Zagreb 3 March 2010 Gunnar B Mai This

Zagreb, 3 March 2010 Gunnar B. Mai This presentation was prepared by EIF. The information included in this presentation is based on figures available Any estimates and projections contained herein involve significant elements of subjective judgment and analysis, which may or may not be correct. CIP Workshop for January 2010

Table of Contents n Some Information about EIF n The CIP Programme n The venture capital instruments under CIP n The guarantee instruments under CIP 2 / 16

The Challenge: Financing Innovation amongst SMEs in Europe n SMEs account for a large proportion of activity Europe’s economic n Micro-businesses dominate employment in countries such as Italy (48%) and Greece (57%) n Successive EU summits put issues of growth, employment, innovation and competitiveness high on agenda n Support to SMEs: one of the top Source: Eurostat, Commission Communication on Modern SME policy for Growth and Employment six EIB Group priorities n EIF is the SME arm of the EIB Group 3 / 16 Importance of SMEs as the Foundation Stone for Tomorrow’s Prosperity

EIF at a Glance EU specialised institution for SMEs, risk financing Venture Capital and Mezzanine (fund of funds) Structuring and Guaranteeing portfolios of SME and microfinance loans/leases Authorised Capital € 3 bn EIB: 61% EU: 29 % Fin. institutions: 9 % To be issued: 1% AAA rated Staffing, Culture and Geographic Focus / Values Intermediaries Leading-edge modern institution EU 27, EFTA, Adapting to changing market conditions Candidate Countries Attracting talented staff Distributing through Banks High standards of compliance and integrity and Funds 4 / 16 Dual Objective of Meeting EU Policy Goals & Generating a Satisfactory Return on Equity

EIF’s Shareholders* n EIB: Main Shareholder (61%) n European Investment Bank’s shareholders: 27 EU Member States n Subscribed capital: € 165 bn n Total lending : € 350 bn n 2009 new lending € 79 bn , an increase of 37% n European Community represented by the European Commission (29%) n 30 public and private financial institutions from 17 countries 5 / 16 (9%) * 1% of EIF’s shares are still to be issued

Capacity - Guarantees Under EIF Management at 30/06/2009 €m EU Leveraged Portfolio Budgetary Resources EIF Own Resources Estimated Leveraged Portfolio EIF Exposure JEREMIE Leveraged Portfolio Budgetary Resources TOT Leveraged Portfolio Budgetary Resources/Exposure 6 / 16 30/06/2009 (outstanding) 9 300 550 Next 4 Years (new commitments) 7 300 450 23 800 3 400 10 500 1 500 N/A 4 200 700 33 100 3 950 22 000 2 650

Capacity – Venture Capital Under EIF Management at 30/06/2009 €m EU Leveraged Portfolio Net Commitment (outstanding) * EIB/EIF VC& Mezzanine Leveraged Portfolio Net Commitment * JEREMIE Leveraged Portfolio Net Commitment TOTAL Portfolio of Funds Net Commitment 7 / 16 Next 4 Years (new commitments) 2 400 400 20 700 3 100 9 000 1 800 N/A 1 500 300 23 100 3 500 12 900 2 500 * Does not include fund of funds and ERP initiatives

Table of Contents n Some Information about EIF n The CIP Programme n The venture capital instruments under CIP n The guarantee instruments under CIP 8 / 16

Competitiveness & Innovation Framework Programme (CIP) n CIP financial instruments managed by EIF on behalf of the EC n Purposes n Encourage the competitiveness of European enterprises n Support innovation and entrepreneurship activities n Provide better access to finance n Promote the increased use of renewable energies and energy efficiency n Products n Guarantees: SME Guarantee Facility n Venture capital: High Growth and Innovative SME Facility 9 / 16

Table of Contents n Some Information about EIF n The CIP Programme n The venture capital instruments under CIP n The guarantee instruments under CIP 10 / 16

CIP GIF Venture Capital Facility ■ Two windows ■ GIF 1: Seed & Start-Up Stage ■ GIF 2: Expansion Stage ■ Targeting >50% innovative SMEs ■ Eco-innovation & Business Angel aspects ■ Strong demand to date 11 / 16

GIF signed commitments: More than EUR 185 m in 17 funds 12 / 16

Competitiveness & Innovation Framework Programme (CIP) COUNTRIES COVERED BY CIP GIF 17 AGREEMENTS SIGNED for over EUR 185 m Inventure Fund Ky (ex Holtron ) Bullnet Fund II Cape Regione Siciliana Dritte SHS Technologie Gmb. H & Co. KG Demeter II Pinova Fund I Fountain Healthcare Partners Fund I Albuquerque FCR Chalmers Innovation Fund Pentech Fund II UMIP-MTI TTA Fund 360 Capital One Baltcap Private Equity Fund Capricorn Cleantech Fund Serena Capital WHEB Ventures Private Equity Fund II Countries covered by CIP i. e. GIF agreements signed Countries eligible for CIP where no GIF agreement has been signed to date Conor Technology Fund II 13 / 16 Other Countries

GIF sector focus: 17 funds, total fund sizes EUR 1, 18 bn 14 / 16

How to Apply n All information is published on EIF’s website n No formal application n Fundraising teams send documentation to EIF n Initial screening => second screening => due diligence Board and the EC for approval Proposal to EIF n Timing: case by case basis. Typically 12 to 18 months 15 / 16

Table of Contents n Some Information about EIF n The CIP Programme n The venture capital instruments under CIP n The guarantee instruments under CIP 16 / 16

CIP SME Guarantee Facility ■ Free of charge capped guarantees provided for additional risk-taking by intermediaries (guarantee schemes, banks, leasing companies…) resulting in Enhanced Access to Finance for SMEs ■ Enables lenders in the current economic environment to further support SMEs (tighter lending criteria to be relaxed) ■ Guarantees for investment loans and working ■ Selection of intermediaries with wide geographical cover in each country so that as many SMEs as possible have access ■ Minimum selection criteria (commitment to SME financing, financing volumes, geographical reach etc. ) 17 / 16 capital

CIP SME Guarantee Facility Instruments Four business lines, known as "windows“ ■ Loan Guarantee Coverage of portfolios of mid- to long-term debt finance targeting SMEs and focused on investment financing. Flagship window thanks to its flexibility and wide-ranging characteristics ■ Micro-Credit Guarantee Coverage of portfolios of micro-credits to encourage financial institutions to provide financing to microenterprises, especially start-ups ■ Equity Guarantee Coverage of portfolios of equity and mezzanine investments in SMEs in the seed and start-up phases. Aim to help SMEs improve their financial structure ■ Securitisation Guarantees to support securitisation 18 / 16 transactions so that financial institutions may

Competitiveness & Innovation Framework Programme (CIP) SME Guarantees COUNTRIES COVERED BY CIP GUARANTEES AGREEMENTS SIGNED 22 F. I. to date for over € 3. 5 bn (EUR 195 m of budget) Austria: Austria Wirtschaftsservice Belgium: Fd. P Bulgaria: BDB, Raiffeisenbank Bulgaria France: SOCAMA, ADIE, Siagi , Crédit Coopératif Germany: Kf. W Hungary: Uni. Credit Bank Ireland: First Step Microfinance Italy: Alleanza di Garanzia , ATI ITALIA PMI, Federfidi Lombarda , ATI Fidi. Gar. Latvia: Hipoteku Banka Norway: Cultura Sparebank Poland: BPH Slovenia: Slovene Enterprise Fund Spain: CERSA, Micro. Bank La Caixa Turkey: KGF Countries covered by CIP i. e. agreements signed Countries eligible for CIP Guarantees where no agreement has been signed to date 19 / 16 Other Countries

General Features (I) n Free of charge guarantee n Enhanced Access to finance Requirement that the Guarantee Facility covers risk that is additional to the one already taken by the intermediary n increases in lending volumes, loan maturities, rate of financing covered n waiver of collateral requirements n riskier target groups (start-ups, new areas of operation) the requirement is translated into specific and quantified obligations: target volumes n Guarantee conditional on achieving specific volumes n Special focus on eco-innovation, business transfers, etc. n Capped guarantees at a pre-agreed level taking into 20 / 16 account expected default and recovery rates, risk premium charged by the intermediary, requirements as to Enhanced Access to Finance

General Features (II) n Visibility SMEs have to be informed of the EC support n Promotion, Marketing n link to a dedicated CIP website n success stories of supported SMEs n State Aid rules are applicable to EU Guarantees (e. g. de minimis), except for the Securitisation Window (where guarantee fees are charged) n Quarterly and annual reporting requirements and monitoring n Commitment fee in case target volumes are not reached, applicable to all windows except Micro Credit Window 21 / 16

Window 1: Loan Guarantee ■ Purposes of financing: transfers, working ■ Minimum maturity: priority to minimum 18 ■ Borrowers: SMEs according to EU (less than 250 employees) ■ Guarantee Rate: ■ Ranking: ■ Guarantee maturity: up to 50% months definition years ■ Guarantee Cap Rate: expected ■ Free of charge guarantee 22 / 16 investment in tangible, intangible assets, business capital (loans, leasing) pari passu final maturity of up to 10 maximum 10%, based on loss

Window 1: Loan Guarantee - some examples (I) Successful implementation by banks n Germany start-up loan (up to EUR 50, 000) offered via the banking system at standardised conditions combined with a 80% risk coverage n Bulgaria SME secured loan product with reduced collateral requirements, increased maturities and reduced cost of financing n Poland relaxed lending criteria for two existing loan products and launch of a new loan product in times of restrictive lending policies n Latvia new development loan product dedicated to start-ups and young, small companies 23 / 16

Window 1: Loan Guarantee - some examples (II) Successful implementation by guarantee schemes n Italy increased guarantee rates and guaranteed maximum loan volumes as well as additional industry sectors n Spain increased counter-guarantee rates and strengthened focus on providing coverage to long -term SME loans n France increased volumes of guarantees for small equipment loans and business transfer loans, granted with substantially reduced collateral requirements 24 / 16

Window 2: Micro-Credit Guarantee ■ Purposes of financing: ■ Minimum maturity: investments, working capital ■ Maximum amount: ■ Borrowers: EUR 25, 000 ■ Guarantee Rate: ■ Guarantee maturity: up to 75% ■ Guarantee Cap Rate: maximum 20% based on loss ■ Technical support: EUR 200 per borrower (up to maximum EUR 50, 000) months to EU employees) years expected financed 25 / 16 ■ Free of charge guarantee priority to minimum 12 at least 6 months micro enterprises according definition (less than 10 final maturity of up to 5

Window 2: Micro-Credit Guarantee Successful implementation by banks and MFIs n Spain substantially increased lending volumes to micro enterprises n Norway substantially increased micro-lending volumes that would otherwise be constrained due to the small size of the lender n Ireland substantially increased lending volumes and higher risks accepted 26 / 16

Window 3: Equity/Quasi-Equity Guarantee ■ Purpose of financing: mezzanine finance, quasi equity ■ Maximum amount: ■ Borrowers: EUR 500, 000 (equity) equity or start-up phase, or years ■ Guarantee Rate: ■ Guarantee maturity: up to 50% ■ Guarantee Cap Rate: maximum 20%, based on loss years expected ■ Free of charge guarantee 27 / 16 SMEs according to EU definition, in seed or operating for less than 10 final maturity of up to 10

Window 4: Securitisation ■ New under the SME Guarantee Facility ■ Securitisation of SME loan portfolios: ■ cover for mezzanine and junior tranches ■ co-investment with EIF own resources may be considered ■ focus on smaller banks, new markets, multi-country and multi originator transactions ■ support to cover some costs under discussion ■ Cash / synthetic transactions ■ Guarantee rate: up to 100% of guaranteed tranche, ■ ■ ■ 28 / 16 ■ max 50% for First Loss Piece Term: up to 10 years Guarantee fees will be charged Enhanced access to finance: Undertaking to use resources to provide new loans to SMEs according to EU definition EU Requirements apply to the newly created (additional) portfolio (reporting, visibility, audit

How to apply and application process n All information is published on EIF’s website: www. eif. org Product description and policy, selection criteria, information requirements n Application process: n Applications in line with the requirements can be preselected n Requirement of further information if necessary n Due diligence meeting n Proposal to EIF Board and the EC for approval n Agreement implementation n Timing: between 3 - 6 months (depending on the 29 / 16 quality of information provided)

Contact details n CIP coordinator: Gunnar MAI g. mai@eif. org +352 426688 358 n European Investment Fund 96, boulevard Konrad Adenauer L-2968 Luxembourg cip. guarantees@eif. org 30 / 16