The EU-funded deal will allow the bank to more securely enter into loan agreements with companies of below 500 employees, as any potential losses on loans for innovative activities will be guaranteed by 50% by the EU under the loan guarantee scheme. Overall, the scheme is to generate a portfolio of €50 million in loans to innovative companies over the next two years.

Carlos Moedas, European Commissioner for Research, Science and Innovation, said: "I am pleased to announce that Ukrainian companies can now benefit from EU-guaranteed loans up to €50 million to boost their research and innovation potential. The deal signed today (13 September 2016) will support Ukraine's economy, and it is a testimony to the productive relationship between the EU and Ukraine under Horizon 2020, the EU's research funding programme."

This deal falls under the InnovFin SME Guarantee Facility, which is part of the new generation of financial instruments supported under Horizon 2020 (IP/14/670). Under this facility, financial intermediaries are guaranteed against a proportion of any losses incurred on the debt financing covered under the facility.

Background

InnovFin SME Guarantee Facility is part of "InnovFin – EU Finance for Innovators", the new generation of EU financial instruments and advisory services that was developed under Horizon 2020 to help innovative firms access finance more easily. It will help inject up to €48 billion in investments in Research and Innovation across Europe.

InnovFin SME Guarantee Facility provides guarantees and counter-guarantees on debt financing of between €25,000 and €7.5 million, in order to improve access to loan finance for innovative small and medium-sized enterprises and small midcaps (up to 499 employees). The facility is managed by the EIF, and is rolled out through financial intermediaries – banks and other financial institutions – in EU Member States and Associated Countries.

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 €77 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. Researchers, businesses and innovators from Ukraine can fully participate in Horizon 2020 on equal terms with EU Member States and other associated countries thanks to the Agreement for the Association of Ukraine to Horizon 2020 (IP/15/4640)

Source: DG Research and Innovation