Presentation on theme: "Exporting a proven model: Innovation Financing A presentation by KfW Development Bank Knowledge Economy Forum IX, May 5, 2010 Roland Siller First Vice."— Presentation transcript:
Exporting a proven model: Innovation Financing A presentation by KfW Development Bank Knowledge Economy Forum IX, May 5, 2010 Roland Siller First Vice President Europe and Caucasus KfW Development Bank
60 Years of KfW Financing with a Public Mission Promotional bank of the Federal Republic of Germany Founded in 1948 as public law institution Kreditanstalt für Wiederaufbau (KfW) Shareholders: 80% Federal Republic, 20% federal states Headquarters: Frankfurt am Main Branches: Berlin and Bonn Balance sheet (2009): EUR 400 billion Representative offices: about 60 offices and representations worldwide No of employees: 4,265 Best rating: AAA/Aaa/AAA Balance sheet total vs promotional banks EUR in billions (2008) Balance sheet total vs commercial banks EUR in billions (2008)
33 A Bank with a Wide Array of Roles and Functions Domestic promotional business Promotion of housing, education, infrastructure and social development Promotion of SMEs, entrepreneurs, environmental and climate protection business start-ups Financing of municipal infrastructure projects and promotion in Europe Promotion of developing and transition countries International project and export finance Innovation Finance as an integral part of KfW Mittelstandsbank
2) Instruments 1) Concept Approach and Volume of Innovation Financing in Germany Role of KfW Mittelstandsbank Senior Loan Programmes Venture Capital Programmes (Equity) Subordinated Loan Programmes (Mezzanine) Promotion of Start-ups Promotion of emerging, growing and established companies Financing of Innovations KfW Commercial bank, venture capital or private equity company Commercial bank, venture capital or private equity company Entrepreneur Application Financing agreement Refinancing, equity 3) Volumes
Adaptation of KfW Innovation Finance Programmes to the Russian Federation Status quo in the Russian Federation: Innovation definition focuses on hi-tech and global innovation concepts Existing promotion programmes follow that approach (hardly bankable), no SME focus Aims of corporation between Vnesheconombank and KfW Development Bank: Fostering innovation on SME level Strengthening the Russian banking sector in terms of know-how and programmes Implementing a 100 mln EUR programme for Russian banks to be onlent to SME Approach of KfW Development Bank: Adaptation of existing programmes to Russia; utilization of experiences in Germany Support in the development and anchorage of a broader innovation definition including innovative modernisation (high demand potential in Russia; bankable products possible) Establishment of cooperation with development institutions like Vnesheconombank and RosBR On-lending via eligible partner banks for risk sharing and faster market penetration (KfW-Model) Focus on SME as a sector with the most promissing growth potential Step by step approach: loan based programme followed by equity and mezzanine programmes !! Sustainable success of the programme more important than quick wins !!
Overview: Financial and Private Sector Development Europe&Caucasus Activities and Portfolio Instruments Senior loans Subordinated loans Equity participations Risk participations, guarantees Technical assistance Activities Countries Financing / Refinancing of SME and Microbanks in the regions Greenfielding of 13 banks Establishment of best practice structured finance projects such like the EFSE - (European Fund for South East Europe; biggest microfinance fund worldwide: >700 mln EUR in assets;<600 mln EUR loan portfolio); clients, loans disbursed - benchmark for public-private partnership projects Southeast Europe: Serbia, Montenegro, Kosovo, Bosnia & Herzegovina, Albania EU Accession Countries: Croatia, Macedonia, Turkey, Bulgaria (EU), Romania (EU) Eastern Europe: Russia, Ukraine, Moldova Caucasus: Georgia, Armenia, Azerbaidschan Portfolio 5 billion EUR (as of April 2010) - of which 2,4 billion EUR are channelled through the financial sector (mainly for SME promotion purposes)
Leverage of funds: EFSE pursues a Tiered Funding Strategy Donor Funds International Finance Institutions Private Investors A-Shares and Notes B-Shares C-Shares Dec 05 Dec 09 Target 2011 Fund Volume in EUR million EFSE – Innovative Structure Adaptation of Fund Structure for advanced Innovation Finance (Mezzanine, Equity)