EU to invest 200 million euros into space industry
WASHINGTON — The European Union will provide 200 million euros ($222 million) to support Europe’s space industry, in the form of a loan to help fund development of the Ariane 6 and investment in space startups.
The European Commission and the European Investment Bank Group announced at a space policy conference in Brussels Jan. 21 that it would provide the space industry funding, a move that one EU official called a “game changer” for its support of the industry.
Half of the 200 million euros will be in a form of a loan to ArianeGroup to help the company pay for its share of the costs of developing the Ariane 6 rocket, set to make its debut late this year. The European Commission said in a statement that the loan will support “an innovative financing structure which will be contingent on Ariane 6’s commercial success, once operational.”
André Hubert Roussel, chief executive of ArianeGroup, said the loan will help finance facilities in France and Germany that will be used to produce and launch the rocket. The financing, he said, “fosters technological expertise allowing European launcher industry to remain always at the leading edge, becoming even more innovative and environmentally responsible.”
The other 100 million euros will go towards a new program, the InnovFin Space Equity Pilot, being developed in cooperation between the European Commission and European Investment Fund (EIF). That program will invest in European venture funds that support startups in the space sector.
The first example of such investment is Primo Space, an Italian firm raising an 80 million euro fund for backing early-stage companies seeking to commercialize space technologies. The agencies did not disclose how much they were investing into Primo Space.
“The first ever space equity pilot and our first fund, based in Italy, are a giant leap for the EIF in this sector,” Alain Godard, chief executive of the EIF, said in a statement. “Attracting more private capital to this sector enables us together to drive forward Europe’s space ambitions.”
European space startups have complained in recent years about the lack of venture financing available for their companies, in sharp contrast to the growing interest in space among venture capital funds in the United States and China. That has forced European companies to either seek alternative forms of financing or work with American or other non-European funds.
The EU effort is not the only one to try to bolster the funding environment for space startups in Europe. Last week, the government of Luxembourg announced it was joining with several companies and organizations to establish a new fund, Orbital Ventures, for early-stage space companies. That fund, which announced an initial closing of 70 million euros, will focus on “early stage space companies with ground-breaking ideas and technologies,” but will not limit itself to companies based in Europe.
European officials hailed the investment announcement. “The two announcements of today represent a game changer for Europe in the support of the European space industry,” said Thierry Breton, EU Commissioner for the Internal Market, in a statement. The loan to ArianeGroup, he said, ensures Europe maintains its own access to space, while the InnovFin Space Equity Pilot is “a clear signal that space business in Europe is an attractive opportunity.”
Questions remain, though, about the EU’s broader commitment to space. A budget drafted in 2018 proposed spending 16 billion euros from 2021 through 2027 on its space programs, primarily the Copernicus series of Earth observation satellites and the Galileo satellite navigation program. A revised budget published in December, though, proposed cutting that to 12.7 billion euros.
A final decision on the EU space budget is expected later this year. At a press briefing Jan. 15, Jan Woerner, director general of the European Space Agency, downplayed any impact the proposed cut would have on joint programs between his agency and the EU, but nonetheless advocated for the original, larger, budget.
“As I was involved last year for the 16 billion [euros], we will also support that this number is surviving, because we believe we need it for Copernicus as well as for Galileo,” he said.