EU’s Defence Equity Facility to Mobilize €500 Million for Dual-Use Innovations

EU’s Defence Equity Facility to Mobilize €500 Million for Dual-Use Innovations

(IN BRIEF) The European Commission and the European Investment Fund (EIF) are collaborating to launch a €175 million Defence Equity Facility, aimed at supporting innovation in the defence sector. The EIF will provide equity funding to venture capital and private equity funds investing in European companies developing dual-use technologies with applications in both civilian and defence sectors. The goal is to attract additional private investments, totaling around €500 million, to bolster European firms. The initiative seeks to improve access to financing for innovative SMEs, including startups, to enhance EU defence and security capabilities. It aligns with the EU’s efforts to promote technological competitiveness and security. The facility builds on a previous partnership between the Commission and EIF in support of the aerospace and defence sector. European leaders emphasize the importance of strengthening EU security and defence capabilities.

(PRESS RELEASE) LUXEMBOURG, 12-Jan-2024 — /EuropaWire/ —  The European Investment Fund (EIF), part of the European Investment Bank Group and established to support Europe’s micro, small and medium-sized enterprises (SMEs), is set to provide €175 million in equity to venture capital and private equity funds dedicated to investing in European companies focusing on innovative technologies with dual-use potential. This initiative, known as the Defence Equity Facility, aims to stimulate additional private investments in the EIF-supported funds, with the goal of mobilizing approximately €500 million to support European firms. The facility aims to bolster access to finance for innovative SMEs, including startups, contributing to the EU’s defence and security objectives. It’s implemented under InvestEU and receives funding from the European Investment Fund and the European Defence Fund, playing a crucial role in the EU Defence Innovation Scheme. This initiative strengthens the collaboration between the Commission and EIF in supporting the aerospace and defence ecosystem, building on the CASSINI Fund launched in January 2022 for space companies.

Thierry Breton, European Commissioner, highlighted the significance of the Defence Equity Facility in improving finance accessibility for the defence sector, promoting private investments in defence innovation, and enhancing Europe’s technological competitiveness and security.

European Commissioner Thierry Breton stated ” With the Defence Equity Facility, we deliver a first step in improving access to finance for the defence sector. This initiative will contribute to sending a positive signal to the market and stimulate private investments in support of defence innovation. It is a key pillar of the EU Defence Innovation Scheme, which aims to enhance Europe’s technological competitiveness and security, by supporting to a thriving ecosystem of defence start-ups and SMEs. It is a first step and we will continue to work with the EIB and EIF to support access to finance in the defence sector.”

Roger Havenith, Deputy Chief Executive of the European Investment Fund, emphasized the goal of catalyzing economic growth stating “Our partnership with the European Commission, under the European Defence Fund, represents a significant milestone in our efforts to drive investment and innovation in a sector of strategic importance for Europe. By supporting private equity and venture capital funds targeting investments in defence technologies with dual-use potential, we aim to catalyse economic growth and foster a thriving entrepreneurial ecosystem in the area of security and defence.”

Kris Peeters, Vice President of the European Investment Bank (EIB), underscored the facility’s alignment with the European Council’s call to enhance EIB Group support for European security and defence, “This is a significant step towards promoting innovation and security in the EU. This partnership will further enhance European defence capabilities in an increasingly interconnected world facing new geopolitical challenges. The Defence Equity Facility will contribute to the objectives of EIB’s Strategic European Security Initiative, and play a key role in promoting state-of-the-art technologies contributing to EU’s defence and security, confirming this strategic area as a priority for the EIB Group.”

This initiative represents a significant step toward promoting innovation and security in the EU and is in full alignment with the European Council’s commitment to strengthening European security and defence.

Background information

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized enterprises (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment.

The Directorate-General for Defence Industry and Space (DEFIS) leads the European Commission’s activities in the Defence Industry and Space sector. In the area of Defence Industry, DG DEFIS is in charge of upholding the competitiveness and innovation of the European Defence industry. DG DEFIS implements and oversights the European Defence Fund.

The European Defence Fund (EDF) – implemented by the European Commission (DG DEFIS) – supports cooperative defence research and development projects. The fund aims to strengthen the competitiveness of the European defence industrial base. €8 billion from the EU budget is dedicated to the European Defence Fund for 2021-2027. As part of the EDF, the EU Defence Innovation Scheme (EUDIS) provides funding and support measures aiming to lower entry barriers into the defence domain for smaller or non-traditional market players and accompany innovators throughout the development cycle.

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for EU policy priorities like the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme has three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the projects of the implementing partners, increasing their risk-bearing capacity and thus mobilising at least €372 billion in additional investment.

Press contacts  

Serena Sertore, s.sertore@eib.org, tel.: +352 4379 70859
Website: www.eib.org/press — Media Office +352 4379 21000; press@eib.org

SOURCE: European Investment Fund