How the European Union invests in innovative projects

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Navigating through the countless EU projects for promoting investments into innovative companies can be challenging for entrepreneurs. The reality is that most of the direct financing takes place on a local level  – the best source to identify these financial intermediaries that have accessed European funding to finance local companies are listed directly on the official EU database , where both private and public funds offering grants, equity or debt instruments can be found.

Some larger projects, mostly relevant for SMEs and governmental institutions, may be financed directly by the EU funding programmes for eco-innovation. For example Horizon2020 invests into research & development in a variety of areas, with a special focus on projects beneficial to the environment, and publishes calls for research proposals directly on the web. LIFE funds individual innovation projects as the EU’s funding instrument for the environment and climate action.

However, the R&D funding instruments most accessible by EU businesses are offered in the EUREKA Network, namely Eurostars, supporting the development of rapidly marketable innovative products, and Celtic-Plus that funds cross-border European R&D projects in telecommunication and ICT.

The European Bank for Reconstruction and Development (EBRD) offers financing instruments for direct investments in companies, for instance with equity investments ranging from €2 million to €100 million in industry, infrastructure, and the financial sector, which can be accessed by contacting local fund managers supported by the EBRD.

The European Angels Fund (EAF) is another greatly beneficial instrument that can be granted directly to approved business angels for the financing of innovative companies in the form of co-investments. There are many other programmes that fund intermediaries through the European Investment Fund (EIF). The initiative InnovFin mostly funds intermediaries for innovative SMEs projects through debt instruments, guarantees and equity through venture capital firms. COSME, similarly, offers both equity and loan guarantees mainly through intermediaries, with a variety of additional resources, while the European Structural and Investment Funds (ESIF) are aimed at economic development projects funded through local governmental institutions and implemented by the European Investment Bank. Additional information on the EU’s financial instruments can be found on the Fi-Compass platform for advisory services.

 

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