Pan European Networks - Horizon 2020 - page 164

The EIB has some flexibility in terms of how it
provides funding: its financing instruments go
beyond loans, and the bank can work directly
with either public or private entities, or through
intermediaries. It can blend its funding with
grants from the European Commission or other
sources, and it provides advisory services to its
clients on both technical and financial matters.
According to the EIB’s Monica Scatasta, deputy
economic advisor in the Water and Waste
Management Division, one obstacle to
accessing finance for innovation in the water
sector is the maturity of the domain. She says
that it is consequently “difficult to find solutions
that adapt existing systems and existing
technologies”. Furthermore, particularly in
western Europe: “The flip side of this is the
large number of opportunities for renovation of
existing infrastructure. In terms of timing, it
would be a good time to start thinking of
another good solution, not only in terms of
technology but in terms of financial structures,
as well.”
Market fragmentation also makes it difficult
for innovative technology suppliers to provide
a solution and increase scale. Scatasta
comments: “A company has to deal with
procurement processes, public procurement
rules, and fragmentation of demand … the
uptake of innovation can often be relatively
slow.” New regulations can encourage
innovation, but regulation of the sector also
means that the “potential for failure can have
grave consequences, further slowing the
adoption of innovative solutions”.
There is also a growing social component that
makes water different from other sectors. The
EIB advisor adds: “The lack of incentives for
water users, specifically for innovations that
are linked with increased efficiency in the use
of water resources, is also due to the fact that
the price of water is often at a level that does
not include scarcity values.” Water-intensive
industries are already aware of scarcity
values and increasingly include them in their
risk assessments.
Private sector role
In November 2014, Scatasta addressed
delegates at the EIP Water conference and
offered further insight into business thinking,
providing additional funding for water
stewardship and improving the management of
water resources.
Innovation bottlenecks
In 2013, EIP Water launched a taskforce to assess the non-technical
challenges to achieving the objectives for each of its priority areas. Gernot
Klotz, executive director of research and innovation at the European
Chemical Industry Council and member of the taskforce, summarised
the main bottlenecks and barriers to innovation during a panel discussion
at the second annual EIP Water conference in November 2014 in
Barcelona, Spain.
Speaking to delegates, Klotz said: “The first issue is financial instruments.
There are insufficient financial flows into the water sector, inadequate
cost recovery and risk aversion, a lack of resources for SMEs to respond
to market opportunities and access to sources of funding, and a lack of
combined funding models.
“A second issue is public procurement. Public procurement has great
potential to stimulate innovation in the value chain, but procurement rules
need to be interpreted and adapted in a way that promotes innovation.
“Another area for consideration is public private (PPP) or public-public
(PuP) partnerships. The water market is fragmented, there is low co-
operation among the actors in the water-related value chain, and water
management at the national, regional or local level does not facilitate the
implementation of innovative solutions. Partnership approaches that
ensure co-operation and finance, like PPPs, need to be explored.
“Next is regulation. Although they can be restrictive, regulations are
essential to innovation in the water sector. They should be evaluated
based on their effects on placing innovation in the global water market.
“The final issue is showcases and demonstration sites. There are good
examples of co-operation in a variety of areas that should be identified,
disseminated, and developed into regional showcases.”
Innovative finance
The European Investment Bank (EIB) serves as the ‘EU water bank’ and
is possibly the largest lender to the water sector, with over €18bn in
water sector loans in 2009-2013; 99% of that funding goes to water
projects in the EU. On average, EIB loans cover 30% of the investment
cost of water projects, meaning that the bank has supported investment
in the sector of almost €55bn in the last five years.
I S S U E S I X
H O R I Z O N 2 0 2 0 P R O J E C T S : P O R TA L
164
S O C I E TA L C H A L L E N G E S : E N V I R O N M E N T
EIP Water’s City
Blueprints Action
Group includes the
participation of a
number of cities
across Europe,
including the Swedish
capital Stockholm
1...,154,155,156,157,158,159,160,161,162,163 165,166,167,168,169,170,171,172,173,174,...244
Powered by FlippingBook