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European finance collaboration to boost bloc space sector with €200m finance

Stephen Kuper
European finance collaboration to boost bloc space sector with €200m finance

The European Commission is partnering with the European Investment Bank Group, announcing €200 million of investments into the EU space sector to support ground-breaking innovation in the industry.

During the European Space Policy Conference in Brussels, EIB vice-president Ambroise Fayolle has signed an agreement with André-Hubert Roussel, CEO of ArianeGroup, confirming a 100 million ($161.8 million) loan for the new Ariane 6 launcher program.

The deal is backed by the European Fund for Strategic Investments, the financial pillar of the Investment Plan for Europe, and InnovFin Risk Sharing for Corporate Research backed by Horizon 2020, the EU Framework Programme for Research and Innovation.

In addition, the commission and the EIF have jointly announced the first ever EU-backed InnovFin Space Equity Pilot and the first space-focused tech fund supported under the pilot in Europe.


Ariane 6 

Ariane 6 is the new European heavy launcher developed in the framework of a large European Space Agency (ESA) multi-annual programme for a new European family of space launchers to respond to the latest trends in the satellite market while significantly lowering production costs.

The new generation heavy-launcher maintains the EU’s independent access to space, aligned with the ambition to develop crucial knowledge for the European space industry.

EU Commissioner for Internal Market, Thierry Breton, said, "The two announcements of today represent a game changer for Europe in the support of the European space industry. First, I strongly welcome the loan granted by the EIB for the Ariane 6 project, which is at the core of the objective to guarantee a European autonomous access to space."


Ariane 6 will continue to enable Europe to deliver its launch activities for missions to all orbits, from geostationary satellites to medium- and low-Earth orbit missions and address market dynamics for large satellites, satellite constellations and the smaller satellite segment.

André Hubert Roussel, CEO of ArianeGroup, reinforced these comments, stating, "This 100 million loan will partly finance ArianeGroup investments in Ariane 6 development, meaning more competitive, environmentally friendly industrial facilities in Germany and France, including French Guiana."

The 100 million financing will partially support ArianeGroup’s share of development costs through an innovative financing structure, which will be contingent on Ariane 6’s commercial success, once operational.

"Through this innovative financing, EIB, with the support of the European Union through the European Fund for Strategic Investment, and InnovFin Risk Sharing for Corporate Research, contributes to our industrial investments in our new competitive, versatile and modular Ariane 6 launcher," Roussel added. 

Supporting European SMEs 

The InnovFin Space Equity Pilot is a 100 million program under InnovFin specifically dedicated to support the innovation and growth of European SMEs operating in the sector of space technologies.

The program will invest in venture capital funds across the EU that support companies commercialising new products and services in the space sector.

Primo Space, an Italian early-stage tech investor, is the first fund selected by the EIF under this pilot. With a target size of 80 million ($129.5 million), it will be among the first tech transfer funds only focused on space-related technologies in Europe and the first one in Italy.

It will invest at proof-of-concept, seed and other early stages projects or companies and will foster the commercialisation of breakthrough innovations in the space technologies in Italy and Europe.

The European space economy is already valued 50 billion (as of 2019) ($80.9 billion) and the research in aerospace technologies is one of the priority areas covered by the Industrial Leadership and Societal Challenges of Horizon 2020.

"Second, with the InnovFin Space, we are sending a clear signal that space business in Europe is an attractive opportunity. This is a crucial initiative to support the development of European space start-ups so they can scale up," Breton added. 

The announcements follow recent new ventures for the EIB Group with key players in the space sector.

Last year, the EIB and the European Global Navigation Satellite Systems Agency (GSA) signed an agreement to co-operate on supporting investment in the European space-based service economy.

The common objective was to create high-skill jobs in the EU and improve the day-to-day lives of Europeans by supporting innovative companies and accelerating the development of new applications that use European global navigation satellite systems and Earth observation data.

Fayolle said, "Initiatives like EFSI or InnovFin help us to develop relevant financing solutions for the European space industry. They allow us to provide debt financing for a large multiannual program to develop a new family of European space launchers by ArianeGroup with improved technical flexibility and modularity to respond to the latest trends in the satellite market."

According to a recent EIB and European Commission study on the future of the European space sector, European space entrepreneurs feel there is a lack of private financing sources. They therefore tend to turn to private capital outside the EU, especially in the US.

This was reinforced by EIF chief executive Alain Godard, who said, "Space is an important driver of innovation in Europe. The investments in the space sector we signed today show how public funds in the EU can be deployed to attract private investment and catalyse the development of the sector."

A new EU space program to start in 2021 foresees dedicated measures and additional funding to support an innovative and competitive EU space sector, including to boost entrepreneurship from early stage to scaling-up.

The EU space programme regulation is currently under negotiation by the European Parliament and Council of the EU.

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