EIF and Banco BPI sign the first InnovFin guarantee agreement in Portugal under Horizon 2020 to finance innovative companies.

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The European Investment Fund (EIF) and Banco BPI have signed an agreement to increase lending to innovative small and medium-sized enterprises (SMEs) as well as Small Mid-caps under InnovFin – EU finance for innovators, an initiative supported by the European Commission.

The new agreement allows Banco BPI to provide innovative companies in Portugal with access to a total of EUR 200m of financing over the next 2 years with the support of a guarantee provided by the EIF and backed under Horizon 2020, the EU Framework Programme for Research and Innovation. This is the first InnovFin SME guarantee signature in Portugal and second in Europe, enabling Banco BPI to offer innovative companies additional financing at favourable conditions.

Commenting on the signature, EIF Chief Executive, Pier Luigi Gilibert said: “I am pleased to be signing our first Portuguese InnovFin SME Guarantee agreement here in Lisbon with Banco BPI shortly after we have announced this new Europe-wide programme. Following this agreement, we are convinced that we will be able to support even more innovative businesses in Portugal in the coming years”.

European Commissioner for Research, Science and Innovation Carlos Moedas said: “I am very happy that this agreement will extend a significant line of credit to innovative companies in Portugal of about EUR 200m for the next two years. Innovation is the key driver for growth and jobs in Europe and Horizon 2020 is its major European policy tool. By giving access to finance for research and innovation in small and medium-sized companies, we support investments in growth and jobs for Portugal and the EU.”

Banco BPI, Chief Executive, Fernando Ulrich added: “BPI is the leading EIB Group business partner in Portugal in the provision of medium and long term facilities to SMEs and “mid-caps”. This position has been built on the basis of effective delivery of all transactions and operations signed earlier, in particular the innovative Risk Sharing Initiative launched by the EIF in cooperation with the European Commission. We are pleased with the fact that again BPI has been the first bank in Portugal to be selected by the EIF for implementation of InnovFin SME Guarantee. I can assure you that we remain committed to maintain this level of performance in the years ahead.”  

The aim of the InnovFin SME Guarantee is to encourage banks or other financial institutions to lend to SMEs and small mid-caps (firms with fewer than 500 employees) in need of investment and/or operating capital to finance research, development and innovation activities, with EU financial support. Financial institutions are being selected by the EIF following a call for expression of interest for financial intermediaries across Europe.

In October this year the European Investment Bank (EIB) has also signed with Banco BPI a EUR 300m Credit Facility for financing investment projects throughout Portugal mainly undertaken by SMEs and mid-caps, which can be combined with the InnovFin guarantee Agreement, hence leveraging the support to those companies and enhancing further access to finance by innovative businesses in Portugal, and fostering sustainable economic growth.

About InnovFin SME Guarantee

InnovFin SME Guarantee provides guarantees and counter-guarantees on debt financing of between EUR25,000 and EUR7.5 million, in order to improve access to loan finance for innovative small and medium-sized enterprises and small midcaps (up to 499 employees). The InnovFin SME Guarantee is implemented by the European Investment Fund, and will be rolled out through financial intermediaries (banks and other financial institutions) in EU Member States and Associated Countries. Under the InnovFin SME Guarantee, financial intermediaries will be guaranteed by the EIF against a proportion of their losses incurred on the debt financing. InnovFin SME Guarantee is part of InnovFin - EU Finance for Innovators, a new range of EIB Group (including EIF and EIB) products to facilitate access to finance for innovative businesses. This transaction is supported with the financial backing of the European Union under Horizon 2020 Financial Instruments.

About the EIF

The European Investment Fund's (EIF) central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance.  EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. EIF’s total net commitments to private equity funds amounted to over EUR 7.9bn at end 2013. With investments in over 435 funds, EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. EIF’s guarantees loan portfolio totalled over EUR 5.6bn in over 300 operations at end 2013, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.

About BPI

BPI is the third major Portuguese bank with a market share of 10% in deposits and loans and above 15% in asset management. It is one of the leading banks in the support of the most performing SMEs in Portugal in the framework of the several incentive programs made available by the Portuguese State to mitigate the impact of the economic crisis. BPI was the 1st financial institution launching a Risk Sharing Instrument facility in Portugal (RSI). Under the RSI programming period, BPI approved over 240 loans totalizing €160 million that supported 220 innovative SMEs throughout Portugal. In the Comprehensive Assessment and EU-wide stress tests conducted by the European Central Bank (ECB) and the European Banking Authority (EBA) in the framework of the recently introduced EU Single Supervisory Mechanism, BPI ranked as a performing bank achieving solid results under all relevant criteria.

About Horizon 2020

On 1 January 2014, the European Union launched a new research and innovation funding programme called Horizon 2020. Over the next seven years almost EUR 80 billion will be invested in research and innovation projects to support Europe’s economic competitiveness and extend the frontiers of human knowledge. The EU research budget is focused mainly on improving everyday life in areas like health, the environment, transport, food and energy. Research partnerships with the pharmaceutical, aerospace, car and electronics industries also encourage private-sector investment in support of future growth and high-skilled job creation. "InnovFin – EU Finance for Innovators", the new generation of EU financial instruments and advisory services was developed under Horizon 2020 to help innovative firms access finance more easily. "InnovFin – EU Finance for Innovators" will help to inject up to EUR 48 billion in investments in Research and Innovation across Europe.

Press contacts:

EIF: David Yormesor
Tel.: +352 42 66 88 346, e-mail: d.yormesor@eif.org

BPI: Margarida Troni

Tel. +351 21 923 97 00, e-mail: mtroni@llorenteycuenca.com