Seimas adopted the Law on Innovation Promotion Fund

Date

2020 06 26

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Today, the Seimas adopted the Law on the Innovation Promotion Fund aimed to attract more investment to R & D & I. The Law initiated by the Ministry of the Economy and Innovation will enable the Innovation Promotion Fund to be established in 2021, which will ensure effective financing of R & D & I activities and will contribute to their development. The Fund will also make it much easier for businesses to obtain funds to implement innovative ideas.

‘The Innovation Promotion Fund will ensure larger than before public investment in R & D & I and will allow attracting more private business investment. The Fund will be in particular beneficial for innovative start-ups which require funding for starting business activities and product development. The Fund’s investments will also increase the created added value, productivity, the quantity of innovative products created, their variety, sales and exports in enterprises that received the investments,’ says Žygimantas Vaičiūnas, Minister of Energy, Acting Minister of the Economy and Innovation.

The Innovation Promotion Fund will also enable better planning of innovative activities and targeted investment, while the Fund’s investment in innovative companies will allow attracting external capital and foreign investment.

The Fund will be beneficial for the Lithuanian economy as it will help promote the development and sale of new products, private investment and will strengthen the ecosystem of companies implementing R & D & I activities. It will also have an impact on public finances as it will increase taxes paid to the state budget by innovative businesses.

The Fund’s investments will be carried out through financial instruments in the form of loans, guarantees and venture capital investments in innovative businesses. This will ensure a considerable return of the fund’s investment. Moreover, the operation of the Fund will ensure sustainable promotional funding for innovative activities even in times of economic difficulties and will allow the national businesses to adapt to the situation of decreased EU funding.

State budget funding will be allocated to the Fund to satisfy the needs taking into account the financial possibilities of the State and the demand for investments of the Fund. It is planned to allocate funds from the EU and other sources. Over the period of 2021–2040, the Fund inflows  and its investment could reach around EUR 900 million in total.