EIB Group powers up flagship investment instruments to boost Europe’s tech leadership and defence capabilities

This article is published in association with European Investment Bank.

• Expanded European Tech Champions Initiative offers growth finance for European innovators and new platform for private sector participation.
• Powered up Defence Equity Facility to nurture Europe’s security and defence venture capital ecosystem.
• EIB and EIF Boards also endorse €11.4 billion for competitiveness, housing, energy security and affordability and EU space sector.

The Boards of Directors of the European Investment Bank (EIB) Group endorsed the scaling up of successful financing instruments to strengthen Europe’s technological leadership and defence capabilities.

The significant expansion of the successful European Tech Champions Initiative (ETCI) will crowd in institutional investors, in addition to public resources from Member States. Managed by the European Investment Fund (EIF), the ETCI is the biggest fund-of-funds in Europe fully dedicated to scaling up innovative European companies to compete globally. It has already invested into 14 mega-funds of over €1 billion and anchored the creation of 11 European unicorns.

A dedicated ETCI platform will be launched in the second quarter of this year, where investors such as insurance companies, pension funds, commercial banks, asset managers, foundations and national promotional institutions will be able to indicate earmarked commitments. Pledges target toward €15 billion over the lifetime of the initiative, with the aim to mobilise €80 billion in investments.

The expansion will decisively narrow the funding gap for European innovators and bolster the EU`s autonomy in strategic sectors such as artificial intelligence, biotech, cleantech and defence.

The time for Europe’s capital markets union is now, and the EIB Group responds to EU leaders’ call for action with pan-European instruments to boost European competitiveness ”

– EIB Group President, Nadia Calviño

“Turning savings into investment and leading the technologies of tomorrow are central to Europe’s sovereignty.”  The EIB Group Boards also supported plans to expand its Defence Equity Facility (DEF), through which the EIF acts as anchor investor mobilising capital into specialised funds in the areas of security and defence.

Following the full allocation of the Facility’s initial €175 million budget, the pan-European defence and cybersecurity fund-of-funds has an initial target size of €1 billion to support companies across the security and defence, space and cybersecurity value chain—from early-stage innovation to growth, scale-ups, and relevant infrastructure. The Facility has already helped nurture a European investment community focused on security and defence and its expansion is projected to support up to 20 new funds.

Savings and Investment Union

The actions are key pillars of the EIB Group’s bottom-up contribution to the Savings and Investments Union, complementing regulatory initiatives, such as the EU Inc. regime proposed by the European Commission.

Over the next months, the EIB Group plans to roll out a full toolbox to help venture funds and founders divest, including acquisition finance, the introduction of new convertible instruments and targeted support for listings on European stock markets, and is also exploring a more active management of its equity portfolio to help deepen Europe’s secondary markets.

Energy Security and Affordability

The EIB Group’s Boards also approved a total of €11.4 billion in new financing for projects to strengthen Europe’s competitiveness, energy security and affordability and reinforce global partnerships.

The Board of the EIB approved new financing for housing in Portugal and Spain, renewable energy projects in France, Ireland and Spain, energy efficiency improvements in the Netherlands, sustainable transport in Finland and Romania, water infrastructure in the Czech Republic and business competitiveness in Estonia, Latvia and Lithuania.

Approvals also include a €500 million lending envelope for small and medium-sized enterprises and Mid-Caps in the EU space sector. The initiative will provide liquidity and guarantees to EU banks and works in partnership with the European Space Agency to deliver technical advice, encouraging banks to scale up lending to this strategic industry. The new step comes under the EIB Group’s TechEU programme and complements its support for the sector through equity, venture debt and direct financing.

For its part, the EIF endorsed new investments to strengthen Europe’s energy security and healthcare innovation, including support for funds dedicated to renewable energy and sustainable transport infrastructure, an early-stage cleantech fund and a synthetic securitisation to unlock fresh lending for clean energy projects.

Support for medtech and healthcare was also expanded through two technology transfer funds, a venture capital fund and a private equity fund. In total, the EIF approved 14 TechEU operations that will broaden financing for European innovators through guarantees, securitisation, infrastructure, venture‑capital and private equity instruments.

Beyond the EU, the EIB backed projects covering the upgrading and expansion of telecommunications networks across Africa, the development of new hospitals and medical equipment in Montenegro and business investments in countries that are part of the EU’s “Enlargement and Neighbourhood” region. These initiatives contribute to the EU’s “Global Gateway” strategy of promoting win-win partnerships and a strong European voice globally.