Debt funding for demonstration phase projects or companies?

Time and again commercial banks aren’t funding companies or projects aiming to build demonstration facilities. This can be, for example, due to a technology risk or that the in and off-take agreements are not solid enough.

Demonstration facilities typically require large investments, and it is troublesome to finance them only with equity for multiple reasons.
To cover this "Valley of Death", European Investment Bank provides loans for commercial demonstration in their key segments as listed below.

• Decarbonisation of heavy industry

• Energy

• Transportation

• Circular & bioeconomy

Key terms & usage

• The minimum ticket size for a corporate loan or project finance with EIB is 7.5 M€

• EIB financing can go up to 50 % of the total project costs incurred over a 3–4-year horizon

• The proposed project(s) can consist of

• A single project

• A series of projects (e.g., 2-3 manufacturing plants)
  

• Eligible project costs are typically limited to CAPEX costs

  • Other costs (OPEX, sales, marketing) can occasionally be included when they are required for successful demonstration

  • The EIB expects sufficient equity to be in place (as a minimum of 25 % should be considered)
    
    

If you have any questions on the above topic or would like to discuss financing your company or portfolio company in any other way, please feel free to contact our experts. You can find our team's contact details here.

You can also follow us on LinkedIn and Twitter.