European Commission and EIB set up a Circular Economy Fund

Aurel Constantin 03/12/2019 | 08:54

The European Commission and the European Investment Bank (EIB) have announced the completion of the public procurement process for the selection of an investment advisor to set up and manage the European Circular Bioeconomy Fund (ECBF). The selected investment advisor is ECBF Management GmbH and Hauck & Aufhauser Fund Services will act as the Alternative Investment Fund Manager.

The new fund will provide access to finance – in the form of equity, debt or quasi-equity – to innovative circular bioeconomy companies and projects of various sizes. ECBF Management will raise funds from public and private investors with a target fund volume of EUR 250 million and aims for a first close in Q1 2020. A proposal for the EIB to invest up to EUR 100 million in the fund will be submitted to the EIB’s Board of Directors for approval. This investment will be backed by a guarantee from InnovFin – EU finance for Innovators, an initiative of the EIB Group and the European Commission to facilitate access to finance for innovation and research through a wide range of financing tools and advisory services.

“Sustainable bioeconomy has the potential to play a major role for the European Green Deal. It will help us reach our environmental, climate and biodiversity targets in line with the UN Sustainable Development Goals. The European Circular Bioeconomy Fund will fill the funding gaps, attracting private investments that bring bio-based innovations closer to the market,” said Carlos Moedas, Commissioner for Research, Science and Innovation.

“Using renewable biological resources to produce our goods and energy is essential to transition to a circular economy and reduce our reliance on fossil fuels. With the launch of the European Circular Bioeconomy Fund, we have reached an important milestone to ensure that groundbreaking projects in the sector get the financing they need,” said Andrew McDowell, EIB Vice-President responsible for agriculture and bioeconomy.

The creation of such a fund was recommended by the 2017 Innovfin Advisory study Access-to-finance conditions for Investments in Bio-Based Industries and the Blue Economy which identified an important financing gap in the bioeconomy sector.

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investments in order to contribute towards EU policy goals. During the last five years (2014-2018), the EIB has provided EUR 32.8 billion of co-financing to the agriculture/bioeconomy sector.

InnovFin – EU Finance for Innovators was launched, by the European Investment Bank Group (EIB and EIF) in cooperation with the European Commission under the EU Research and Innovation Framework Programme Horizon 2020. It aims to facilitate access to finance for innovation and research through a wide range of financing tools and advisory services, and secure Europe’s global competitiveness.

In a transforming economy, the European Circular Bioeconomy Fund (ECBF) invests and partners with ambitious and visionary entrepreneurs to accelerate late stage companies. ECBF relies on expertise and powerful networks to catalyze sustainable innovations and fuel business growth. We aim to fill a funding gap in the European (bio-)economy, bringing Europe’s excellent expertise in circular technologies to market. ECBF will be established in Luxembourg, advised by an experienced venture capital team within ECBF Management GmbH and managed by Hauck & Aufhauser Funds Services S.A. (AIFM). Being a market standard growth stage venture capital fund, ECBF has the additional ability to focus on project financing as well as typical venture capital investment structures.

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