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Financing R&D Activities in Ireland

Financing R&D Activities in Ireland

The European Investment Bank ("EIB") is a not-for-profit bank with the mission to provide financial support for the European Union's objectives. Owned by the EU Member States, EIB has a AAA rating, which enables it to borrow on the capital markets - and subsequently on-lend to eligible clients - at very attractive rates; typically EIB can offer at or even below Euribor or LIBOR base rates (plus customised credit risk margins) on a long-term basis without commitment or structuring fees.

 

Such advantageous funding is available to corporates (of investment or non-investment grade credit quality) or other entities that are active in one of EIB's policy areas.  With the establishment of the Lisbon Agenda in 2000, the European Union set itself the strategic goal of establishing a competitive, innovative and knowledge-based European economy, capable of sustainable economic growth with more and better jobs and greater social cohesion by 2010. Accordingly, financing European based R&D is a high priority for EIB.

 

EIB finances up to 75% of eligible R&D projects costing upwards of EUR 40m; to reach this target we aggregate a company's three-year R&D budget in Ireland and could also include spending in other European locations. In addition to supporting fixed asset components, such as construction of testing facilities or buildings dedicated to R&D, EIB will finance "intangible" R&D costs such as tests, materials, salaries, engineering, design, prototypes, and so on.  

 

R&D most obviously pertains to new ideas, but can also cover expenditures related to improvements in existing products, e.g. environmental, efficiency, safety and quality improvements, or new product development (e.g. next generation roll-out).  As EIB's objective is to foster R&D investment and human capital development, our financing is not contingent upon the commercial roll-out/success of these programmes.

 

EIB financing is flexible and offers attractive terms:

  • loans are available in all major currencies (e.g. EUR, GBP and USD);
  • floating base rates at sub-LIBOR (Euribor) levels plus customised credit risk-margins;
  • flexible disbursement schedule, up to 12 months after signing;
  • no facility fees (e.g. commitment or structuring fees) are charged;
  • long maturities (5-15 years) and bullet repayments are common.

 

You can find more information about EIB financed projects on our website: http://www.eib.org/ - or contact one of us directly at: d.straub@eib.org; r.schofied@eib.org. For venture capital projects see EIF's website: www.eif.org