FP7 Risk Sharing Finance Facility (RSFF)

The Risk Sharing Finance Facility (RSFF) was a groundbreaking initiative launched under the European Union’s Seventh Framework Programme for Research and Technological Development (FP7), spanning from 2007 to 2013. Its core objective was to stimulate investment in research, development, and innovation (RDI) by sharing the financial risks associated with these activities. The RSFF aimed to bridge the gap between research and market application, fostering economic growth and competitiveness within Europe.

At its heart, the RSFF operated as a mechanism for providing loans and guarantees to companies and other organizations undertaking RDI projects. It achieved this through collaboration with the European Investment Bank (EIB) and other financial institutions. The EU contributed funds to a risk-sharing instrument, which allowed the EIB to offer larger loans and at more favorable terms than would otherwise be possible, thus mitigating the perceived risk for lenders.

The RSFF was designed to target a broad spectrum of RDI activities, encompassing various technological fields and sectors. It particularly encouraged investment in projects considered high-risk but with high potential for significant economic and social impact. This included projects focused on emerging technologies, sustainable development, and addressing societal challenges outlined in the FP7 program.

The beneficiaries of the RSFF were diverse, ranging from large corporations and small and medium-sized enterprises (SMEs) to universities and research institutions. A key advantage of the RSFF was its ability to provide access to finance for projects that might have struggled to secure funding from traditional sources due to their perceived risk profile. This was particularly beneficial for SMEs, who often face greater challenges in accessing capital.

The impact of the RSFF was substantial. It played a crucial role in leveraging private investment in RDI, stimulating innovation, and creating new jobs. By sharing the risk associated with these investments, the RSFF encouraged companies to undertake more ambitious projects, accelerating the pace of technological advancement. Independent evaluations of the RSFF have consistently highlighted its effectiveness in achieving its objectives and contributing to the overall goals of the FP7 program.

While the FP7 program has concluded, the RSFF’s legacy continues to influence subsequent EU research and innovation funding programs, such as Horizon 2020 and Horizon Europe. The lessons learned from the RSFF have informed the design of new financial instruments and risk-sharing mechanisms aimed at promoting innovation and addressing critical societal challenges. The concept of risk sharing remains a central tenet of EU innovation policy, acknowledging the importance of de-risking investments in order to unlock the full potential of European RDI.