Yksi European Bioeconomy Scene -konferenssin puheista. One of the speeches in European Bioeconomy conference. Konferenssin ohjelma/Conference programme: https://www.bioeconomy.fi/wp-content/uploads//2019/06/EUBioScene_programme.pdf

1. 1Innovation Finance Advisory | European Investment BankEuropean Investment Bank 1European Investment Bank 1
Innovation Finance for the Circular
Bioeconomy
Shiva Dustdar, Head of Innovation Finance Advisory
European Investment Bank
European Bioeconomy Scene
Helsinki, 9 July 2019

2. 2Innovation Finance Advisory | European Investment BankEuropean Investment Bank 2
EIB at a Glance
The EU bank:
• Established in 1958
• Shareholders are the 28 EU Member States
• Around 90% of lending within the EU
World’s largest International Financial Institution:
• Largest multilateral lender
• Largest multilateral capital markets borrower
• Primarily focused on EU but with large operations outside
Total
investments
supported
in 2018:
EUR 230bn
Lending
volume in
2018:
EUR 55.6bn
Capital
markets
funding in
2018:
EUR 60bn
Solid credit fundamentals:
• AAA-rated by the three major rating agencies
• Favourable borrowing conditions passed on to clients
Key lending priorities (2018 levels of investments – EIB Group):
ENVIRONMENT
EUR 15.2bn
INFRASTRUCTURE
EUR 12.3bn
INNOVATION
EUR 13.5bn
SMEs
EUR 23.3bn

3. 3Innovation Finance Advisory | European Investment BankEuropean Investment Bank 3
Financing the Circular Bioeconomy

4. 4Innovation Finance Advisory | European Investment BankEuropean Investment Bank 4
Sector definition: Bioeconomy
Unlocking production potential in a sustainable and resource-efficient manner
Counterparts/Beneficiaries/3rd parties:
 Any economic actor along the agriculture and bioeconomy value chain:
 Farmers, fishers, forester and SMEs
 Cooperatives
 Agribusiness
 Corporates active in bioeconomy up and down stream value chains
 Public Sector Institutions

5. 5Innovation Finance Advisory | European Investment BankEuropean Investment Bank 5
Lending priorities: Bioeconomy
EIB’s bioeconomy sector finance follows EIB lending priorities:
 SMEs/Midcaps
• Investments by SMEs + Midcaps
 Knowledge economy
• Corporate research, development and innovation programs, pilot
plant and first in kind industrial scale up facilities
 Renewable energy and energy efficiency
• RE generation, renewable materials production, energy efficiency
 Environment and climate
• Projects with environmental and climate action externalities
 Cohesion
• Investments in infrastructure and productive assets
 Development mandates
• Private sector development and infrastructure
• Support to Sustainable Development Goals

6. 6Innovation Finance Advisory | European Investment BankEuropean Investment Bank 6
EIB lending to Agri-Bioeconomy 2014-2018
3.9
5.8
6.8
4.1
4.8
1.3
1.1
2.2
1.1
1.9
7%
9%
12%
7%
12%
0%
2%
4%
6%
8%
10%
12%
0
2
4
6
8
10
12
2014 2015 2016 2017 2018
EURBillion
Allocations Operations % EIB total lending

7. 7Innovation Finance Advisory | European Investment BankEuropean Investment Bank 7
Advisory Services for the Circular
Bioeconomy

8. 8Innovation Finance Advisory | European Investment BankEuropean Investment Bank 8
Who We Are: Innovation Finance Advisory
https://www.youtube.com/watch?v=cj9_KCguA3E

9. 9Innovation Finance Advisory | European Investment BankEuropean Investment Bank 9
 Improve framework conditions for
financing (e.g. through involvement in
multi-stakeholder forums)
 Knowledge sharing & capacity building
(e.g. in dedicated conferences)
 Prepare studies to identify market barriers
and funding gaps (e.g. access-to-finance
studies for CE, Bio-based Industries)
Market Consultations
 Support in CE project pipeline development
 Review projects, identification of gaps/
weaknesses, advise on improvements
 Advise on other critical business areas
(e.g. RDI governance & strategy, etc)
 Advise on financing options within and
outside the EIB Group
 Facilitate contacts to relevant market actors
Project Advisory
Pipeline
Development
/ Project
Advisory
Support to
Finance the
Circular
Bioeconomy
 Improve Project
Soundness/ Bankability
 Leverage market consultations to
identify funding gaps
 Where necessary, recommend internal
EIB-managed instruments and/or
Investment Platforms (IP)
 Structure/ implement IP that mobilise
public/ private investors
Develop Financial Instruments
Knowledge
developme
nt / sharing
Transfer of
Lessons
Learned
Investment Platform for
the Circular Bioeconomy
Innovation Finance Advisory:
A multi-dimensional approach to filling the Circular Bioeconomy funding gaps
Circular Bioeconomy
Investment Platform
 Funding Gap Analysis
Access to Finance studies for:
Bio-based Industries and the Blue
Economy (Jun-2017)
Circular Economy
(Dec-2015)
EUR 40m to a highly
innovative Irish midcap
focusing on antibiotics-free
feeding to animal farms.

10. 10Innovation Finance Advisory | European Investment BankEuropean Investment Bank 10
EIB grants EUR 40m loan to Devenish
August 2018
InnovFin Advisory support
 Identified optimal funding structure to
support ambitious growth plans
 Elaborated financial projections, tested
assumptions and prepared due diligence
 Assessed business model, including RDI value
 On-site advisory mission
Project Advisory Support Example
Devenish: An innovative agri-technology company
 Largest ever EIB and first EFSI support for agri-
business sector in Ireland
 Support for EUR 118m of new investment
 Construction of a new purpose-built Global
Innovation Centre in County Meath, Ireland
 Boost for innovation and research into
optimised animal nutrition, food innovation,
health and sustainability
High-growth midcap with ca EUR 220m turnover (2017)
Global leader, trading in 30+ countries, market leader in
animal feed nutrition in UK and Ireland for the last 20 years
Development and delivery of sustainable and innovative
antibiotic-free nutritional products and solutions for the
feed industry, the food industry and for human health
Innovative products such as chicken fed with Omega 3
commercialised by Waitrose in the UK (IP protected)
Annual RDI expenditure ca. 20% of sales
“We take great pride that EIB have the
confidence to support not just the
future of Devenish, but the future of
the Irish agri food sector overall.”
- Richard Kennedy, Group CEO

11. 11Innovation Finance Advisory | European Investment BankEuropean Investment Bank 11
Circular Bioeconomy
From market study to financial instrument
Study Publication
Q4 2017 H1 2018 H2 2018 2019
Launched @
Innovative
Enterprise
Malta 2017
Market Consultation
Q3 2017
6th December 2017 Financing the
Circular Bioeconomy: Structuring
an Investment Platform to
Improve Access to Finance in
Europe
Identification of 2 key
funding gaps, in
projects moving from
pilot to demonstration
phases and from
demonstration to
commercial phases
150-participant workshop and
bilateral consultations provided
key market inputs on design,
structure and features of the TIP –
reflected in documentation
Fund Structure
European Commission and EIB
actively managing the process of setting up the CBIP
- Fund manager
selected
- Contract
negotiations
- Platform set-
up/launch
Target first closing
Current
Status
Launch of Call for
Expression of Interest

12. 12Innovation Finance Advisory | European Investment BankEuropean Investment Bank 12
STUDY ON ACCESS TO FINANCE FOR INNOVATION ALONG
THE AGRI FOOD VALUE CHAIN
Pick up a copy and/or visit
our website:
https://www.eib.org/en/pu
blications/feeding-future-
generations-executive-
summary
t

13. 13Innovation Finance Advisory | European Investment BankEuropean Investment Bank 13
Key Findings of the Agri-Food Study
Risk-averse and cautious segment of the European economy
Significant barriers prevent most agri-food producers from taking on new technologies
Strong Potential
for Digital, Data-
Driven Solutions
Complex Funding
Landscape:
funding and
knowledge gap
A Predominantly
Risk-Averse and
Cautious Sector
Key messages Key Findings
1
2
3
4
5
6
7
8
Digitalisation, consumer health and sustainability are the key drivers of disruptive innovation
Innovation is most intensively driven by highly versatile, small agri-food developers
In food processing and packaging incremental innovation is prominent
Data-driven technologies and services are key innovations for integration along the value chain
10
9
The European funding landscape is fragmented and highly complex
Importance of specialisation and sector experience; only few equity investors have so far entered
the market
Finance needs to go hand in hand with knowledge
Obtaining finance for growth is a key challenge

14. 14Innovation Finance Advisory | European Investment BankEuropean Investment Bank 14
Key Recommendations of the Agri-Food Study
Strengthen crowdfunding
Develop new/strengthen existing crowd lending platforms dedicated to
financing agri-food innovators
Facilitate access to risk-bearing/patient capital for innovators
Enable the issuance and securitisation of mini-bonds to share risks and
unlock investments for the adoption of agri-food innovations
Explore the development of a dedicated risk-sharing financial
instrument
Explore the development of a purpose-driven (risk-sharing) financial
instrument dedicated to digital/data-driven agri-food innovators
Support the ecosystem on digital transformation
Empower Digital Innovation Hubs (DIH) to further prioritise their
support activities for digitalisation along the agri-food value chain
Support the ramp-up of technologies/innovations
Support the broader rollout of field labs to increase the take-up/scale-
up of promising technologies/innovations
5
1
4
2
3
Accesstofinance
SoftMeasuresto
CatalyseInnovation

15. 15Innovation Finance Advisory | European Investment BankEuropean Investment Bank 15
Get in touch with us!
Don’t hesitate to contact us:
innovfinadvisory@eib.org
www.eib.org/innovfin
Shiva Dustdar
Head of Division
Innovation Finance Advisory
Advisory Services Division
Phone: (+352) 4379 87316
Fax: (+352) 4379 57316
E-Mail: s.dustdar@eib.org
European Investment Bank
100, boulevard Konrad Adenauer
L-2950 Luxembourg

16. 16Innovation Finance Advisory | European Investment BankEuropean Investment Bank 16
Disclaimer
This presentation is incomplete without reference to, and should be viewed solely in conjunction with,
the oral briefing provided by the European Investment Bank (“EIB”).
The terms and conditions are intended as an outline for discussion purposes only and made on an
indicative basis. This presentation is provided without any liability whatsoever by EIB and shall not
constitute any obligation of EIB to extend credit facilities or to carry out a due diligence review of the
aspects relevant for the financing of a project.
Neither this presentation nor any of its contents may be duplicated, published or used for any other
purposes without the prior written consent of EIB.
European Investment Bank

17. 17Innovation Finance Advisory | European Investment BankEuropean Investment Bank 17
Annex

18. 18Innovation Finance Advisory | European Investment BankEuropean Investment Bank 18
Financing the Circular Bioeconomy

19. 19Innovation Finance Advisory | European Investment BankEuropean Investment Bank 19
EIB products available throughout a company’s lifecycle
Pre- seed
Stage of developmentStartup SMEs and Small
MidCaps
<250 employees
Small MidCaps
and MidCaps
250-500
Large MidCaps
500-3,000
Emerging Large Caps
Seed stage
First “Valley of Death”
Second “Valley of Death”
Accesstofinance
Fundingsize(EURm)
Intermediaries (Funds)
Intermediaries (Banks)
Global Loans
Investment Loans
Contingent Loans
Quasi-equity
Co-investments/DirectEquity
TechTransfer/VC
VC/SMEFunds
VC/SMEFunds
PE/MidCapFunds
< 1.0m
< 7.5m
< 10m
< 25m
Innovation finance gap
Growth Finance Gap – expansion capital
EUR 7.5m-25m

20. 20Innovation Finance Advisory | European Investment BankEuropean Investment Bank 20
EIB lending products for Bioeconomy
Framework loans:
‣ Rural development programme loans: co-finance operational programs with
European Agricultural Fund for Rural Development
‣ EXAMPLE: (i) RDP co-financing; (ii) Rehabilitation of Brownfield Areas Germany
Multi-Beneficiary Intermediated Loans (MBIL):
‣ Finance SMEs and microenterprises through credit lines to intermediated Banks
‣ EXAMPLE: MBIL Comunidades de Regantes Spain
Project loans:
‣ Typically used to finance a single large investment project (over EUR 25m)
‣ To private companies (including mid-caps through dedicated Agriculture Program
Loan) active in the bio-based industries
‣ To public entities or concessionary PPPs to invest in public, agriculture-related
infrastructure
Financial Instruments
‣ Blending of public and private funds

21. 21Innovation Finance Advisory | European Investment BankEuropean Investment Bank 21
Agriculture & Bioeconomy Program Loan
Description
• Program Loan amounting to EUR 400m under the European Fund of Strategic
Investments (EFSI).
(i) Enables focus on the sector
(ii) Targets any size corporates and small cooperatives
(iii)Targets smaller projects (investment cost between EUR 15m- 200m)
(iv)Streamlined approval process (Programme Loans are a delegation mechanism
from the Board of Directors to the Management Committee
The Operation
• Programme Loan targeting to support companies active in Agriculture and
Bioeconomy in the EU countries and investing in:
(i) Innovation
(ii) Economic and Social Cohesion regions
(iii)Environmental Protection and Natural Resource Efficiency (including Climate
Action)
(iv)Renewable Energy and Energy Efficiency (including Climate Action)

22. 22Innovation Finance Advisory | European Investment BankEuropean Investment Bank 22
EIB lending to agri-bioeconomy 2014-2018
EU vs non-EU

23. 23Innovation Finance Advisory | European Investment BankEuropean Investment Bank 23
EIB lending to agri-bioeconomy 2014-2018
Sectoral split

24. 24Innovation Finance Advisory | European Investment BankEuropean Investment Bank 24
Advisory Services for the Circular
Bioeconomy

25. 25Innovation Finance Advisory | European Investment BankEuropean Investment Bank 25
EIB’s Bioeconomy access-to-finance study
The European Commission (DG RTD) mandated the EIB’s IFA to explore access-to-finance
conditions and potential funding gaps in the Bioeconomy
Methodology
• Interviews with Project Promoters: 43 projects (27 BBI, 16 BE).
• Interviews with Financial Market Participants: 16 interviews.
• Mapping of available Public Financial Instruments.
Findings
• Bioeconomy projects face issues accessing private funding.
• Project promoters and financial market participants perceive lack of regulatory support to the
industry.
• High perceived industry/ market risks by project promoters and financial market participants alike.
• Sustainable nature and future growth potential of Bioeconomy attractive to investors, yet
perceived as risky.
• Identified funding gaps : (1) from pilot to demo; (2) from demo to industrial scale.
• Need for policy actions and innovative funding that supports the development of integrated value
chains on top of existing public financial instruments.

26. 26Innovation Finance Advisory | European Investment BankEuropean Investment Bank 26
EIB’s Bioeconomy access-to-finance study
An effective, stable and supportive regulatory framework for the Bioeconomy is
essential.
Reinforce awareness of existing risk-sharing financial instruments that can match the
funding needs of certain Bioeconomy projects.
Develop a new EU risk-sharing financial instrument dedicated to the Bioecomy,
possibly taking the form of a thematic investment platform, that can meet the
funding needs of projects and mobilise private financing, subject to agreement
between the European Commission (EC) and other parties involved.
Explore together with EC services the set up of an EU-wide contact, information
exchange and knowledge sharing portal dedicated to Bioeconomy or combined with
a potential future Circular Economy portal.
1
2
3
4
Recommendations
Set-up of a Circular Bioeconomy Investment Platform

27. 27Innovation Finance Advisory | European Investment BankEuropean Investment Bank 27
Investment
fund
(layered fund
structure
possible)
Fund Manager
Investment strategy (being
agreed with EC)
Management fee
Performance fee
Co-financing
a portfolio of projects
(equity & quasi-equity, etc.)
Eligible
Projects
co-financed by
other sources (at
least 50%), which
would create
additional
leverage on EU
contribution
Sources of funding:
• EIB, with 100% EC
guarantee under
InnovFin
• Possibly Private
investors
• Possibly other public
investors (e.g. NPB)
Funding
Eligible projects will
be selected by the Fund
Manager, in accordance with
the Investment Strategy
Objective:
To provide access to finance to innovative bioeconomy projects, with a priority (but not exclusivity) for innovative circular
bioeconomy projects
Product:
(Venture) debt, quasi-equity and equity to address early- and late stage funding gaps (ticket size TBC)
Sectors:
Bioeconomy and circular bioeconomy (application of the concept of CE to biological resources, products and materials). Projects
focusing exclusively or mainly on renewable energy generation (fuels, heat or power) are not eligible.
Circular Bioeconomy Investment Platform (CBIP)
Indicative structure and key characteristics

28. 28Innovation Finance Advisory | European Investment BankEuropean Investment Bank 28
Circular Bioeconomy Investment Platform
• Type of investments: equity and quasi-equity, debt instruments
• Eligibility criteria (Investment Strategy)
• Projects pursuing activities in Bioeconomy;
• Support technologies, products, processes or business models that face enhanced risk due to technological
innovativeness, new markets of market disruption;
• Investments that at their start are entering TRL6 to TRL8;
• Priority to projects fulfilling one of the Circular Bioeconomy criteria;
• Typical EIB investment criteria and exclusions will apply.
• Target Region: EU Member States and Horizon 2020 Associated Countries
• Minimum portfolio development
• 4 Target Countries covered and 33% country concentration limit;
• Max single exposure: 20% of Fund Commitments in one single investment, maximum cap of 30% exposure
to one single group, single contractor and/or single operator