif_eu 

European Commission:
Flora Matthaes, tel.: +32 229 83951, flora.matthaes@ec.europa.eu
https://investeu.europa.eu, #InvestEU
Sofia Lucini de Torres, tel.: +32 229-69021, Sofia.LUCINI-DE-TORRES@ext.ec.europa.eu