February 26, 2024

European Space Sector Boosted by Tripartite Agreement for Enhanced Financing

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The European Commission (EC), European Space Agency (ESA), and European Investment Bank (EIB) have forged a tripartite agreement aimed at facilitating increased financing for space companies. The agreement, signed on January 24, seeks to streamline access to diverse financial resources available in the region to foster the growth of its burgeoning space ecosystem.

Among the prominent avenues for space investment by the EIB is the Strategic European Security Initiative (SESI), a substantial 8 billion euros ($8.7 billion) fund launched in 2022 with a five-year duration. While SESI primarily targets strategic assets related to security and defense, space projects constitute only a fraction of the funding, despite the sector’s growing strategic significance. To date, the EIB has approved around 2 billion euros under SESI, with only a fifth allocated to the space domain.

Recognizing the hurdles in accessing financing for the space sector, Timo Pesonen, the EC’s director-general for defense and space, emphasized the persistent challenges even amid efforts to support domestic space endeavors.

As part of their collaboration, the three European institutions plan to conduct regular meetings to identify and address bottlenecks in space financing. The EIB, ESA, and EC intend to proactively identify promising European space projects and provide financial advice through EIB advisory services, facilitating easier access to debt financing. Additionally, the partnership aims to share best practices in public-private partnerships (PPPs), fostering a conducive environment for more PPP-based space projects within the European Union.

This collaboration comes on the heels of the European Investment Fund’s launch of a 175 million euro equity fund for defense investments, with potential benefits for the space sector. Moreover, Europe boasts the Cassini initiative, an entrepreneurial endeavor in the space domain, featuring a substantial one billion euro seed and growth fund. The tripartite agreement signifies a concerted effort to fortify Europe’s position in the global space arena, emphasizing the need for strategic investments and streamlined financing for innovative space projects.

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