31/05/2024 - The European Commission and European Investment Fund have announced three new loan guarantee agreements with organisations from France, Germany and Finland

l-r: Alessandro Tappi, Roberto Viola, Dr Jan Wünschmann, Karim Mouttalib and Niki Leskinen during the presentation at Cannes

Last week, at the 77th Cannes Film Festival, the European Commission and the European Investment Fund (EIF), backed by the InvestEU programme, signed agreements to facilitate €141 million worth of financing to Europe’s creative and cultural sectors, through intermediaries from France, Germany and Finland. Providing access to finance via loan guarantees for European small and medium enterprises will be France’s Institut pour le Financement du Cinéma et des Industries Culturelles (IFCIC), Germany’s Beta Film and the Finnish Impact Film Fund, managed by Aurora Studios.

These particular loan guarantees, allowing the guarantor to assume the debt obligation if the borrower defaults, are designed to be taken advantage of by smaller companies in the sector, which find it more difficult to access finance from public and private sources, allowing them the means to back larger projects and better compete at the international level.

The IFCIC has access to an EIF guarantee line leveraging at around €85 million. With this new portfolio of financing, the organisation can provide debt financing to public and private enterprises that are touting riskier audiovisual productions. As the EIF puts it, with the audiovisual sector, “banks lack the know-how to assess expected cashflows and productions’ success”.

Beta Film, whilst being based in Germany, will allow independent producers from across Europe to obtain additional financing for their audiovisual projects, and promote international distribution. The European Union’s support will leverage a portfolio of around €45 million, supplementing traditional lenders and providing “tailor-made” financing solutions to businesses in the sector, which might otherwise struggle to bridge the funding gap upon reaching the production stage.

Finally, the Finnish Impact Film Fund has been approved a guarantee line from the EIF. Around €11 million are expected to be issued to the alternative investment fund, supporting “artistically and commercially ambitious” films and TV series.

“We are delighted to support Europe's cultural and creative sectors through this series of agreements supported by the InvestEU programme,” said EIF chief investment officer Alessandro Tappi. “These three French, German and Finnish partners, benefiting from guarantees granted by the EIF, play an essential role in supporting European audiovisual productions. Culture is at the heart of the European project, and these agreements can make an important contribution to maintaining and creating many jobs in a sector that has both a close link to our European identity and strong export aspirations.”

Thierry Breton, Commissioner for the Internal Market, remarked, “Through the InvestEU Cultural and Creative Portfolio Guarantee Product, the EU is strongly committed to helping cultural and creative businesses finance their innovative projects and initiatives, contributing to European diversity and economic development, and keeping European audiovisual creation at the forefront of the world stage.”