At META, we recently carried out an analysis of the private and public financial instruments that are available for the innovative bioeconomy or the bio-based industry.
Bioeconomy challenge
Developing the bioeconomy is one of Europe’s responses to the key environmental challenges that the world is facing today. A thriving bioeconomy would reduce dependence on natural resources, transform manufacturing, promote the sustainable production of renewable resources from land, fisheries and aquaculture and their conversion into food, feed, fibre, bio-based products and bio-energy, while growing new jobs and industries.
META Group’s participation
META Group is a partner of Power4Bio, an EU-funded initiative empowering regional stakeholders to boost the transition towards the bioeconomy in European regions by providing them with tools, instruments and guidance to develop sustainable bioeconomy strategies.
Our role within this programme is to identify private and public financial instruments for innovative bio-based solutions and provide bioeconomy regions with recommendations and guidelines on how effectively design and access to properly develop their bioeconomy industry.
We’ve analysed successful practices from Europe and abroad, including countries such as Canada, the US, China and Malaysia.
Thanks to this research, we can provide national and regional authorities with a full spectrum of financial solutions that can help them in better supporting their rural economies and the switch to the circular economy.
In a sector such as the bioeconomy, start-ups are one of the driving forces; high-growth firms can power regional economic development and the availability of funding for those companies depends heavily on their stage of development.
That’s why we have put a particular emphasis on equity. This is considered as it’s one form of finance that is more appropriate for the early development stages of innovative enterprises.
We firmly believe that equity financial instruments co-financed with public resources can be a powerful catalyst for the creation and development of venture capital ecosystems in Europe.
Some successful practices
Here some of the best practices we found:
Ag-West Bio’s Technology Commercialisation Investment Fund – CANADA
Launched in 1989 by Saskatchewan’s Ministry of Agriculture. Since then, Ag-West Bio has been working to support commercialisation of bioscience technologies in the areas of sustainable crop production, food processing, health, environment, biofuels and bioproducts. West Bio can provide early-stage capital and help secure matching funds for qualified start-ups, or for expanding bioscience companies through a matching fund: Ag-West Bio’s Technology Commercialisation Investment Fund.
Hauts de France CAP 3RI – FRANCE
The investment fund rev3 (CAP 3RI) brings together public and private, French and European financial players (European Regional Development Fund, European Investment Bank, Groupama North East and Crédit Agricole Nord de France).
The aim is to finance companies whose projects are linked to the priorities of the Third Industrial Revolution (renewable energy, energy management, smart mobility, energy efficiency, circular economy). This investment fund intervenes in equity and quasi-equity in the companies located in Hauts-de-France.
ECBF – European Circular Bioeconomy Fund – EUROPE
ECBF is the first venture fund exclusively focused on investing in circular and bio-based industries – in the EU and the 16 HORIZON 2020-associated countries.
The aim of this programme is to support innovative circular bioeconomy companies and projects in order to fill the funding gaps. For that the aim is to attract private investments that bring bio-based innovations closer to the market. In addition, help the EU reach its environmental, climate and biodiversity targets in line with the UN Sustainable Development Goals. This investment is backed by a guarantee from InnovFin.
ECBF started operations in October 2020 and the first two investments in two innovative growth-stage companies have already been closed.
Agriculture and Bioeconomy Programme Loan – EUROPE
This financing initiative is managed by the European Investment Bank and targets investments by private cooperatives and companies in the agriculture and bioeconomy sector and finance future capital expenditures and RDI programmes.
This loan is available to smaller agri-cooperatives with fewer than 3000 direct employees, innovative small businesses and mid-cap companies, involved in the primary production sector (animal and crop production, forestry, fisheries and aquaculture) or in up/downstream manufacturing (such as forest, paper and pulp industries, bioenergy production, resource protection, food retail/ wholesale, etc.).
The EAFRD Fund of Funds – ROMANIA
The EAFRD Fund-of-Funds (EAFRD FoF) is a funding agreement signed between the EIF and the Government of Romania, represented by the Ministry of Agriculture and Rural Development. It is financed by the European Agricultural Fund for Rural Development (EAFRD), through the National Rural Development Programme 2014-2020, together with resources from the national budget.
The objective of the Fund of Funds is to address specific market failure by facilitating access to finance to final recipients. All this is in cooperation with selected financial intermediaries active on the Romanian market, through the implementation of a portfolio risk-sharing loan.