Lietuvos energija launches the first Innovation Fund in the Baltic countries
Lietuvos energija Group of state-controlled companies, by implementing its strategy and fostering innovations, initiates the establishment of a venture capital fund. The new fund will finance starters in the energy field. Up to EUR 1 million is planned to be invested into the selected best projects every year.
“Currently, the eco-system of Lietuvos energija innovations consists of the Activity Excellence Programme, internal Innovation Bank and cooperation with research institutions. Taking into consideration the world practice, we also see starters creating investments into innovative products and services as one of the innovation fostering instrument. This will enable to attract talents and ideas from outside, and we may use this potential for the enhancement of service quality and efficiency. This will enable to enhance the added value in a sustainable way, as well as to increase competitiveness of Lithuania”, Dr. Dalius Misiūnas, Chairman of the Board and the Director General of Lietuvos energija, stated.
This is the first energy Innovation Fund in the Baltic countries that will contribute to the growth of investments into starting projects. Venture capital investments in Lithuania achieved EUR 2 per capita in Lithuania during 2014, whereas such investments in Europe amount to EUR 11, the USA – EUR 148, and Israel – 413 EUR/year on average. The majority of large European energy companies already run or make investment into similar funds.
“Activities of the Fund will not be limited solely to Lithuanian projects – we will invest into projects from the Baltic countries by simultaneously evaluating ideas also from other states (e.g. Ukraine). We seek to strengthen such areas towards which the future energetic is moving – smart grids, renewable sources, smart houses, big data and analytics, e-services, etc. For the Fund’s participants, Lietuvos energija could become an actual test site or a customer”, explained Mr. Misiūnas.
The amount of investment planned by Lietuvos energija Innovation Fund will reach 1 m EUR/year. The Fund is planned to operate for 10 years, of which active investments will be made from one to five years. The Fund will start operation already in the second half of 2016, and by 2019, it will become a developed programme. Activities of the Fund will cover also an accelerator – authors of the selected incubation stage projects will be provided with premises for operation and free consultations by experts. The Fund is sought to earn a return compliant with the strategy of Lietuvos energija.
From hundreds of ideas – to a handful of companies
Activities of the Innovation Fund will start from the idea screening stage where 300-500 ideas are expected to be received. For the incubation stage, 50-60 ideas will be selected the authors of which will be provided with premises for operation, as well as consultation by experts. Later, during the acceleration stage, 10-15 best projects will be granted financing, for example, up to EUR 30 thousand, whereas for projects, selected into the last – investment stage – up to EUR 500 thousand may be invested.
Decisions on the selection of ideas for financing will be made by the Investment Committee. Selected starters will be granted partial financing; however, more important is the fact that Lietuvos energija Group, which is one of the largest energy companies in the Baltic countries, will be able to offer know-how and a suitable test ground for implementing the starters’ projects.
Lietuvos energija Innovation Fund will operate together with partners. Other investors will be able to contribute to the project financing in the energy sector, and one of the venture capital fund’s managers operating in the market will be appointed an advisor / partner on a competition basis.
“Currently, the eco-system of Lietuvos energija innovations consists of the Activity Excellence Programme, internal Innovation Bank and cooperation with research institutions. Taking into consideration the world practice, we also see starters creating investments into innovative products and services as one of the innovation fostering instrument. This will enable to attract talents and ideas from outside, and we may use this potential for the enhancement of service quality and efficiency. This will enable to enhance the added value in a sustainable way, as well as to increase competitiveness of Lithuania”, Dr. Dalius Misiūnas, Chairman of the Board and the Director General of Lietuvos energija, stated.
This is the first energy Innovation Fund in the Baltic countries that will contribute to the growth of investments into starting projects. Venture capital investments in Lithuania achieved EUR 2 per capita in Lithuania during 2014, whereas such investments in Europe amount to EUR 11, the USA – EUR 148, and Israel – 413 EUR/year on average. The majority of large European energy companies already run or make investment into similar funds.
“Activities of the Fund will not be limited solely to Lithuanian projects – we will invest into projects from the Baltic countries by simultaneously evaluating ideas also from other states (e.g. Ukraine). We seek to strengthen such areas towards which the future energetic is moving – smart grids, renewable sources, smart houses, big data and analytics, e-services, etc. For the Fund’s participants, Lietuvos energija could become an actual test site or a customer”, explained Mr. Misiūnas.
The amount of investment planned by Lietuvos energija Innovation Fund will reach 1 m EUR/year. The Fund is planned to operate for 10 years, of which active investments will be made from one to five years. The Fund will start operation already in the second half of 2016, and by 2019, it will become a developed programme. Activities of the Fund will cover also an accelerator – authors of the selected incubation stage projects will be provided with premises for operation and free consultations by experts. The Fund is sought to earn a return compliant with the strategy of Lietuvos energija.
From hundreds of ideas – to a handful of companies
Activities of the Innovation Fund will start from the idea screening stage where 300-500 ideas are expected to be received. For the incubation stage, 50-60 ideas will be selected the authors of which will be provided with premises for operation, as well as consultation by experts. Later, during the acceleration stage, 10-15 best projects will be granted financing, for example, up to EUR 30 thousand, whereas for projects, selected into the last – investment stage – up to EUR 500 thousand may be invested.
Decisions on the selection of ideas for financing will be made by the Investment Committee. Selected starters will be granted partial financing; however, more important is the fact that Lietuvos energija Group, which is one of the largest energy companies in the Baltic countries, will be able to offer know-how and a suitable test ground for implementing the starters’ projects.
Lietuvos energija Innovation Fund will operate together with partners. Other investors will be able to contribute to the project financing in the energy sector, and one of the venture capital fund’s managers operating in the market will be appointed an advisor / partner on a competition basis.
