BIOREFINERY GLAS D3.2 Guide on Financing Options for Farmer Uptake of Small-Scale Biorefinery Technology
BIOREFINERY GLAS IS A EUROPEAN INNOVATION PARTNERSHIP (EIP) FUNDED BY THE DEPARTMENT OF AGRICULTURE, FOOD, AND THE MARINE (DAFM) UNDER THE RURAL DEVELOPMENT PROGRAMME 2014-2020
Deliverable 3.2 Guide on Financing Options for Farmer Uptake of Small-Scale Biorefinery Technology
Project title: Biorefinery Glas Contract Nº: LLOC2043 Start date: 01/02/2019 Duration: 24 months
Deliverable number D3.2 Deliverable title Guide on Financing Options for Farmer Uptake of Small-Scale Biorefinery Technology Submission due date M21 – October 2020 Actual submission date 31/10/2020 Work Package WP3 WP Lead Beneficiary ITT Dissemination Level Public Version 01 Authors Ozan Nadirgil (Institute of Technology, Tralee)
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Author(s) James Gaffey (ITT)
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Executive Summary
The Biorefinery Glas project presents an opportunity for farmers in the bioeconomy, both as suppliers, but also in a more central role as pre-processors and producers, potentially increasing their share of value in the bioeconomy value chain. The small scale biorefinery which has been demonstrated in the Biorefinery Glas project, is designed as a user- friendly, automated and mobile facility with low capital expenditure and operational cost requirements providing a feasible opportunity for famers to become more central players in the bioeconomy, while addressing key national and regional challenges. The purpose of this deliverable is to provide farmers and other stakeholders with supporting information on financing opportunities to enable further development and uptake of small-scale biorefineries. Through this scoping exercise many financing tools have been identified which may support farmers or other primary stakeholders to progress or commercialize sustainable ventures. Within this document we discuss these instruments and provide examples of relevant projects which have already been funded through the different programmes and investment schemes. This report provides an overview of public funding available at EU and National/Regional level, as well as co-financing and private funding opportunities. The EU Funds section covers the recurring EU programmes, including Horizon Europe, Green Deal, LIFE Programme, EAFRD, EIP-Agri, BBI JU and European Investment Bank funds. Horizon Europe is a €100 billion research and innovation programme that will succeed Horizon 2020 and will cover the period 2021-2027. It is designed with an investment mind-set rather than as a ‘funding’ instrument and built to help support the EU transition to a sustainable and prosperous future. Within the new Horizon Programme, all financial instruments will be implemented under a single Invest EU Fund with two new windows; Research & Innovation and SME. The European Green Deal Investment Plan aims to mobilise EU funding and create an enabling framework to facilitate and stimulate the public and private investments needed for the transition to a climate-neutral, green, competitive and inclusive economy by mobilising at least €1 trillion of sustainable investments over the next decade. The new LIFE programme for 2021-2027 is established by The European Commission regulation proposed in 2018, with a budget of €5.45 billion containing two main portfolios, Environment and Climate Action, and covering four sub-programmes. Supporting the transition to a circular economy, LIFE funding targets projects related to best technologies, practices and solutions developed at local, regional or national level and the programme is open for public bodies as well as private commercial and noncommercial organizations. The European Agricultural Fund for Rural Development (EAFRD) is the funding instrument of the CAP, which supports rural development strategies and projects. It also forms part of the European structural investment funds (ESIF). EIP-AGRI is one of the five European Innovation Partnerships that were launched to boost the EU’s capacity to innovate. EIP-AGRI focuses on forming partnership within the agricultural and forestry sectors, using bottom-up approaches and linking actors in different types of interactive innovation projects such as the operational groups under national/regional rural development programmes (RDPs) and multi-actor projects under
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Horizon 2020. It provides funding for EIP-AGRI innovation projects which look at tackling specific practical issues and opportunities according to the needs of the agricultural and forestry sector. The Bio-based Industries Joint Undertaking (BBI JU) is a €3.7 billion Public-Private Partnership between the European Union and the Bio-based Industries Consortium (BIC) focused on scaling up Europe’s bioeconomy with a focus on feedstocks, biorefineries, markets, products and policies. The two founding partners, the EU Commission and the Biobased Industries Consortium contribute €975 million in public funding (provided by the Horizon 2020 programme) and €2.7 billion in private funding by BIC partners and private industry. By 2024, each euro of BBI JU funding is expected to have attracted a private contribution of €2.8. BIC recently launched a review into participation of the agricultural primary production sector within its funded project, with proposals for better integration of farmers and their representatives. EIB provides funds in the form of loan, guarantee schemes and equity to support private companies operating throughout the value chains of production and processing of food, bio-based materials and bioenergy. It will be guaranteed by the EU budget under the European Fund for Strategic Investments (EFSI), which forms the financial pillar of the “Investment Plan for Europe”. EIB recently announced the launch of a new financing initiative that aims to unlock close to €1.6 billion of investment in the agriculture and bioeconomy sector. The lending programme enables direct lending for private sector investments ranging from €15 million to €200 million, with the EIB loan amount ranging from €7.5 million to €50 million. Another FI of EIB, InnovFin Equity programme supports micro, small or medium-sized enterprises (SMEs) and social enterprises which play a crucial role in promoting innovation and the creation of growth and employment, but which face difficulties in accessing finance. Small and medium sized enterprises, midcap cooperatives and larger private sector enterprises active in the bioeconomy across the EU can also benefit from the Agriculture and Bioeconomy Programme Loan. Besides the EU bioeconomy funds, there are also plenty of national, regional and joint programmes and organizations available for farmers to finance the small-scale bioeconomy opportunities, comprising Project Ireland, LEADER Programme, Enterprise Ireland, The Strategic Banking Corporation of Ireland and Halo Business Angel Network (HBAN). Project Ireland 2040 supports business and communities across all of Ireland in their transition to a low carbon economy with a €500 million Climate Action Fund dedicated to support initiatives that contribute to the achievement of Ireland's climate and energy targets and a €500 million Disruptive Technologies Fund for investments in the development and deployment of disruptive innovative technologies and applications, on a commercial basis, targeted at tackling national and global challenges. LEADER is a joint programme providing support for private enterprises and community groups who improve the quality of life and economic activity in rural areas by funding projects through Local Action Groups (LAGs). The total funding available under the LEADER 2014-2020 Programme is €250 million.
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Enterprise Ireland provides funding and support for companies from entrepreneurs with business propositions for a high potential start-up through to large companies expanding their activities, improving efficiency and growing international sales. The Strategic Banking Corporation of Ireland offers low-cost credit available to Irish SMEs provided through on-lending partners who, in turn, lend directly to SMEs. Meanwhile, HBAN as a joint initiative of Enterprise Ireland, Inter Trade Ireland and Invest Northern Ireland, managed by Dublin BIC, has been helping start-ups access funding for growth since 2007. In 2019, HBAN business angels across Ireland invested €16.8m into 66 companies and leveraged a further €36m from public and private funds through organizations such as Enterprise Ireland and Venture Capital funds, bringing the total funding in these deals to €52m. In addition to EU and national level funds, private funding mechanisms stand as a good alternative source of funds by ensuring additional benefits and public attention into the projects that online crowdfunding platforms enable the entrepreneurs to create and manage their own campaigns for their innovative projects and raise funds in forms of donations, grants, equity or loan. Private funding mechanisms have also the potential to adjust the shortcomings of the public funding by providing additional funds compared to public channels combined with faster fundraising processes and shorter approval periods. New investments with an immediate opportunity for growth can attract venture capital to share the risks and returns. In many circumstances, the venture capital can be more expensive than bank debt, however, the value that can be created through that partnership far outweighs a low interest rate. Going forward, crowdfunding has the potential to play an important role in the agriculture and bioeconomy sectors for several reasons including; giving smaller investors the opportunity to participate in promising agriculture ventures of different sizes and in different parts of the world, and filling the large space between debt financing and equity investment. There are now several online crowdfunding platforms with an agriculture sector focus that provide an opportunity for entrepreneurs to raise hundreds of thousands or millions of dollars from anyone with money to invest in.
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Table of Contents Executive Summary ...... 3 List of Tables ...... 7 List of Figures ...... 7 Acronyms and Abbreviations ...... 8 Introduction ...... 9 1. EUROPEAN UNION FUNDS ...... 10 1.1. Horizon Europe ...... 10 1.1.1. Pillars of Horizon Europe: ...... 10 1.1.2. Horizon Europe: Financing ...... 11 1.1.3. Relevant Projects: ...... 12 1.2. European Investment Bank ...... 13 1.2.1. Innovfin Instrument ...... 14 1.2.2. InnovFin Equity ...... 14 1.2.3. Agriculture and Bioeconomy Programme Loan: ...... 16 1.2.4. European Circular Bioeconomy Fund (ECBF) ...... 16 1.2.5. Relevant Projects: ...... 17 1.3. European Green Deal ...... 19 Green Partnerships ...... 19 Action Plans ...... 19 1.4. LIFE Programme ...... 20 1.4.1. LIFE - Environment Sub-Programme ...... 20 1.4.2. LIFE - Climate Action Sub-Programme ...... 21 1.4.3. New LIFE Programme ...... 21 1.4.4. Relevant Projects ...... 22 1.5. European Agricultural Fund for Rural Development ...... 22 1.6. European Innovation Partnerships Agriculture (EIP-Agri) ...... 23 1.6.1. Relevant Projects ...... 24 1.7. Biobased Industries Joint Undertaking ...... 24 1.7.1. Focus ...... 25 1.7.2. Tackling Europe's Major Challenges ...... 25 1.7.3. Objectives ...... 25 1.7.4. Relevant Projects ...... 26 1.8. List of The Financial Intermediaries of The EU and EIB Funds ...... 27 2. NATIONAL AND REGIONAL FUNDS ...... 31
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2.1. Project Ireland 2040 ...... 31 2.1.1. Climate Action Fund ...... 32 2.1.2. Rural Regeneration and Development Fund ...... 32 2.1.3. Disruptive Technologies Innovation Fund...... 33 2.1.4. Relevant Projects ...... 34 2.2. LEADER Programme Funding ...... 34 2.2.1. Relevant Projects ...... 35 2.3. Enterprise Ireland ...... 35 2.4. The Strategic Banking Corporation of Ireland ...... 36 2.5. Halo Business Angel Network (HBAN) ...... 37 3. PRIVATE FUNDING ...... 38 3.1. Venture Capital ...... 38 3.2. Angel/Seed Investing ...... 39 3.3. Crowdfunding ...... 39 3.3.1. Relevant Projects ...... 41 4. CONCLUSION ...... 42 REFERENCES ...... 43
List of Tables TABLE 1 HORIZON 2020 RELEVANT PROJECTS ...... 13 TABLE 2 AGRICULTURE AND BIOECONOMY PROGRAMME DETAILS ...... 16 TABLE 3 EIB RELEVANT PROJECTS ...... 18 TABLE 4 LIFE PROGRAMME RELEVANT PROJECTS ...... 22 TABLE 5 RELEVANT EIP-AGRI PROJECTS...... 24 TABLE 6 BIJ RELEVANT PROJECTS ...... 27 TABLE 7 LIST OF FINANCIAL INTERMEDIARIES ...... 31 TABLE 8 PROJECT IRELAND RELEVANT PROJECTS ...... 34 TABLE 9 LEADER PROGRAMME RELEVANT PROJECTS ...... 35 TABLE 10 CROWDFUNDING RELEVANT PROJECTS ...... 41
List Of Figures FIGURE 1 PILLARS OF THE HORIZON EUROPE ...... 11 FIGURE 2 INNOVFIN PRODUCTS OF EIB ...... 15 FIGURE 3 EUROPEAN VENTURE CAPITAL...... 39
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Acronyms and Abbreviations
D 3.2. Deliverable 3.2. DAFM Department of Agriculture, Food and the Marine ITT Ins tute of Technology Tralee UCD University College Dublin CAR Carbery EU European Union BBI JU Biobased Industries Joint Undertaking EIP European Innova on Partnerships SME Small and Medium Size Enterprises KBBE Knowledge-based Bioeconomy ERC European Research Council EIT European Ins tute of Innova on and Technology MFF Mul annual Financial Framework GHG Green House Gas EIB European Investment Bank EFSI European Fund for Strategic Investments ESIF European Structural and Investment Funds FIs Financial Instruments ECBF European Circular Bioeconomy Fund IRR Internal Rate of Return NGO Non-Governmental Organiza on CAP The Common Agricultural Policy EAFRD The European Agricultural Fund for Rural Development EIP - Agri European Innova on Partnerships Agriculture BIC Bio-based Industries Consor um HPSU High Poten al Start-up SBCI The Strategic Banking Corpora on of Ireland
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EIF European Investment Fund HBAN Halo Business Angel Network VC Venture capital ROI Return on Investment
Introduction
Over the last decade, the European Bioeconomy has expanded to become one of Europe’s leading opportunities to ensure sustainable growth and develop a low-carbon economy. The Bioeconomy can help to utilize natural resources more efficiently to help dealing with the many challenges we face as a population. These include; ensuring that there is sustainable protein and food for a growing population, ensuring that there are sustainable alternative products and energy to replace those dependent on fossil materials, to decarbonize the economy using sustainable practices, to create local jobs and continue to ensure the competitiveness of our primary production sectors. The updated EU Bioeconomy Strategy 2018 points to the opportunity for “increased benefits” for primary producers within the bioeconomy, however, also points to the need for more proportionate sharing of the benefits of the bioeconomy among primary producers. Recently, this need to effectively integrate farmers within bioeconomy value chains has gained attention. The Biobased Industries Joint Undertaking (BBI JU), the EU’s Public- Private Partnership aimed at accelerating the growth of Europe’s bioeconomy, recently completed a study on the participation of the agri-sector with this bioeconomy programme. The report found that within all BBI JU projects to date, primary producers make up only 3% of beneficiaries. Within these projects, agricultural producers were rarely in the driving seat in BBI JU projects since they were in general assessed to have limited influence on the work and on decisions taken. Among several recommendations to improve farmer/agri-sector participation include; a focus on small projects where farmers play a more central role, a great inclusion of farming organization both within call topic development and consortia development, a greater focus on bioeconomy initiatives which resolves challenges for farmers, and integrating a bottom-up approach in relation to some BBI JU topics. There are different mechanisms to improve integration of primary producers within the bioeconomy. These can include approaches that focus on the business model, the collaboration model and the technology. The EU Bioeconomy Strategy notes the role that small-scale biorefinery technologies can play as an enabling technology for primary producers in the bioeconomy, allow producers to turn organic waste, residues and food discards into valuable and safe bio- based products, and in doing so diversifying their revenue sources and better managing market risks, all while achieving the goals of the Circular Economy. The Biorefinery Glas project, funded through the EIP-Agri initiative, has shown how small-scale biorefinery approaches can empower farmers within the bioeconomy, allowing them to go beyond the role of biomass supplier and into producers of finished or semi-finished biobased products. In order to ensure a proliferation of similar primary producer-centered bioeconomy projects, it is important that primary producers, their representative organizations and supporting partners (SME’s, academia, policy makers etc.) are aware of the various supporting public and private funding mechanisms which are available to
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provide R&D and commercialization support to enable project development and technology uptake. This deliverable aims to provide information about the available public and private bioeconomy funds to support farmers in acquiring biorefineries and commodifying new biobased products.
1. EUROPEAN UNION FUNDS
1.1. Horizon Europe Horizon Europe is €100 billion research and innovation programme that will succeed Horizon 2020 (the current Framework Programme). The new programme will cover the period of 2021-2027 and is significantly higher in funding compared with the previous Horizon 2020 program (previously €77 billion). Horizon Europe is designed with an investment mind-set rather than as a ‘funding’ instrument; and built to help the EU make the transition to a sustainable and prosperous future.
1.1.1. Pillars of Horizon Europe:
The Excellent Science pillar supports frontier research projects designed and driven by researchers through the European Research Council (ERC). It also funds fellowships and a mobility of researchers through Marie Skłodowska-Curie Actions, and invests in world-class research infrastructure. The Global Challenges and European Industrial Competiveness pillar supports research into societal challenges, reinforces technological and industrial capacities, and sets EU-wide missions with ambitious goals tackling some of the biggest problems (health, climate change, clean energy, mobility, security, digital, materials, etc.). It will also support partnerships with Member States, industry and other stakeholders to work jointly on research and innovation. It includes action by the Joint Research Centre that supports EU and national policymakers with independent scientific evidence and technical support. The Innovative Europe pillar aims to make Europe a frontrunner in market-creating innovation and SME growth through the European Innovation Council. It will help to develop the overall European innovation landscape. The European Institute of Innovation and Technology (EIT) will continue to foster the integration of business, research, higher education and entrepreneurship. A fourth component on widening participation and strengthening the European research area underpins the whole of Horizon Europe. It will support EU Member States in their efforts to unlock their national research and innovation potential and it will especially help low R&I performing Member States to participate better in Horizon Europe.
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Figure 1 Pillars of The Horizon Europe
Source: Horizon Europe Fact Sheet, EU Commission
One of the key features of Horizon Europe is the mission-driven approach that is linked to key societal challenges and relevant to a broad range of stakeholders as well as to citizens. The five mission areas of the programme are: Cancer Adaptation to climate change including societal transformation Healthy oceans, seas coastal and inland waters Climate-neutral and smart cities Soil health and food
1.1.2. Horizon Europe: Financing
Under the next Multiannual Financial Framework (MFF 2021-27) all EU access to financial instruments will be implemented under a single Invest EU Fund. The Directorate General (DG) Research & Innovation is involved in two windows of InvestEU: R&I Window SME Window. The R&I window aims to make financing for innovation available across the innovation cycle and corporate development cycle. The challenge will be to develop a window that is both inclusive and at the same time fully in line with specific missions/global challenges of the next FP. For the SME window, DG Research & Innovation is in charge of the equity sub-window. The only exceptions are the European Innovation Council’s specific financial instruments, which will be funding extremely promising but high-risk projects that cannot meet the ‘bankability’ criteria of InvestEU. In close synergy with InvestEU, the EIC
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Accelerator, in its blended finance and equity financial support forms, will finance projects run by SMEs, including start-ups. In exceptional cases, small mid-caps will also be financed, if they are not yet able to generate revenues or able to attract sufficient investments to fully implement their projects. Such eligible entities will be considered as non-bankable. Once they will become bankable, those projects may, in a later stage of their development, be financed under InvestEU.
1.1.3. Relevant Projects:
H2020, the precursor programme to Horizon Europe, has already funded a range of bioeconomy projects aimed at creating new revenue streams for farmers using primary, secondary and tertiary biomass. OPTIMA: In a time of climate change, when fuel resources are under pressure and lands face potential erosion risks, humble grass seems an unlikely savior. The European research project OPTIMA is helping cultivate high-yielding perennial grasses that could address these possible challenges, offering a number of valuable environmental and economic benefits. https://cordis.europa.eu/project/id/773718
BIOBOARD: Development of sustainable protein-based paper and paperboard coating systems to increase the recyclability of food and beverage packaging materials https://cordis.europa.eu/project/id/315313
MIRACLES: What could be the next new super crop? How about microalgae? An EU-funded project is developing technology to grow and use these single-celled plants. Already used in health-food supplements, the crop has potential to green existing industries and develop new ones.
https://cordis.europa.eu/project/id/613588
As a third of the fruit and vegetables Europe consumes are grown in greenhouses, protected horticulture represents a sizeable and growing proportion of the industry. EUPHOROS project helped cut farmers’ energy requirements by half and provided innovative solutions for reducing water, nutrients and pesticides use and implementing low-energy climate controls.
https://cordis.europa.eu/project/id/211457
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The overall aim of the REFRESH project is to contribute significantly towards the objective of reducing food waste across the EU by 30% by 2025 (which amounts to between 25 to 40 million tons of food not being wasted in 2025, worth tens of billions of Euros a year) and maximizing the value from unavoidable food waste and packaging materials. https://cordis.europa.eu/project/id/641933
Lactips is an innovative company located in France, founded in 2014. Lactips develops a disruptive thermoplastic material, water-soluble at room temperature and below, for uses in water-soluble or edible packaging. This material is unique on a worldwide scale. The ECOLACTIFILM is Lactips’ project to remove every barrier and properly address the market. Properties will be improvedl to resist to liquids, acid and alkaline powders and to be shrinkable. At the project end, every chemical that are to address water trouble could be packaged in a sound and clean, harmless way. https://cordis.europa.eu/project/id/766603
Table 1 Horizon 2020 Relevant Projects
1.2. European Investment Bank
The European Investment Bank (EIB), the EU bank, announced the launch of a new financing initiative that aims to unlock close to €1.6 billion of investment in the agriculture and bioeconomy sector. The financing aims to support private companies operating throughout the value chains of production and processing of food, bio-based materials and bioenergy. It will be guaranteed by the EU budget under the European Fund for Strategic Investments (EFSI), which forms the financial pillar of the “Investment Plan for Europe”. The lending programme will enable direct lending for private sector investments ranging from €15 million to €200 million, with the EIB loan amount ranging from €7.5 million to €50 million. Targeted investments will support environmental protection and natural resource efficiency, renewable energy, innovation, competitiveness, and energy efficiency. The programme will contribute to safeguard and create employment in rural areas and therefore promote rural development and territorial integration across the EU. The programme is a continuation of the first €400 million agriculture and bioeconomy programme loan that was launched in 2018 and is nearly fully committed. The first programme loan generated significant interest in the market with a number of projects originated with corporate and cooperative counterparties in several EU countries (e.g. France, Poland, Ireland, Italy and Latvia).
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Financial Instruments (FIs) transform EU resources under the European Structural and Investment Funds (ESIF) into financial products such as loans, guarantees, equity and other risk-bearing mechanisms. These are then used to support economically viable projects which promote EU policy objectives. FIs aim to put EU funds to good and efficient use, ensuring that grants are complemented by other financial products so that EU funding can be used time and time again in a revolving fashion. FIs can be combined with technical support or guarantee/interest rate subsidies. EIB provide finance for investments that contribute to: Developing innovative, sustainable agricultural practices and technologies to face challenges such as the growing demand for food or global warming Making food production more sustainable and efficient Enhancing access to finance for farmers, micro-enterprises and SMEs via our financial intermediaries EIB invest in activities and research that prioritise: Climate-resilient production The use of renewable energy and renewable materials Sustainable natural resource management Sustainable and inclusive rural development EIB`s priorities and targets include support for projects with direct environmental and social benefits: all projects selected by the EIB have to be acceptable in environmental and social terms. Small businesses and mid-caps are a key part of the global economy. They create jobs and drive economic development and innovation. Europe's 23 million smaller businesses represent 99% of all businesses and provide around three-quarters of all jobs.
1.2.1. Innovfin Instrument
InnovFin builds on the success of the former Risk-Sharing Finance Facility developed in the early 2000’s under the EU framework programme for research and technological development (FP7). Under the 2014-2020 programming period, the European Union and EIB Group have more than doubled their combined support for innovative firms in Europe. In addition to more financing being made available, InnovFin also offers a greater product range and has been developed in such a way to provide a series of integrated and complementary financing tools.
1.2.2. InnovFin Equity
InnovFin Equity provides equity investments and co-investments to or alongside funds focusing on early stage financing of enterprises operating in innovative sectors covered by Horizon 2020, located or active in the EU or Horizon 2020 Associated Countries.
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In this way, InnovFin Equity supports micro, small or medium-sized enterprises (SMEs) and social enterprises which play a crucial role in promoting innovation and the creation of growth and employment but which face difficulties in accessing finance. Innovative sectors covered by Horizon 2020 include biotechnologies, green technologies, nanotechnologies, as well as areas addressing societal challenges such as resource efficiency, bioeconomy, health, demographics and climate change. InnovFin Equity is available via four products: InnovFin Technology Transfer InnovFin Business Angels InnovFin Venture Capital InnovFin Fund-of-Funds
Figure 2 Innovfin Products of EIB
InnovFin Equity provides equity investments and co-investments to or alongside investment funds, focusing on companies in their early stages of development, operating in innovative sectors covered by Horizon 2020. The aim is to develop an extensive portfolio of funds, mobilizing EUR 4-5bn of investments in businesses established or active in the EU and Horizon 2020 Associated Countries. Under InnovFin Equity, the EIF targets investments in: Technology transfer funds whose strategy focuses on pre-seed (including proof of concept) and seed stages, Funds pooled by business angels or business angel co-investment funds investing into innovative early-stage enterprises and social enterprises, Venture capital funds that provide funding to enterprises, including social enterprises, in their early stage and operating in Horizon 2020 sectors.
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InnovFin Equity is particularly suited to provide support to “first-time” or “emerging” investment teams engaging in their first institutional fundraising round. The EIF will seek to have a catalytic role by acting as an anchor investor in the first closings of the funds. EIB also offers a long-term venture debt product to address the unique funding needs of fast growing innovative companies. The financing structure includes bullet repayment and remuneration linked to the equity risk of the investees and complements existing venture capital financing.
1.2.3. Agriculture and Bioeconomy Programme Loan:
This Programme Loan was made possible by the European Fund for Strategic Investments (EFSI), which is the central pillar of the Investment Plan for Europe. It was launched by the EIB Group and the European Commission to boost the competitiveness of the European economy. Small and medium sized enterprises (with large investment plan of at least EUR 15m), midcap cooperatives and larger private sector enterprises active in the bioeconomy across the EU can benefit from the loan in the following ways; • Long term financing complementing traditional short term loans, supporting a long term strategy and growth of companies. • Competitive pricing and attractive conditions. • An EIB loan provides a quality stamp and positive signaling effect. • Diversification of the funding base.
Table 2 Agriculture and Bioeconomy Programme Details
1.2.4. European Circular Bioeconomy Fund (ECBF)
With a target fund volume of €250 million, where EIB is committed to contributing up to €100 million, ECBF aims to foster meaningful ESG (Environmental, Social and Governance) investment in the Sustainable Development Goals, demonstrating that impact generation and favorable IRRs are not contradictory.
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The ECBF has five transformational investment fields in focus: Circular Economy / Business Model: Reduction, resource efficiency, re-use, re- cycle, waste stream utilization, supply chain, digitalization Enabling Process Technologies: Biorefineries & Conversion technologies Biomass Production: Increase output & decrease footprint: agro, farming, forestry, blue economy Bio-based Materials: Building blocks, polymers, fibers, composites Performance Biologicals: Personal care, nutrition, specialties Target scope the following industry subsectors will be covered: Circular economy technologies and new business models incl. digitalization which enable resource efficiency and supply chain optimization, re-usage, reduction and recycling of waste streams as well as carbon capture Biomass/feedstock production, i.e. increase of output and/or decrease footprint of agriculture, farming, forestry and blue economy Technologies to enable biomass/feedstock processing, e.g. biorefineries and conversion technologies Bio-based chemicals & materials, e.g. monomeric building blocks, polymers, fibers and composites Performance biologicals, i.e. specialties with applications in nutrition, personal care and other industry verticals.
1.2.5. Relevant Projects:
Agri-Infrastructure and Biomass Power Generation: Led by Kernel Holding in Ukraine, the project consists of the financing of two inland grain silos, a grain handling and storage terminal located within the Port of Chernomorsk, five biomass-fired combined heat and power plants (CHPs) and one sunflower oil crushing plant, in different locations in Ukraine. https://ewsdata.rightsindevelopment.org/projects/20160881- agri-infrastructure-and-biomass-power-generation/
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Eiffel Essential Fund : The fund led by EIFFEL INVESTMENT GROUP in France to provide growth capital to small and medium sized enterprises (SMEs) in the energy transition, the agrifood and the health sectors across Europe.
The Fund is targeting equity into specialised small to mid- sized developers/companies to finance the capital expenditure programmes in EIB-eligible subsectors and costs, in particular small-scale renewable energy and energy efficiency (50% of the pipeline), healthcare (30%) and agriculture/bioeconomy (20%). https://www.eib.org/en/products/equity/funds/eiffel_energ y_transition_fund
Carbery Group Investment Programme: The project concerns an investment programme at the promoter's processing plant in Ballineen, Co. Cork, west Ireland. The EIB financing will support the development of new dairy products and contribute to expand the production facility. https://www.eib.org/en/press/all/2019-332-eur-35-million-
eib-backing-for-carbery-group-innovation-and- internationalisation Irish Smart Meter Implementation Programme: The project will finance a national programme for the roll- out of electricity smart metering infrastructure in the Republic of Ireland during 2019-2024. The project aims at modernizing the electricity meters across the country, by providing ca. 2.25 million smart meters, communication infrastructure, as well as the necessary IT systems. Advanced metering systems will allow remote reading and near real-time consumption information to end-customers, thus enabling better access to consumption information. Ultimately, these capabilities will increase consumer awareness of cost of energy supply thus spur energy efficiency, more efficient management of the power system, and more efficient metering and customer management operations. https://www.eib.org/en/projects/pipelines/all/20180150
Table 3 EIB Relevant Projects
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1.3. European Green Deal
The European Green Deal is a set of policy initiatives by the European Commission with the overarching aim of making Europe climate neutral in 2050. An impact assessed plan will also be presented to increase the EU's greenhouse gas emission reductions target for 2030 to at least 50% and towards 55% compared with 1990 levels. The European Green Deal provides an action plan to: Boost the efficient use of resources by moving to a clean, circular economy Restore biodiversity and cut pollution The plan outlines investments needed and financing tools available. It explains how to ensure a just and inclusive transition. Reaching these target will require action by all sectors of EU economy, including: Investing in environmentally-friendly technologies Supporting industry to innovate Rolling out cleaner, cheaper and healthier forms of private and public transport Decarbonizing the energy sector Ensuring buildings are more energy efficient Working with international partners to improve global environmental standards The EU will also provide financial support and technical assistance to help those that are most affected by the move towards the green economy. This is called the Just Transition Mechanism which aims to mobilize at least €100 billion over the period 2021-2027 in the most affected regions.
Green Partnerships
There will be a new wave of research and innovation partnerships under Horizon Europe. Partnerships will help drive the huge transformations in environment, society and the economy that the European Green Deal calls for. The EU will work closely with industry and countries to support partnerships in critical areas such as transport, clean hydrogen, low-carbon steel, circular biobased sectors, the built environment and biodiversity.
Action Plans
According to a recent Eurobarometer survey the growing amount of waste is among the 3 top environmental concerns to citizens. The interviewed considered that the most effective ways of tackling environmental problems are by changing the way we consume and the way we produce. The Circular Economy Action Plan presents new initiatives along the entire life cycle of products in order to modernize and transform economy while protecting the environment. It is driven by the ambition to make sustainable products that last and to enable citizens to take full part in the circular economy and benefit from the positive change that it brings about.
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The Farm to Fork Strategy is at the heart of the Green Deal. It addresses comprehensively the challenges of sustainable food systems and recognizes the inextricable links between healthy people, healthy societies and a healthy planet. The Farm to Fork Strategy aims to accelerate our transition to a sustainable food system that should: Have a neutral or positive environmental impact Help to mitigate climate change and adapt to its impacts Reverse the loss of biodiversity Ensure food security, nutrition and public health, making sure that everyone has access to sufficient, safe, nutritious, sustainable food Preserve affordability of food while generating fairer economic returns, fostering competitiveness of the eu supply sector and promoting fair trade
1.4. LIFE Programme
The LIFE programme is the EU’s funding instrument for environment and climate action first established in 1992. The current funding period 2014-2020 has a budget of €3.4 billion. Any entity registered in the EU can make a proposal for LIFE traditional, integrated, preparatory, and technical assistance projects under the sub-programmes for environment and climate action. It is suitable for: Public bodies operating under a national government’s authority, e.g. Local authority, national administration etc. Private commercial organizations Private non-commercial organizations (NGO`s etc.) In contrast to other funding programmes LIFE projects are very flexible in terms of how they are set up. The LIFE programme is divided in two sub-programmes, environment (representing 75% of the overall financial envelope) and climate change (representing 25% of the envelope).
1.4.1. LIFE - Environment Sub-Programme
The environment sub-programme funds nature conservation projects in particular in the areas of biodiversity, habitats and species. It provides action grants for best practice, pilot and demonstration projects that contribute to the implementation of the EU’s directives on birds and habitats, the EU’s biodiversity strategy to 2020, and the development, implementation and management of the Natura 2000 network. LIFE co-finances projects in the environmental sector in particular in the areas of air, chemicals, green and circular economy, industrial accidents, marine and coastal management, noise, soil, waste, water, and the urban environment. The programme provides action grants for pilot and demonstration projects to develop, test and demonstrate policy or management approaches. It also covers the development and demonstration of innovative technologies, implementation, monitoring and evaluation of
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EU environmental policy and law, as well as best practices and solutions. The European Commission is particularly looking for technologies and solutions that are ready to be implemented in close-to-market conditions, at industrial or commercial scale during the project duration. Projects receive a co-funding of up to 55%.
1.4.2. LIFE - Climate Action Sub-Programme
The climate action sub-programme supports projects in the areas of renewable energies, energy efficiency, farming, land use, and peatland management. It provides action grants for best practice, pilot and demonstration projects that contribute to the reduction of greenhouse gas emissions, the implementation and development of EU policy and law, best practices and solutions. The sub-programme also promotes knowledge sharing and integrated approaches, such as for climate change mitigation strategies and action plans at local, regional or national level. Projects receive a co-funding of up to 55%.
1.4.3. New LIFE Programme
The European Commission proposed on 1 June 2018 a regulation establishing a new LIFE programme for 2021-2027. The aim is to design an enhanced programme in order: to contribute to the shift towards a clean, circular, energy-efficient, low-carbon and climate-resilient economy, including through the transition to clean energy to protect and improve the quality of the environment to halt and reverse biodiversity loss, thereby contributing to sustainable development To these ends, the Commission proposes €5.45 billion in current prices (0.43% of total EU spending) to be earmarked to the new programme containing two main portfolios, Environment and Climate Action, and covering four sub-programmes: Nature and Biodiversity Circular Economy and Quality of Life Climate Change Mitigation and Adaptation Clean Energy Transition Regarding the transition to circular economy, LIFE funding would target projects related to best technologies, practices and solutions developed at local, regional or national level. This also includes integrated approaches for implementing waste management and prevention plans, and addressing marine litter. To support the shift towards a clean energy, especially in regions that lag behind and have difficulty to absorb funding from the European structural and investment funds, the new programme would encourage investment and activities focusing in particular on energy efficiency and small-scale renewables. Expanding investments in climate action through LIFE funding follows the EU approach to integrate climate objectives in all instruments of the next MFF. According to the
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Commission, 25% of the EU budget expenditure and 61% of the financial envelope of the new LIFE programme would be climate-related.
1.4.4. Relevant Projects
Farm4More: LIFE farm4more aims to implement a suite of technologies, strategies and techniques to achieve climate mitigation in animal protein production. The two technology implementations central to this project are a novel biochar- and green biorefinery-pilot plant both of which are being commissioned in Austria. The biochar pilot plant aims to produce GHG reducing animal feed additives while the green biorefinery aims to process organic grass-silage into high value organic protein feeds (pigs and chickens) and green chemicals. The biorefinery pilot plant will also produce an organic grass silage press cake which will be tested for its ruminant animal feed properties. https://www.farm4more.ie/ Whey2LIFE aims at addressing the environmental impacts of cheese production by overcoming the main barrier currently limiting the appropriate valorisation of whey permeate (WP). This barrier is the lack of investment by dairy companies to address WP valorisation and the absence of a proven economically-affordable process for whey permeate reuse that makes it worth extending its value chain http://www.whey2life.ie/ LIFE MycoRestore seeks to utilise diverse mycological resources and forest management practices to contribute to the biological resilience of Mediterranean forests. It also aims at generating new income sources and ensuring the stability of forest ecosystem services while addressing the effects of climate change.
Table 4 Life Programme Relevant Projects
1.5. European Agricultural Fund for Rural Development
The Common Agricultural Policy (CAP) supports the vibrancy and economic viability of rural communities through rural development measures.
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The rural development measures reinforce the market measures and income supports of the CAP with strategies and funding to strengthen the EU’s agri-food and forestry sectors, environmental sustainability, and the wellbeing of rural areas in general. The three long-term rural development objectives for the 2014-20 period include: Fostering the competitiveness of agriculture; Ensuring the sustainable management of natural resources, and climate action; Achieving a balanced territorial development of rural economies and communities including the creation and maintenance of employment. The European Agricultural Fund for Rural Development (EAFRD) is the funding instrument of the CAP that supports rural development strategies and projects. It also forms part of the European structural investment funds (ESIF). The EAFRD budget for the 2014-20 period amounts to around €100 billion. The budget is spent over the course of this period, through the implementation of rural development programmes which run until the end of 2023.
It is distributed according to six priorities: Fostering knowledge transfer and innovation in agriculture, forestry and rural areas; Enhancing the viability and competitiveness of all types of agriculture, and promoting innovative farm technologies and sustainable forest management; Promoting food chain organization, animal welfare and risk management in agriculture; Promoting resource efficiency and supporting the shift toward a low-carbon and climate resilient economy in the agriculture, food and forestry sectors; Restoring, preserving and enhancing ecosystems related to agriculture and forestry; Promoting social inclusion, poverty reduction and economic development in rural areas. Each of these priorities shall contribute to the cross-cutting objectives of innovation, environment and climate change mitigation and adaptation.
1.6. European Innovation Partnerships Agriculture (EIP-Agri)
The agricultural European Innovation Partnership (EIP-AGRI) works to foster competitive and sustainable farming and forestry that achieves more and better from less. It contributes to ensuring a steady supply of food, feed and biomaterials, developing its work in harmony with the essential natural resources on which farming depends. The EIP-AGRI brings together innovation actors (farmers, advisers, researchers, businesses, NGOs and others) in agriculture and forestry, at EU level. Together they form an EU-wide EIP network. Within this network, Operational Groups, Multi-actor projects and Thematic Networks are all key building blocks. While Operational Groups are funded under the Rural Development Programmes, Multi-Actor projects and Thematic Networks are supported by the H2020 Programme. EIP-AGRI Operational Groups are project-based and tackle a certain (practical) problem or opportunity which
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may lead to an innovation. The Operational Group approach makes the best use of different types of knowledge (practical, scientific, technical, organizational, etc.) in an interactive way. An Operational Group is composed of those key actors that are in the best position to realize the project's goals, to share implementation experiences and to disseminate the outcomes broadly. Operational Groups are currently being set up in several EU countries and regions.
1.6.1. Relevant Projects
Biorefinery Glas is a European Innovation Partnership (EIP) Operational Group led by the Institute of Technology Tralee that aims to improve the sustainability, value and resource efficiency of Ireland’s livestock sector through farmer diversification into the bioeconomy. The project will demonstrate a replicable small-scale biorefinery with farmers in the West Cork Region. Through biorefining, perennial ryegrass is fractionated into a variety of new products in a process which improves the protein efficiency, value and sustainability of grasslands. https://biorefineryglas.eu/ The Biomass for Farm Bioeconomy project aims to demonstrate how currently unwanted/unutilized agricultural biomass such as rushes, gorse, bracken and hazel can be used to produce biochar through a life cycle approach to current farm vegetative control/management practices. In doing so make direct use of this biochar to sustain a circular bioeconomy on an off the farm as well as providing downstream ecosystem service. https://www.biomasstobiochar.ie/ The Small Biogas Demonstration Project aims to stimulate the deployment of innovative on-farm small-scale biogas production by providing support and a capital contribution to three demonstration projects. Research will assist in understanding how biogas can drive sustainability improvements at farm level. https://www.irbea.org/farmbiogas/ Table 5 Relevant EIP-Agri Projects
1.7. Biobased Industries Joint Undertaking
The Bio-based Industries Joint Undertaking (BBI JU) is a €3.7 billion Public-Private Partnership between the European Union and the Bio-based Industries Consortium (BIC). Until today, BBI JU has funded 123 bio-based innovation projects involving 924 beneficiaries from 37 EU Member States and Associated Countries.
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The two founding partners contribute to the Joint Undertaking: €975 million in funding is provided by the Horizon 2020 programme of the European Union and €2.7 billion is contributed by the private sector, represented by BIC. By 2024, each euro of BBI JU funding is expected to have attracted a private contribution of €2.8. During the end of Horizon 2020, BBI JU will continue to support sustainability-driven innovation in creating new local value from waste and biomass and a new partnership for the period of 2021-2027, called Circular Bio-based Europe (CBE) will be built on the experience gained in the existing BBI JU by mid-2021.
1.7.1. Focus
BBI JU projects have three main focus areas: • Feedstock: foster a sustainable biomass supply in Europe that does not compete with food production, and create new supply chains • Biorefineries: optimize efficient processing through R&D and demonstrate the model’s efficiency and economic viability at a large-scale in demonstration actions and flagship biorefineries • Markets, products and policies: develop markets for bio-based products and optimize policy frameworks to ease their market uptake
1.7.2. Tackling Europe's Major Challenges
The bio-based industries sector offers a vast potential to tackle today’s major societal challenges ranging from environmental degradation to climate change while having a positive socio-economic impact. As compared to 2014 figures, a strong European bio- based industrial sector will: • Replace 25% of oil-based chemicals by 2030 • Drastically reduce EU’s dependency on the import of strategic raw materials, such as protein (by 50%), phosphorus and potassium (by 25%) • Cut greenhouse gas (GHG) emissions by 50% • Create up to 700,000 green jobs by 2030, especially in rural and coastal areas
1.7.3. Objectives
The Bio-Based Industries Joint Undertaking (BBI JU) wants to contribute to a more resource-efficient and sustainable low-carbon economy, as well as increase economic growth and employment, in particular in rural and coastal areas. This is achieved by developing competitive bio-based industries sector based on advanced biorefineries that source their biomass sustainably in Europe. The Council Regulation (EU) No 560/2014 establishes BBI JU and sets up its objectives:
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Demonstrate technologies that enable new bio-based chemical building blocks, materials, and consumer products and bring them closer to the market to replace fossil-based alternatives Develop business models that foster the collaboration between stakeholders from across Europe along the entire value chains Set up flagship biorefineries that deploy such technologies and business models to demonstrate that cost and performance of bio-based products are competitive with those of their fossil-based alternatives.
1.7.4. Relevant Projects
The main objective of the AgriChemWhey is to develop the world’s first integrated biorefinery for converting food- processing residues to bio-based chemicals. It will see a dedicated plant developed in Ireland. The project will see a new value chain for lactic acid from dairy production residues. https://www.agrichemwhey.com/
FIRST2RUN project aims at demonstrating (TRL8) the techno, economic and environmental sustainability at industrial scale of a first-of-kind value chain where low input and underutilized oil crops (i.e. cardoon) grown in arid and/or marginal lands and not in competition with food or feed, are exploited for the extraction of vegetable oils to be further converted through chemical and biotechnological processes into bio-monomers (mainly pelargonic and azelaic acids) and esters that will be applied in the formulation of bio products (biolubricants, cosmetics, bioplastics). http://www.first2run.eu/ The AFTERBIOCHEM project aims to develop the first all-in- one chemical platform for transforming the sugar industry’s side streams – mainly beet pulp and molasses as well as non-food biomass feedstocks – into bio-sourced molecules and derivatives of industrial interest. This will create added value and increased economic and environmental sustainability to the sugar beet industry at a time when it faces severe competitive pressure. http://after-biochem.eu/ The purpose of the ALEHOOP project is to demonstrate - at pilot scale - the feasibility of recovering low-cost dietary proteins from algae-based and plant residual biomass sources, namely seaweed and the by-products of legume production using biorefineries. This will convert the biomass into alternative forms of proteins for a variety of uses, ranging
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from animal feed, food additives and high-end applications in nutritional awareness and health management. https://www.bbi-europe.eu/projects/alehoop
Table 6 BIJ Relevant Projects
1.8. List of The Financial Intermediaries of The EU and EIB Funds Investmen Sources Financial Type of Amount Additional t of Intermediaries Finance of Finance Information Focus Finance
Rewilding Europe Capital NCFF: loans and investments in funds to support projects which Loan/ > 100.000 € EIB, Cleantech promote the Guarantee < 600.000 € conservation of LIFE natural capital, including adaptation to climate change
EIB Loan/ > 5.000.000 Guarantee € Focus: Nature, , < Biodiversity & Cleantech LIFE Equity/ 15.000.000 Climate Change Venture € Adaptation capital Microfinance Ireland All Microcredit and sectors/ microloans for Loan/ general, vulnerable groups EFSI Guarantee Start-up, and early microenterprises < 25.000 € stage EIB Loans and All sectors/ guarantees to > 7.500.000 general, innovative € Loan/ Research, businesses; EIB, < Guarantee developme Financing of InnovFin 300.000.000 nt, research & € innovation development projects Strategic Banking Corporation of Loan/ All sectors/ COSME, Ireland Guarantee general EFSI
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Sustainable Irish forestry NCFF: loans and fund (SLM investments in Partners) funds to support projects which promote the Loan/ EIB, Cleantech conservation of Guarantee natural capital, LIFE including adaptation to climate change
Allied Irish Banks The EIB Loan can be used to finance Loan/ All sectors/ investments and EIB Guarantee general overheads or outlays < 300.000 € EIB Venture Debt Loan/ Focus: Investments Guarantee in research & , > 7.500.000 development which EIB, Equity/ € are undertaken EFSI Venture over a period of up capital to 3 years DLL Group - De Lage The EIB Loan can Landen be used to finance Loan/ All sectors/ International B.V. investments and EIB Guarantee general overheads or outlays < 300.000 € Kreos Capital All sectors/ general, Loan/ Expansion Guarantee stage , EFSI, (growth), Equity/ EIF ICT sector, Venture < Life capital 30.000.000 Sciences, € Cleantech Strategic Banking Corporation of All sectors/ Ireland general, Research, > 25.000 € Loan/ developme InnovFin, < 7.500.000 Guarantee nt, EFSI € innovation, Start-up, early stage
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Expansion stage Equity/ Volpi Capital (growth), EFSI, Venture Investments II SCSp ICT sector EIF capital
Equity/ Start-up, Venture early Balderton Capital VII capital stage, ICT EFSI, S.L.P. sector EIF
Fountain Focus: Specialty Start-up, Pharma, Healthcare Partners Equity/ early Biopharmaceuticals, EFSI, Venture stage, Life Medical Devices, EIF capital Sciences Diagnostics
Start-up, Lombard Odier early COSME, Equity/ European Venture stage, InnovFin, Venture Capital Opportunity Expansion EFSI, capital Fund Ill stage EIF (growth) Fountain Healthcare Partners Start-up, Equity/ Fund III early Venture EFSI stage, Life capital Sciences
Atlantic Bridge IV Focus: Robotics, Autonomous Vehicles Cyber Security, Big Data, Cloud Expansion Artificial Equity/ stage Intelligence, EFSI, Venture (growth), Machine Learning, EIF capital ICT sector Computer Visioning Industry 4.0, Internet Of Things, Smart Edge Devices And Semiconductors Atlantic Bridge Expansion Equity/ stage Venture EIF (growth), capital ICT sector
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Scottish Equity Partners Research, developme nt, Sector focus: innovation, Equity/ Internet, Expansion EFSI, Venture ecommerce, SaaS, stage EIF capital e-healthcare, (growth), ICT sector, energy efficiency Life Sciences Mayfair Equity Partners
Equity/ Expansion Focus: TMT and Venture stage EIF Consumer sectors capital (growth)
Act Ventures All sectors/ general, Research, developme nt, Focus: application COSME, Equity/ innovation, software, IT InnovFin, Venture Start-up, infrastructure, EFSI, capital early communications, EIF stage, Internet and mobile. Expansion stage (growth), ICT sector European Angels Fund All sectors/ general, Research, Equity/ InnovFin, developme Venture EFSI, nt, capital EIF innovation, Start-up, early stage Ireland Strategic Investment Fund Equity/ Focus: agriculture EIB, Venture Cleantech sector EFSI capital
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University Bridge Fund All sectors/ Equity/ general, EFSI, Venture Start-up, EIF capital early stage, ICT sector
Direct access to all open calls for EU grants, funds and proposals published All sectors/ programmes by the Commission general (calls for proposals) (among them, many SME-specific programmes). Frontline Ventures All sectors/ general, Research, developme Focus: Big Data, Equity/ InnovFin, > 100.000 € nt, Cloud Services, Venture EFSI, < 750.000 € innovation, Internet, and capital EIF Start-up, Mobile. early stage, ICT sector Social Finance Social Foundation Ireland enterprise s EaSI, EFSI
Seroba Life Start-up, Sciences Fund Equity/ Focus on early EFSI, Venture therapeutics and stage, Life EIF capital medical devices. < Sciences 10.000.000€ Table 7 List of Financial Intermediaries
2. NATIONAL AND REGIONAL FUNDS
2.1. Project Ireland 2040
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Project Ireland 2040 is the Irish government’s long-term overarching strategy to make Ireland a better country for all of its people. The plan changes how investment is made in public infrastructure in Ireland which saw public investment spread too thinly and investment decisions that didn’t align with a well-thought-out and defined strategy. Alongside the development of physical infrastructure, Project Ireland 2040 supports business and communities across all of Ireland in realizing their potential. The four new funds will help to ensure balanced regional development and are designed to stimulate renewal and investment in rural and urban areas, the environment and innovation, preparing Ireland for a future with 1 million more people and 660,000 more people at work. €2 billion Urban Regeneration and Development Fund: will secure more compact, sustainable growth in Ireland’s five cities and other large urban centres. €1 billion Rural Development Fund: will support job creation in rural areas, address de-population of rural communities and support improvements in towns, villages and their hinterlands that enhance the quality of life of communities and enhance their attractiveness for families who want to live and work there. €500 million Climate Action Fund: will support initiatives that contribute to the achievement of Ireland's climate and energy targets. €500 million Disruptive Technologies Fund: will see investment in the development and deployment of disruptive innovative technologies and applications, on a commercial basis, targeted at tackling national and global challenges.
2.1.1. Climate Action Fund The Climate Action Fund is one of four funds established under the National Development Plan 2018-2027 as part of Project Ireland 2040. The fund will support initiatives that contribute to the achievement of Ireland's climate and energy targets in a cost effective manner. It offers the potential for innovative interventions which, in the absence of support from the fund, would not otherwise be developed. The Fund will also seek to facilitate projects that contribute to other Government policy priorities including: Supporting innovation and capacity building towards the development of climate change solutions capable of being scaled and delivering benefits beyond a once- off impact. Generating wider socio-economic benefits such as job creation, air quality improvements, reduction in fuel poverty, bio-diversity and community resilience and development. The Department of Communications, Climate Action and Environment has responsibility for implementing the fund, which will have an allocation of at least €500 million over the period to 2027.
2.1.2. Rural Regeneration and Development Fund The Rural Regeneration and Development Fund is a commitment of €1 billion by government to be invested in rural Ireland over the period 2019 to 2027.
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The purpose of the fund is to support job creation in rural areas, address de-population of rural communities and support improvements in our towns and villages with a population of less than 10,000, and outlying areas. In that regard, the projects allocated support from the fund to date have already begun to provide an important economic stimulus for rural areas, meeting the needs and objectives identified by stakeholders around the country. With the focus now on economic recovery and equipping rural communities to address the challenges faced, the capital investment provided by the fund can assist in achieving sustainable community and economic development in rural Ireland; the revitalization and regeneration of towns and villages; the encouragement of entrepreneurship and innovation; the development of key economic growth sectors such as the bio-economy and agri-food; assist other sectors, such as tourism, in meeting new challenges; improved community development and quality of life; and the protection of the environment and implementing climate action. To date, this fund has now provided €166 million for 139 projects across Ireland, worth a total of €237 million. The fund is supporting coordinated and integrated projects between government departments, State agencies, local authorities, other public bodies, communities and, where appropriate, philanthropic funders and/or the private sector, which will have an impact on sustainable economic and social development in rural areas. Funding is being awarded through a competitive bid process. As a general rule, the fund will provide up to 90% of the total project value, with at least 10% to be provided in matching contributions by the applicants. A minimum of 20% of the matching contributions element must be in cash. The minimum request from the fund for Category 1 projects is €500,000. There is no upper limit, but all proposals must demonstrate detailed project costings and clear value for money. The complexity of the appraisal requirements and the methods used will depend on the size and nature of the project and should be proportionate to its scale. Further guidance is set out for information of applicants in the Public Spending Code. For the purposes of compliance with public financial procedures, the lead party to an application must be a State-funded body. For the purposes of clarity, State-funded bodies are local authorities, Local Development Companies and other State agencies, including Commercial State bodies. The fund will focus on all settlements and rural areas with fewer than 10,000 people which are located outside the five city metropolitan areas. Projects that involve collaboration across Local Authority boundaries, as well as within those boundaries, are strongly encouraged, where the participating settlements/areas meet the population criteria. Rural towns with a population of over 10,000 people will be eligible to apply for funding under calls for the Urban Regeneration and Development Fund, which is administered by the Department of Housing, Planning and Local Government.
2.1.3. Disruptive Technologies Innovation Fund
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The Disruptive Technologies Innovation Fund (DTIF) is a €500 million fund established under Project Ireland 2040 and is run by the Department of Business, Enterprise and Innovation with administrative support from Enterprise Ireland. DTIF is about funding collaborations that demonstrate technology-based disruptive innovation, collaborations that can: Alter markets; Alter the way business operates; Involve new products or the emergence of new business models.
2.1.4. Relevant Projects
Gas Networks Ireland: GRAZE Gas - Green Renewable Agricultural Zero Emissions Gas Up to €8.5 million is being provided to support the installation of the first transmission connected Central Grid Injection (CGI) facility for renewable gas and a grant scheme to support circa 74 compressed natural gas vehicles. https://www.gasnetworks.ie/business/renewable- gas/innovation-fund/ Irish Rail: Hybrid Drive for Inter City Railcar fleet Up to €15 million is being invested to design new hybrid power- packs for intercity railcars to reduce diesel use and greenhouse gas emissions. Following the proof of concept in one three car train, the hybrid power-packs will be implemented across the wider fleet.
ESB eCars: Up to €10 million is being provided to develop a nationwide, state-of-the-art electric vehicle charging network capable of facilitating large-scale electric vehicle uptake over the next decade.
https://www.esb.ie/ecars The project will deliver a unique integration of company`s Biowave™ microwave treatment technology and NVP Energy's low temperature anaerobic digestion technology. https://www.ashleighenv.com/post/disruptive- technologies-innovation-funding-awarded
Table 8 Project Ireland Relevant Projects
2.2. LEADER Programme Funding Since its launch in 1991, LEADER programme has helped rural communities across the European Union to actively engage and to direct the local development of their area, through community-led local development.
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The LEADER Programme accepts applications based on projects which improve: Rural tourism Enterprise development Broadband Basic services targeted at hard-to-reach communities Rural youth Protection and sustainable use of water resources Local biodiversity Renewable energy The programme is administered at a local level by 29 local action groups. These contain local representatives from the community, public and private sector. Each group is responsible for selecting and awarding LEADER funding to projects within their geographical area. A project must be aligned with the priorities of the local development strategy. The total funding available under the LEADER 2014-2020 Programme is €250 million.
2.2.1. Relevant Projects This LEADER project, entitled ‘Making An Gairdín Beo an Inclusive Space for the Whole Community’, supported the renovation of an on-site existing building to complement the garden. This refurbishment has made the building safe and usable for a number of events which can cater for up to 150 people all year round.
Blackwater Eco Tours: The Villierstown Education and Culture Project is a social enterprise established in 2010. Managed by local volunteers, it provides a number of services and activities including childcare services, a community boat club and now a tourism business called Blackwater Eco Tours. LEADER funding was used to purchase three self-drive boats for guided eco tours along the river Blackwater. Blackwater Eco Tours have since teamed up with a local glamping business to offer tourists a combined glamping and eco tour package
Billy’s Tearooms & Shop: This LEADER project directly addressed the lack of social spaces and the need for a community shop in Ballyhale by supporting the refurbishment of an old cottage to create the space which is now a focal point for the local community.
Table 9 Leader Programme Relevant Projects
2.3. Enterprise Ireland
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Enterprise Ireland is the state agency responsible for supporting the development of manufacturing and internationally traded services companies. It provides funding and supports for companies from entrepreneurs with business propositions for a high potential start-up through to large companies expanding their activities, improving efficiency and growing international sales. Enterprise Ireland - Start-up Team This is for start-up businesses with a potential to develop an innovative product or service for sale on international markets and the potential to create 10 jobs and €1m in export sales within 3 years of starting up. High Potential Start-Up (HPSU) Funding Enterprise Ireland is responsible for supporting High Potential Start-Up (HPSU) Companies. HPSUs are start-up businesses with the potential to develop an innovative product or service for sale on international markets and the potential to create 10 jobs and €1m in sales within 3 years of starting up. Established SME Funding An Established SME client is a company that is not a HPSU client, has an established trading record, the company (or its group of companies) employs between 10 and 250 employees, has either an annual turnover of less than €50m or an annual balance sheet of less than €43m. Funding decisions are determined by the; Need for financial support for the project Potential employment and sales growth Previous funding provided to the company Regional location of the company Large Company Funding A large company is a company that employs greater than 250 employees, has either an annual turnover of greater than €50m or an annual balance sheet of greater than €43m. Funding decisions are determined by the; Need for financial support for the project Potential employment and sales growth Previous funding provided to the company Regional location of the company
2.4. The Strategic Banking Corporation of Ireland
The Strategic Banking Corporation of Ireland (SBCI) was established in 2014 to avail of both national and international funding for the purpose of making low-cost credit available to Irish SMEs. Credit is provided through on-lending partners who, in turn, lend directly to SMEs. The Future Growth Loan Scheme
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The Future Growth Loan Scheme is a long-term loan (7-10 years) that is offered by the SBCI with the support of the Department of Business, Enterprise and Innovation, the Department of Agriculture, Food and the Marine, the European Investment Bank and the European Investment Fund (EIF). The Future Growth Loan Scheme (FGLS) benefits from a guarantee from the European Union under the European Fund for Strategic Investments (EFSI). The Future Growth Loan scheme was delivered to the market by the SBCI in June 2019. The capacity of the Future Growth Loan Scheme has now been increased by up to €500m which will be made available through a number of financial providers in the coming months. The Scheme is supported by the Department of Business Enterprise and Innovation and the Department of Agriculture, Food and the Marine. To date, there has been very strong demand from SMEs and farmers for the longer-term, lower-cost finance. The Covid 19 Credit Guarantee Scheme The “Scheme” is provided by the Government of Ireland to facilitate lending to micro, small and medium-sized enterprises, and small mid-caps adversely impacted by Covid- 19. The Covid-19 Credit Guarantee Scheme facilitates the provision of liquidity and working capital to businesses with an initial focus on term and working capital loans. The Scheme enables a borrower impacted by Covid-19 to access credit. The borrower contributes to the cost of the Scheme by paying a guarantee premium on the credit advanced. This premium is separate from and is in addition to the cost of the credit advanced.
2.5. Halo Business Angel Network (HBAN)
Halo Business Angel Network (HBAN) is the all-island umbrella group responsible for the development of business angel networks and syndicates. Through actively working to support the formation and operation of new and existing angel networks, as well as to increase the number of angel investors in early stage Irish companies, HBAN support the entrepreneurial community across the island of Ireland. HBAN is a joint initiative of Enterprise Ireland, Inter Trade Ireland and Invest Northern Ireland, managed by Dublin BIC in partnership with the Irish BIC's and Clarendon Fund Managers. The all-island umbrella group works on a regional basis to support the formation of new angel networks and works with existing angel networks to develop their capability and capacity and across a range of industry sectors. HBAN also acts as a voice to government, stakeholders, business and the media to promote the interests and needs of the wider angel investment community. HBAN is managed by Dublin BIC in partnership with the regional Irish BICs in Cork, Galway & Waterford and with Clarendon Fund Managers in Northern Ireland. HBAN has been helping start-ups access funding for growth since 2007. Since then, angel investment has continued to accelerate as the number of active angels, and companies pitching for investment grows. Approximately 150 companies pitch to investors within the HBAN network each year, with one-in-three receiving funding as a
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result. To date HBAN angels have invested more than €118m in start-ups since the inception of the network. In 2019, HBAN business angels across Ireland invested €16.8m into 66 companies. This direct angel investment leveraged a further €36m from public and private funds through organizations such as Enterprise Ireland and Venture Capital funds, bringing the total funding in these deals to €52m. These numbers have risen steadily from 2011 when HBAN helped 29 companies raise €12m of which €6m came from angel investors. Business angel investors are high net worth individuals who provide smaller amounts of finance (typically in the range €50,000/£40,000 to €250,000/£200,000) at an earlier stage than many venture capital funds are able to invest. They are increasingly investing alongside both seed venture capital funds and government agency funding on the island.
3. PRIVATE FUNDING
Most public funds are not adequate to cover 100% of the investments, therefore private funding stands as a good option to share the risk and cost of new investments. On contrary to the common view, private funding has the potential to adjust the shortcomings of the public funding by; Providing additional funds compared to public channels that successful campaigns generally provide funds exceeding the capital requirements of the project. Faster fundraising process with shorter approval periods. Simpler application procedure and more public attention into the project. For small businesses exploring their financing options, the first order of business is to distinguish between debt and equity financing. Debt financing involves taking out a loan, whereas equity financing is a purchase of a share of the profits or control over the company. Private equity at the startup level is often seen in two forms: seed or angel investment, or venture capital.
3.1. Venture Capital
Venture capital (VC) firms invest money in startups, usually in exchange for equity in the company. Venture capitalists analyze business plans, financial statements and other business details to determine the overall expected return on investment before investing in a portfolio company. Companies are most likely to attract venture capital if they have an immediate opportunity for growth, as VC firms will generally want to exit within five years. Such high-growth enterprises represent a lot of risk, which is why VCs require a much higher return on investment from their portfolio companies compared to other private equity firms. Venture capitalists also provide guidance to young companies, like mentorship, access to sales networks and other development opportunities. Deliverable 3.2 Guide on financing options, markets and business models for farmer uptake of small- scale biorefinery technology Page 38 of 44
In a lot of circumstances, the venture capital might be more expensive than bank debt. However, the value that can be created through that partnership far outweighs a low interest rate. The downside to working with VC, as with any lender looking for equity, is giving up a certain percentage of the company. It also means to have a third party to answer to as the business grows and changes.
Figure 3 European Venture Capital
Source: https://www.ipe.com/venture-capital-venturing-further-in-europe/10029270.article
3.2. Angel/Seed Investing
Much like venture capitalists, angel investors finance startups usually in exchange for equity in the company. Unlike a VC, however, angel investors are private individuals investing their own money. Angel investors also have different ROI requirements depending on their risk appetite, which makes them a better fit for slow growth companies. Similar to angel investing, in seed investing, a group of individuals or a government agency provides the capital. Seed money can be used to pay for preliminary operations such as market research and product development. Most convertible notes are due in three to five years, at which point, the investor can reclaim the money plus interest, or convert the note into shares, or equity.
3.3. Crowdfunding
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Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture. Crowdfunding makes use of the easy accessibility of vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together, with the potential to increase entrepreneurship by expanding the pool of investors beyond the traditional circle of owners, relatives and venture capitalists. Crowdfunding provides the following benefits; It is a safe way of fundraising while restrictions apply to who is allowed to fund a new business and how much they are allowed to contribute. Crowdfunding allows investors to select from hundreds of projects and invest as little as $10. Crowdfunding has created the opportunity for entrepreneurs to raise hundreds of thousands or millions of dollars from anyone with money to invest and provides a forum to anyone with an idea to pitch it in front of waiting investors. Crowdfunding can be structured in different ways and imply different obligations and rights for the promoters of projects, the platforms over which fund raising efforts are carried out and investors. The following are some commonly used crowdfunding structures: Equity: In an equity crowdfunding structure, in exchange for an investment, an investor receives an equity interest in the venture funded. The terms and conditions of the equity investment generally vary on a case-by-case basis. Debt: In a debt crowdfunding structure, capital from individual investors is pooled and then lent to a borrower. Key terms and conditions of the debt investment are based on the general lending parameters of the platform and the risk profile of the borrower. Coin: In a coin-based crowdfunding structure, the investor receives a coin or right to receive a coin based on the expectation that a market will be created for the coin in which it can be valued and traded. Reward: In a reward-based crowdfunding structure, the investor receives some type of reward for his investment. The nature and value of this reward can vary widely. Donation: In a donation-based crowdfunding structure, donations are made by the investor but the investor does not receive anything in return for his investment. There are now several crowdfunding platforms in the market with an agriculture sector focus. Examples of these platforms include AgFunder, Farmfundr, the agriculture funding platform of Symbid and Harvest Returns. Going forward, crowdfunding has the potential to play an important role in the agriculture sector for several reasons. The first reason is that agriculture projects can require a large amount of capital that can exceed the investment thresholds of smaller investors. Crowdfunding can give smaller investors the opportunity to participate in promising agriculture ventures of different sizes and in different parts of the world. The second reason is that crowdfunded capital has the ability to fill the often large space between debt financing and equity investment. This space exists because the time it takes to arrange equity financing often significantly exceeds what food production cycles require, risk and return mismatches and disconnects that often occur between food
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production and profitability cycles and investor capital deployment and capital return timing expectations.
3.3.1. Relevant Projects
Chinova Bioworks is a Canadian bio-foodtech company for the $2B food and beverage preservatives market. Chinova's flagship product Chiber, is a natural preservative that capitalizes on the antimicrobial properties of chitosan, a biopolymer they derive from mushrooms.
https://agfunder.com/portfolio/chinova-bioworks/ Stem has developing a natural low-cost sugar substitute for food products. They have developed a natural 1:1 drop-in sugar substitute for the food market. https://agfunder.com/portfolio/stem/
Jüsto is a fresh e-Grocery retailer based in Mexico City. The company believes that mastering fresh is the key to owning the e-Grocery space. Current in-store pick-and- pack suffers from poor selection and quality, long and inefficient logistics, and inventory that is frequently out of stock since there's rarely real-time monitoring of what's on the retail shelf. Jüsto resolves these inefficiencies with small local fulfilment warehouses. https://justo.mx/home/
Table 10 Crowdfunding Relevant Projects
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4. CONCLUSION
With a turnover value of €2.3 trillion and accounting for 8.2% of the EU's workforce, the bioeconomy is a central element to the functioning and success of the EU economy. The deployment of a sustainable European bioeconomy will lead to the creation of jobs, particularly in coastal and rural areas through the growing participation of primary producers in their local bio economies. According to industry estimates, in the bio-based industries one million new jobs could be created by 2030. The strong and fast-growing startup ecosystem in the biotechnology sector will play a leading role in realizing this potential. The Biorefinery Glas initiative targets the demonstration of a unique bioeconomy model which can allow farmers to diversify their income while solving current challenges for the agricultural sector. Integrating the farmers as operators or producers within the bioeconomy could potentially allow them to access a greater share of the value chain than solely as suppliers. The small-scale approach can also reduce the overall capital expenditure of the biorefinery, making commercialization more feasible compared with larger installation. As evidenced by this report, the bioeconomy is supported by vast amount of funding opportunities at EU and regional level in accordance with its importance for the EU economy. There are many types of financial instruments available to support the bioeconomy, through research activities, as well as demonstration and flagship investments. In an environment of abundant bioeconomy funds, deciding on the optimal capital structure will be the main challenge for the farmers wishing to diversify into the bioeconomy. While it is highly unlikely that farmers or their representatives will be able to finance the whole investment by a single funding instrument, it is possible to combine different instruments with private funding opportunities to finance the whole capital requirement of the investment. While various funding sources are available, surveys conducted through the Biorefinery Glas project, to assess the needs and barriers of farmers with regards to bioeconomy diversification, highlight that farmers require more support in identifying and implementing bioeconomy opportunities, with greater guidance in identifying and accessing the available funds and develop a commercialization strategy. Farmers may also find the administrative burden of participating in such initiatives to be challenging. Therefore, to really maximize the potential for farmers to access these funds, greater efforts need to be made, at a national and regional level, e.g. through KT programmes, to identifying and explain the opportunities to the farming communities. In addition, funding opportunities which are targeting farmers for participation in the bioeconomy, should aim to streamline the reporting process to an acceptable level in line with the resources that are likely to be available.
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https://sbci.gov.ie/# https://www.hban.org/ https://www.businessnewsdaily.com/11015-private-business-funding-sources.html https://www.investopedia.com/terms/c/crowdfunding.asp https://www.eib.org/en/press/all/2020-091-agriculture-and-bioeconomy-eib-approves- eur700-million-of-financing-under-the-investment-plan-for-europe-to-support-private- investment-across-the-eu http://www.eif.europa.eu/what_we_do/equity/single_eu_equity_instrument/innovfinequit y/index.htm https://www.onetoonecf.com/agriculture-projects-crowdfunding/
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