Risk Sharing Finance Facility Eib

Risk Sharing Finance Facility (RSFF) – EIB

The Risk Sharing Finance Facility (RSFF) was a pioneering initiative established by the European Investment Bank (EIB) in collaboration with the European Commission. Operating from 2007 to 2013, it aimed to enhance private sector investment in research, development, and innovation (RDI) activities across Europe. Its core function was to mitigate the higher risks associated with innovative projects, encouraging businesses and research institutions to undertake ambitious ventures that would otherwise be deemed too risky to pursue.

The RSFF operated by providing EIB loans and guarantees, effectively sharing the risk with financial intermediaries such as commercial banks and other lending institutions. This risk-sharing mechanism allowed these intermediaries to increase their lending capacity for RDI projects. By absorbing a portion of the potential losses, the RSFF incentivized them to finance ventures with higher levels of technological or commercial uncertainty. The projects supported by the RSFF ranged from developing new technologies and products to improving existing processes and services.

A key characteristic of the RSFF was its focus on additionality. The supported projects typically required financing that would not have been available on comparable terms without the RSFF’s intervention. This was achieved by targeting projects that: exhibited higher technological or market risks; required longer repayment periods; or were located in regions with underdeveloped financial markets for RDI. The RSFF therefore played a crucial role in unlocking investments in cutting-edge research and development activities that had the potential to generate significant economic and social benefits.

The facility targeted a diverse range of beneficiaries, including large corporations, small and medium-sized enterprises (SMEs), universities, and research organizations. Projects supported under the RSFF spanned various sectors, from biotechnology and pharmaceuticals to renewable energy and information technology. The geographic scope was primarily focused on EU member states, but also included associated countries.

The RSFF was widely considered a successful instrument for stimulating private sector investment in RDI. Evaluations have demonstrated its positive impact on economic growth, job creation, and technological advancement. Building on the success of the RSFF, subsequent initiatives, such as InnovFin and the European Fund for Strategic Investments (EFSI), have continued to support innovation finance in Europe. These later programs have adapted and expanded upon the risk-sharing model pioneered by the RSFF, demonstrating the enduring relevance and effectiveness of this approach to fostering innovation and competitiveness.