private climate finance delivery mechanisms for smes state...

GreenEcoNet TW6: ‘’Finance opportunities for green SMEs”

Private climate finance delivery mechanisms for SMEs

state of the artValentino MARINI GOVIGLI and Corrado TOPI

Research Associate and Senior Research FellowStockholm Environment Institute – University of York centre

[email protected] and [email protected]

This project has received funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under grant agreement no 603939

mailto:[email protected]

mailto:[email protected]


Outline1. Introduction: What is the current status of private climate finance?

A review of the current finance environment

2. Specific cases studies• InnovFin, EIB - EIF• The SME instrument, EC• Brief overview of national and local instruments

3. Conclusion and way forward

Climate finance

SME ad hoc instruments

SMEs Climate finance


What is the current status of private climate finance?

Post COP21 Agenda

• Climate stakeholders (States, Businesses & cities) need to foster climate resilient solution

• BUT only a small percentage of those have the knowhow and the resources to implement an effective low carbon growth paradigm

• Climate change foresees severe global threats (Inaction), but as well as potential new business opportunities

?

© ICLEI

KEY role of PRIVATE climate finance


• At 2014 the current investment on climate finance was $391 billions ($243 billions private funds) ©CPIMainly destined to mitigation activities

• Lack of data reliability

We scrutinized more than 100 private finance actions worldwide as to understand the most used

instrument and the directionality of the finance fluxes



• SME• Midcaps• Large caps• Promoters/advisory

SME requirements:

1. Lowered investment barriers2. Accessible & clear funding

schemes3. Financial schemes open

towards innovative business (including: complex technologies/products, unproven markets intangible assets)

4. …



Instrument #1 InnovFin: green SME as innovative business• EIB instrument launched under the Horizon2020

• Foreseen expenditure: € 24 billion (up to 48)

• SME-dedicated instruments:

Guarantee facility or Venture capital

• Valid for EU ember states and Horizon associated

countries

• “Support innovators of all sizes” (not strictly green)

• Online application process & direct costumer center:

https://clientconnect.eib.org/1

http://www.eib.org/products/blending/innovfin/index.htm


Instrument #1 InnovFin: EXAMPLE• Sector: Wind turbine - Solutions for special lifting and transportation tasks

• Business size: Danish SME (55 employees)

• Applied for an InnovFin dedicated instrument to SME

• 1 million € raised to start a new servicethrough the dedicated InnovFin fund


Instrument #1 InnovFin: EvaluationL = LowM= MediumH = High

LMH

L

M

H

L M HL

M

H

Loan entity

Green focus

Clarity of the loan application process

Directed to SMEs


Instrument #2 The SME instrument

• Dedicated SME instrument, established under horizon2020

• € 3 Billion for period (2014-2020)

• Aim: develop SMEs innovative ideas for products, services,

business

• SME-dedicated instruments:

Business innovation grants, business coaching,

additional services

• Unclear application process/ good FAQ interface:

http://ec.europa.eu/easme/en/horizons-2020-sme-instrument

https://ec.europa.eu/programmes/horizon2020/en/h2020-section/sme-instrument/


Instrument #2 The SME instrument: summary

…

https://ec.europa.eu/easme/en/news/142-highly-innovative-smes-funded-horizon-2020-sme-instrument


Instrument #2 The SME instrument: Flexbimec• Italian SME focused on Industrial installations

• Applied for a SME support in order to develop a new line of fluids metering equipment (project REFEREE)

• Submitted the project succesfully to phase 1obtained funds to perform a feasibility study


Instrument #2 The SME instrument: EvaluationL = LowM= MediumH = High

LMH

L

M

H

L M HL

M

H

Loan entity

Green focus


Directed to SMEs


Instrument #3: national Governments, local banks

Regional, National Governments

Local, national banks

• Very broad and complex number of instruments and services available


Instrument #3: national Governments, local banksL = LowM= MediumH = High

LMH

L

M

H

L M HL

M

H

Loan entity

Green focus


Directed to SMEs


Conclusions & way forward• The financial environment dedicated to SMEs is quite broad• Funding sources for SMEs differ in terms of:

- type of instrument- type of investor- targeted SME

Need of reliable evaluation methods apt to assess the instrument goodness as well as the final targets in term of green economy (efficacy,

effectiveness and completion of the delivery)

Detecting available and necessary information become complicate and time consuming

Key role of SMEs facilitator agencies


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private climate finance delivery mechanisms for smes state...

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