EIF in France: going from strength to strength
It’s been 26 years since the EIF signed its first transaction in France. Over this period, our collaboration with local partners has grown increasingly strong as together we have helped create an environment where French SMEs can thrive and strengthen their position on the national, European and global marketplaces. We have focussed on breaking the barriers to innovation, competitiveness and growth ensuring that funding resources, from bank lending, equity investments to alternative finance, are made available, sending thousands of French entrepreneurs facing difficulties accessing capital, on a growth trajectory. More recently, the EIF together with the EC, the EIB, financial institutions, national and regional partners, has concentrated its efforts on engaging large amounts of financing to kick-start the economic recovery, and work towards shared priorities such as digitalisation and the green transition, ensuring businesses across France are more sustainable and ready for their digital future.
Building on Innovation
France has a long history of inventors and discoverers. Innovation is an important ingredient of its success. In fact, today France prides itself on being the start-up nation, building on the successes of the so-called “la French tech”, and ecosystem which gathers all the actors of the French technology scene promoting innovative French businesses around the globe, or the “Tibi initiative” a scheme focussing on technology companies growth. None of these innovative entrepreneurs can scale-up and thrive without a financing ecosystem that supports them. The EIF has long channelled resources into innovation supporting companies active in advanced sectors such as AI and the space industry, but also in life sciences. Recently for instance, the EIF invested EUR 100m in Jeito, a female-led fund that addresses the entire funding spectrum of therapeutic companies, from pre-clinical stage up to and after IPO. The transaction will help address the long hard road to fundraising faced by many biotech entrepreneurs. Meanwhile for those entrepreneurs keen to accelerate their digital transformation, an agreement with Bpifrance under the EC COSME programme provided affordable financing to small French companies, allowing them to increase their digital footprint.
Putting the spotlight on agriculture
Over 50% of France’s territory is dedicated to agriculture, making it the largest utilised agricultural area of the EU. Agriculture and its related industries contribute hugely to France’s economic prosperity but also to achieving its environmental sustainability goals. Commitment by the different stakeholders of the sector to the green transition is key and investment supporting innovative environment-friendly solutions have an important role in delivering on these goals. The EIF's contribution across the agricultural value chain has been significant. A EUR 30m investment in Sofinnova Industrial Biotech II particularly illustrates EIF’s role in achieving the sector’s green goals. The early stage environmental impact fund invests in companies leveraging biotechnology to develop sustainable solutions across the food, agriculture, chemical and materials sectors, proving that biotech can provide successful and sustainable solutions to agriculture. Recently, a partnership with the French government under Initiative Nationale pour l’Agriculture Française (INAF), has helped for more than 5 500 farmers, many of them young or new to the profession, through guaranteed loans at preferential conditions representing more than EUR 800m, ensuring generational continuity and perennation of the sector. In the current context where supporting the agricultural sector is a key priority, the EIF has also implemented regional initiatives specifically dedicated to address the market gap in that sector under FOSTER in Region Occitanie or Alter’NA in Region Nouvelle Aquitaine.
Supporting regions
France’s regions play an important role in the running of the state. Their competencies and influence can be felt at many levels of the political and social spheres and they are considered central to the country’s economic growth. They are particularly important actors of companies’ creation and development as they often are the best placed for hands-on assistance and guidance in many aspects from establishment, to financing, to accompanying their digital and green transitions or encouraging innovation and the development of new technologies. Regions matter to the EIF. Over the last decade, we have built close partnerships with the Occitanie, Nouvelle Aquitaine, La Réunion, Grand Est regions, with a collaboration with the Bourgogne Franche Comté region soon to be sealed. Through these cooperative regional activities, we have been able to design tailor-made financing solutions that target traditional as well new sectors. In the Grand Est region, for instance, the EIF is managing a EUR 60m Prêt Participatif instrument launched in 2021 to support the key priority of the regional flagship COVID-19 recovery programme while also strongly contributing to SMEs’ competitiveness and growth of the territory.
Ensuring a sustainable future
Climate change is the defining challenge of our generation, as decisions we take today will have a lasting impact on future generations. France has set itself ambitious climate targets pledging to implement the European Green Deal to achieve net zero by 2050. The EIF supports French and European entrepreneurs that create transformative and innovative green solutions, and accompanies traditional businesses as they seek to navigate the green transition.
In particular, the EIF has committed EUR 20m in MiiMOSA Transition #1, the first senior private credit fund lending to SMEs in the agri-food sector and actively contributing to the implementation of the UN SDGs and the green transition for of small businesses operating in the French agro-economy. We invested EUR 40m in TiLT Capital Fund 1, an energy-transition fund focussing on investments related to energy efficiency, production, management and consumption, and, in the field of sustainable urban regeneration, we committed EUR 30m in Ginkgo 3, a fund dedicated to the decontamination and redevelopment of contaminated land plots in Europe. Furthermore, a commitment of EUR 50m under EFSI Private Credit in Eurazeo Sustainable Maritime Infrastructure will help finance the transition of maritime assets to a low carbon maritime economy.
Working for an equitable society
In our modern knowledge-based world, human capital is the most valuable asset for long-term economic growth and prosperity. Enhancing people’s potential requires bold measures and timely investment to remove barriers and inequalities. The EIF develops instruments that channel resources towards creating a fairer, more just society, supporting businesses that create sustainable positive impact and place social value creation at the centre of their strategy. In France, we have backed initiatives that target major societal challenges and deployed innovative investment forms, such as social impact bonds. In this context, we have invested EUR 3.3m of EFSI resources in the Alternative à l’incarcération par le Logement et le Suivi intensif (AiLSi) programme sponsored by Médecins du Monde that offers homeless people with psychiatric disorders an alternative to jail in an effort to break the revolving cycle of “street-prison-hospital”. AiLSi exemplifies the role of social outcome contracts, where investors frontload financing for a social intervention through innovative and preventive projects, while public budgets contribute only if the social impact targets defined in the contract are met.
