Risk-Sharing Finance Facility (RSFF)

The European Commission proposes to introduce a new financial instrument for the 7th Framework Programme for Research and Technological Development (FP7). Working together with the European Investment Bank (EIB), the Commission plans to establish a so-called "Risk-Sharing Finance Facility" (RSFF).

The aim of RSFF is to improve the financing of large research projects and RTD (research and technological development) infrastructures, by creating the option for firms to receive finance in the form of EIB loans. The facility will make use of the set of EIB’s financial instruments already in use within the framework of the "Structured Finance Facility" (SFF).

Financial resources from FP7 along with EIB’s own resources will serve to provision financial risk of EIB loans issued under the RSFF. According to current discussions, the amount of RP7 funds to be allocated for the RSFF will be of the order of 1 billion € for the period 2007-2013. This money will be used to make loans totalling 3 to 6 billion € available for RTD projects. Loans can be granted for projects that the Commission assesses as eligible for funding within FP7. Additionally, the RSFF is to be made available to other RTD projects with a
"European dimension".

It is against this background that the Federal Ministry of Education and Research (Bundesministerium für Bildung und Forschung - BMBF) has commissioned a short analysis from the Centre for European Economic Research (ZEW) to answer the following questions:

1. How does the potential economic utility of the planned RSFF rate, particularly compared with the promotion of RTD projects in FP7 through grants?
   
   
2. What is the potential of the planned RSFF in terms of making it easier for firms to gain access to the funds available under FP7?
   
   
3. To what extent can the RSFF cover SMEs’ financing needs for RTD projects and how is the planned involvement of private banks as loan agents for SMEs to be assessed?

This short expertise was presented on 30 September 2005:

English version

German version

German version

FP7 "Risk-Sharing Finance Facility" to leverage EIB loan investments in large European RTD projects and infrastructures (2nd draft - July 2005)

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