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Improving business cases to get finance
Published on 01 October 2018
Netherlands
Drenthe
This is the good practice's implementation level. It can be national, regional or local.
About this good practice
Many SMEs that are active in the sustainable energy sector are developing new products and services. Since the energy market is a complex market they often encounter problems in fine tuning their business case in such a way that it meets the requirements of financers.
In Utrecht there is a public energy fund (www.energiefondsutrecht.nl) which can provide risk capital for energy related SME’s and special purpose vehicles. The fund has problems financing initiatives because the quality of business cases is normally not up to standards. The Energy Investment readiness accelerator helps improve business cases.
The Energy Investment readiness accelerator is a flexible instrument. Process support is sometimes required and in other cases fiscal and legal optimization is necessary to make the business case investor ready.
After the initiators have set up a good business case with the aid of the energy development fund, this ‘energiefondsutrecht’ can help to get the financing completed. Especially the alignment of these publicly funded instruments seems to contribute to the success of the instrument.
To date around 20 initiatives have received funds from the Energy Investment readiness accelerator. Of those around half were able to attract finance for their initiative. In some case it can be shown that without the Energy Investment readiness accelerator the initiative would not have been funded.
In Utrecht there is a public energy fund (www.energiefondsutrecht.nl) which can provide risk capital for energy related SME’s and special purpose vehicles. The fund has problems financing initiatives because the quality of business cases is normally not up to standards. The Energy Investment readiness accelerator helps improve business cases.
The Energy Investment readiness accelerator is a flexible instrument. Process support is sometimes required and in other cases fiscal and legal optimization is necessary to make the business case investor ready.
After the initiators have set up a good business case with the aid of the energy development fund, this ‘energiefondsutrecht’ can help to get the financing completed. Especially the alignment of these publicly funded instruments seems to contribute to the success of the instrument.
To date around 20 initiatives have received funds from the Energy Investment readiness accelerator. Of those around half were able to attract finance for their initiative. In some case it can be shown that without the Energy Investment readiness accelerator the initiative would not have been funded.
Expert opinion
The practice represents an interesting support measure to increase the number of SMEs that are granted public risk capital. Improving the investment readiness not only helps the individual companies in their quest for funding, but also ensures that public money is invested in business cases with a better likelihood of success. The experience from the practice shows it can have real impact on the distribution of funding, hence reflecting its relevance as a tool to improve the business case quality. The potential for transfer is good, and the practice should be of interest to regional and national authorities concerned with SME access to funding as well as public investment in innovation.
Works at
Interreg Europe Policy Learning Platform
Resources needed
The last 6 years a total of €1.2 million was available for this instrument of which presently around € 400K remains.
Evidence of success
To date around 20 initiatives have received funds from the Energy Investment readiness accelerator. Of those around half were able to attract finance for their initiative. In some case it can be shown that without the Energy Investment readiness accelerator the initiative would not have been funded.
It is therefore safe to conclude that the Energy Investment readiness accelerator is successful and helps to improve investment readiness.
It is therefore safe to conclude that the Energy Investment readiness accelerator is successful and helps to improve investment readiness.
Potential for learning or transfer
In many regions there is an ecosystem that supports innovative companies and the creation of these companies. Knowledge institutions and TTO’s are involved and normally there is also a network of successful entrepreneurs that assist and help growing companies. However, access to finance remains complicated for many innovative companies. We have seen that is important not only to invest in the innovation ecosystem of the regions but we also need to invest in the investment readiness of the companies.
The Energy Investment readiness accelerator is easily replicated in other regions. Only real condition is that (public) funds are available. EIB instruments such as Elena are instruments that are designed for this purpose and can be interesting for regions to explore.
Another key success factor is a good selection procedure of initiatives that can be eligible for the Energy Investment readiness accelerator.
The Energy Investment readiness accelerator is easily replicated in other regions. Only real condition is that (public) funds are available. EIB instruments such as Elena are instruments that are designed for this purpose and can be interesting for regions to explore.
Another key success factor is a good selection procedure of initiatives that can be eligible for the Energy Investment readiness accelerator.
Further information
Website
Good practice owner
You can contact the good practice owner below for more detailed information.
Organisation
Province of Utrecht
Netherlands
Utrecht
Contact
manager financial instruments