Innovative Transport Financing Presentation: EIB's Key Objectives & Trends

1. Innovative Transport Financingpresentation @ INRIA industry days, November 2018 Dr. Stéphane PETTI Transport Technology & Innovation Project Directorate/MOBILITY INRIA Industry days2018 @ Paris

2. EIB: Public policy bank The EIB is the European Union's bank • As a public policy institution, the EIB supports projects that make a significant contribution to growth and employment in Europe. Our activities focus on four priority areas (Public Policy Goals): • Innovation and skills • Access to finance for smaller businesses • Infrastructure • Climate and environment • As a bank, the EIB raises the money it lends on the international capital markets through bond issues. • The EIB is self-sustaining, • It makes its own lending and borrowing decisions and takes risks in lending, so allthe projects to be financed must be bankable. INRIA Industry days 2018 @ Paris

3. What do we do in Transport sector? European Union EUR70.24bn Transport EUR10.6bn Out of Total EUR 78.16bn EU Operations signed in 2016 Note: The data is the property of the EIB. For reproduction, prior permission from the EIB is required. • Recent EIB lending (signed operations) some EUR 70bn per year. • On average, transport projects have constituted some 15%-20% of total lending. INRIA Industry days 2018 @ Paris

4. EIB project assessment INRIA Industry days 2018 @ Paris

5. Population growth Urbanisation Prominent use of private cars Passenger and freight demand is on the rise Mobility demographic and societal trends “from 7 to 9 billions by 2050” “2/3 of the population by 2030” INRIA Industry days 2018 @ Paris

6. Road fatalities INRIA Industry days 2018 @ Paris

7. Air pollution INRIA Industry days 2018 @ Paris

8. Transport is Europe’s biggest climate problem Business As Usual (BAU) GHG emission trend for Transport All transport modes GHG emissions in EU Network optimisation Technologyimprovement Energy industries Alternative fuels Agriculture Industry EU 2050 Objective (60% less transport GHG emissions v. 1990) 2030 2050 Transport GHG emissions: comparison and evolutionsince 1990

9. Surface use of vehicles INRIA Industry days 2018 @ Paris

10. Safety, injuries and fatalities Air pollution CO2 emissions and climate change Surface use EIB Transport financing key objectives Contribute to EU convergence and cohesion Mitigate transport negative impacts and externalities “25,000 road fatalities in EU per year, not inline with 2020 target” “400,000 premature death in EU” “25% of EU CO2 emissions and still increasing” “up to 50% in most large cities downtowns” •  EIB Transport Lending Policy • Trans European Transport Network and less developed regions • Sustainable Transport • Breakthrough technologies and innovative projects across all technologies INRIA Industry days 2018 @ Paris

11. Cleaner technology Electrification (battery, catainers, etc.) Hydrogen and fuel cells Low carbon fuels (synthetic or bio) New material and design (lighter, better aerodynamic) Digital and connectivity and behavior change Car sharing On demand car hailing Single payment and ticketing Mobility as a Service ITS, C-ITS, SESAR, ERTMS Automation Autonomous vehicles and shuttles Robot taxi Truck platooning New technologies and innovation for a sustainable transport INRIA Industry days 2018 @ Paris

12. Demand uptake uncertainty Upfront costs and scalability Competitive edge New technologies impact on financing Technology risks • Technology Readiness Level, standards and interoperability • Technology cost drivers and outlook • Life cycle consideration (production, recycling, energy and resource requirement, etc.) Market risks Business risks • Total Costs of Ownership • Business models • New value chain and stakeholders Other risks (legal, social, environmental, security, etc.) INRIA Industry days 2018 @ Paris

13. (1) Technology cost drivers (Source: BNEF) INRIA Industry days 2018 @ Paris

14. (1) Technology cost drivers (Source: Ricardo)

15. (2) Resource requirementMetals demand for key materials from electric vehicle batteries (Source: BNEF) (Source: Ricardo, high level EV uptake scenario) Source: Bloomberg New Energy Finance

16. (3) Market demand uptake uncertainty (Source: BNEF) (Source: HIS Markit) INRIA Industry days 2018 @ Paris

17. (4) Total Cost of OwnershipUnderstanding Capital and Operating expenditures (Source: BNEF) INRIA Industry days 2018 @ Paris

18. (4) Total Cost of OwnershipUnderstanding Capital and Operating expenditures (Source: BNEF) INRIA Industry days 2018 @ Paris

19. (4) Total Cost of OwnershipUnderstanding Capital and Operating expenditures INRIA Industry days 2018 @ Paris

20. (4) New value chain and stakeholdersCould the Automotive industry move from B2C to B2B

21. (4) New value chain and stakeholdersCould the Automotive industry move from B2C to B2B INRIA Industry days 2018 @ Paris

22. (4) New value chain and stakeholdersCould the Automotive industry move from B2C to B2B INRIA Industry days 2018 @ Paris

23. H2020 European Structural Funds Financing mechanisms Grants and subsidies Equity • Infrastructure funds (eg. Marguerite, etc.) • Private equity Debt • Private investors • Commercial banks • IFIS/MDBs (eg. EIB) Blending/Financial Instrument • Risk absorption mechanisms (EFSI, CEF Debt Instrument) Private Public Partnerships INRIA Industry days 2018 @ Paris

24. Funding & Financing phases Global Loans Intermediaries(Banks) Investment Loans Quasi-equity Co-investments/Direct Equity Funding size (EUR m) Intermediaries(Funds) Growth Contingent Loans VC / SME Funds < 25m Private Equity (PE) / MidCap Funds Venture Capital (VCs) H2020 & CEF Second “Valley of Death” < 10m First “Valley of Death” GRANTS BLENDING DEBT < 7.5m Seed stage < 1.0m Project / Company development stage INRIA Industry days 2018 @ Paris

25. Thankyou! More information at: www.eib.org info@eib.org Tel.: +352 4379-22000 INRIA Industry days 2018 @ Paris