ECOFUNDING PROJECT. Polona Lah JSI EEC Portorož, Jozef Stefan Institute ENERGY EFFICIENCY CENTRE

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1 ECOFUNDING PROJECT Polona Lah JSI EEC Portorož,

2 The story goes Access to finance; a critical point to SMEs to maintain competitiveness 2013 SMEs Access to Finance survey Barriers and SMEs: 1. Market access, 2. financial sources, Situation in Slovenia: 22% SMEs : The main barrier is acces to finance > 50% SMEs: Looking for financial sources is difficult and stressful 2

3 The story goes Green sector ; a good opportunity to promote new projects (Europe 2020). A need for new communication channel between entrepreneurs and investors: banks, and risk capital funds still looking for new investment opportunities. EU studies: lack of information, training needed, qualitative analysis. 80% of the credit comes from the bank line. For the green sector the perspectives are quite different: risk capital and equity capital as main actors in the promotion of energy and eco innovation projects. 3

4 ECOFUNDING PROJECT - Programme MED (ERDF) - 11 partners from 7 countries - Duration: February 2012 March Project budget: ,56 EUR 4

5 ECOFUNDING PROJECT ECOFUNDING aims is to facilitate the access of Mediterranean SMEs to financing for the implementation of projects in the fields of the energy efficiency, renewable energy sources and green businesses. Setting of on line platform for innovative services of green funding: Provides financial instruments & services for investors operators and SMEs; Links investors and entrepreneurs; Provide financial tools for SMEs; Green Entrepreneurs Corner; ICT APP. 5

6 ECOLabs provide: Pilot Actions: ECOLabs implementation Implementing innovative services and giving services to SMEs Implementation of 9 ECOFUNDING LABS IN 7 countries (France, Spain, Italy, Croatia, Cyprus, Greece, Slovenia) Giving services to SMEs development of business and finacial plans Promotion of the match between entrepreneurs and investors Innovative ICT instruments: SELF-DIAGNOSIS, Service to Analyze the Rating (SAR), RSS 6

7 ECO LAB Slovenia (May March 2015) Services for SMEs (1) - Develepment of project ideas - Technical support - Elaboration of business plans - Linking SMEs to potential investors - SMEs training - Development of ITC tools (self diagnosis, financial tools) 7

8 ECO LAB aktivnosti in cilji Services for SMEs (2) - Organization of local B2B event (elevator pitching) - Participating to international B2B event - Organization of individual meetings between SMEs and venture capital representatives - Elaboration of financial plans 8

9 ECO LAB aktivnosti in cilji ECOFUNDING LAB Slovenia launched a call in August 2014: 14 applications, 9 selected ideas: 1) GREENER PROJECT, application for retrofitting of buildings in households 2) ENERGY+, the development of a central control system (CNS) and the development of modular solar panels 3) EKO PRODUKT, Eco business center 4) SEMENIČ TRANSPORT, Processing engines for commercial vehicles BIO diesel and gas 9

10 ECO LAB aktivnosti in cilji 6) SEMENIČ TRANSPORT, Manufacture of trailers for lorries, which are lighter than the classic 1.5 tons 7) BEEM SYSTEM, The application for the implementation of simple energy audits in SMEs 8) ALESECO, The system of sanitary flushing 9) The device for energy use of waves 10

11 ECO LAB aktivnosti in cilji - Elaboration of 9 business plans (from October 2014 to December 2014) - Organization of B2B event - 9. december

12 ECO LAB Training How to pitch - Organizacija Seminarja: How to pitch

13 Presentation of investors Presentations of 9 business ideas -(5 min) 13

14 Round table with investors -Round table with investors 14

15 10 Proposals to improve Green Financing in the EU Francisco Estevan, Council Chambers Valencia Region Polona Lah, JSI EEC 15

16 Real Experience: 1 year working with green projects, funds and services (i) (We have analyzed the available funds) Many more public funds than private (Piraeus Bank, Triodos Bank, Unicredit, BPI France) = green growth is highly funded by the EU and its regions. Public Funding is complex: targeted at investments framed in specific programmes, with an average co-financing rate of 60% and restricted conditions. Private Funding is scarcer but more agile: addressed at the needs of companies and able to reach projects faster. Having produced such simplification, the theorem should focus on how to operate these two worlds more effectively. 16

17 Real Experience: 1 year working with green projects, funds and services (ii) (We have talked to the managers of Public Funds) To implement public funds, private financing is needed: advances, liquidity. In order for businesses to access public funds, public procedures should be simplified. To accomplish the execution of European policies, new channels to inform and communicate European policies should be found. In order for SMEs and entrepreneurs to submit real, feasible and sustainable proposals, the mechanisms that help SMEs develop their Business Plans should be reinforced. 17

18 Real Experience: 1 year working with green projects, funds and services (iii) (We have talked to Private Investors) They are looking for mature projects, feasible ideas supported by a good Financial Plan. They are looking for ideas promoted by teams, not by entrepreneurs on their own: sustainability of the Business Plan. Public financial instruments remain unattractive for SMEs: the restraints of financial instruments = less bureaucracy and more effectiveness is needed. 18

19 Real Experience: 1 year working with green projects, funds and services (iv) (We have talked to more than 200 SMEs, entrepreneurs and start-ups) ECO- INNOV ATION 43% Entrepreneurship move forward the opportunities of the ECO- INNOVATION ENERGY 57% 19

20 Real Experience: 1 year working with green projects, funds and services (v) (We have talked to more than 200 SMEs, entrepreneurs and start-ups) AGRICULTURE 7% BUILDING 4% FOOD & IND. 9% INDUSTRY 13% ICT 13% ICT, RES and TRANSPORT : Big opportunities for growth. RES 22% TRANSPORT 22% 20

21 Real Experience: 1 year working with green projects, funds and services (vi) 70% of ECOFUNDING clients have requested funding for investments: there are ideas and development. 73% of ECOFUNDING clients have obtained funding for the implementation of their projects: the system starts functioning again after the crisis. The requirement of guarantees and warranties (42%) and the high interest rates (23%) are considered the main obstacles to access financing. 89% of ECOFUNDING clients have requested "local/ regional funding" and only 11% have requested European funding. 21

22 10 Proposals, 10 Challenges at EUROPEAN LEVEL 22

23 Grants: 90,000 Million Euros for green growth (i) There are many grants, but dispersed, little known, great competition, barriers to entry. Difficulties to launch project: advances. SMEs understood better the 7FP than Horizon Many complain about not being reimbursed for the projects already implemented: time delay that puts projects at risk. 23

24 Grants: 22,000 Million Euros for green growth (ii) Proposal 1: Implementation of an Advance System to solve liquidity problems: EUROPE CREDIT (EIB + National Banks + Private Banking). Proposal 2: A Single Information Window, more simplification and transparency: All Green Funds Corner! 24

25 Financial Instruments: more transparency and accessibility (i) Higher operating and accessing conditions, greater transparency at the starting point. Better financial conditions once the Financial Instruments are signed. It is necessary to classify Financial Instruments according to certain aspects: revolving, with part of the grant coming from Structural Funds, etc. Proposal 3: Training for support organizations (Chambers of Commerce, EEN Network) and financial institutions to improve their functioning. 25

26 Financial Instruments: more transparency and accessibility (ii) Proposal 4: Create Financial Instruments that enhance business cooperation and team building at European level for the generation of "second level" ideas. Proposal 5: Best financial conditions for financed Financial Instruments: interest rates, repayment terms, guarantee and warranty requirements. Proposal 6: Database that according to the needs of each project identifies all available financial instruments. 26

27 Entrepreneurship: a big engine for growth in the EU (i) Looking for financing is at the cutting edge, but investors need companies whose Business Plans measure sales and customers. Beyond the financing, it is necessary to strengthen the networking and cooperation: we must not entrepreneur alone, but instead incorporate the necessary professionals to the team. 27

28 Entrepreneurship: a big engine for growth in the EU (ii) Proposal 7: Create a space where to find easily the necessary resources to start a project. As a social network, much more flexible than the institutional systems of the EEN Network, without filters or approved profiles by stakeholders: that allows direct contact to promote team building. 28

29 R&D/ innovation (i) Not all territories can do R&D: it is neither profitable nor possible in the global world where we live. Smart Specialization Strategies RIS3 have been designed: it is necessary to know the Expertise Map in Europe, simplify it and make it one click reachable. The Euro system should solve on line in 5 seconds the following question: where are the best ICT solutions to control energy consumption in buildings? 29

30 R&D/ innovation (ii) Proposal 8: Create a Database of Queries about patents, trademarks, solutions, ongoing research, actors, marketability, etc. Technology transfer with a clear orientation towards innovation! 30

31 The projects: improvements and Financing Plans (i) More developed projects are needed, more mature and with a complete Business Plan. Companies and entrepreneurs should be trained for the development of Business Plans and Financing Plans. Match between ideas and teams. Second opportunity. 31

32 The projects: improvements and Financing Plans (ii) Proposal 9: Definition of Previous Validation Systems through the support networks (EEN- Stakeholders). Online identification of all support mechanisms for the design of projects. 32

33 ICT, Information Systems and Open Data (i) Too many information systems, none of them perfect: we should bet on a single information window at EU level (policies and financial solutions not aligned). It is necessary to make a more intensive use of ICT for companies and entrepreneurs to work better in the virtual environment: reactive information vs. proactive information. There are not enough data to evaluate the existing financial policies to support the green sector. There is only data available on subsidies, not about the public funds that are managed through private operators. 33

34 ICT, Information Systems and Open Data (ii) Proposal 10: Increase the use of ICT in the information systems and require private operators to work with the EIB and the European Commission to publish the results of the implementation of funds. 34

35 Thank you for your attention Polona Lah,, EEC Francisco Estevan, Council Chambers Valencia Region 35