General
—19 april 2021
April 19, 2021
3 minutes
Invest-NL advises Nationaal Groeifonds on additionality risk
Nationaal Groeifonds (“Groeifonds”) was founded to invest in projects that propel economic growth in the long run. Groeifonds can only provide financing where no other form of private or public funding is available. For the purpose of assessing this condition of additionality, Groeifonds’ independent advisory committee asked Invest-NL to analyse the risk that Groeifonds’ subsidising will crowd out other forms of financing in respect of seven applications.
As the Netherlands’ pre-eminent impact investor, Invest-NL has a clear view of the funding of sustainable growth and innovation. We also always assess whether a different form of financing is possible when selecting our own projects. The seven applications were examined by our own experts at Invest-NL.
Remco van Montfoort, business development manager at Invest-NL: “The assessment advisory committee used our report, along with the findings of other experts, to formulate its final recommendation to the Dutch Cabinet. These reports helped inform the Cabinet’s decision to make an investment of € 646 million and a reservation of € 3.5 billion for ten projects, out of approximately € 25 billion in applications received in this first round. A particular point of focus in this assessment was which elements of the applications would genuinely contribute to future earning capacity without there being any other forms of financing available.”
Michiel Strijland, business development manager at Invest-NL: “We performed extensive analyses of five R&D&I applications (Foodswitch, Groenvermogen, Health RI/Regmed, AINed, QDelta) and made supporting analyses of two infrastructure applications (Brainportlijn, Buisleidingen).”
Koen van Breugel, business development manager at Invest-NL: “In essence, we concluded that there are substantial additionality risks. Still, that does not mean that the investment applications have no merit. We only mapped out the risks of additionality based on the information currently available and have made suggestions on how to reduce these risks.”
Why Invest-NL cannot make these investments itself
Groeifonds is intended for the phase where there is still much need for investment in R&D and there is no prospect of earning potential yet (and subsidies are therefore necessary). Economic growth is one of the key goals. Projects handled by Invest-NL are of a highly innovative nature and often still need to go through a final development phase, but do already offer prospects of positive earning potential. Invest-NL participates in companies and projects in order to make innovative investment propositions more attractive to market players looking to invest. This is where Invest-NL’s revolving financing comes into play. Our involvement at this early stage helps these phases link up. By working together we ensure that knowledge and ideas actually lead to new companies and future projects, while minimizing reliance on the public purse. In this way we also aim to enable the financing of these innovative fields going forward.
