AS shipping and other ocean industries with a heavy focus on technology development to meet future challenges, a new funding mechanism is needed where the entrepreneurial risks are more evenly shared.
Shipping, ocean energy, aquaculture and other ocean activities that are under growing pressure to evolve into environmentally and commercially sustainable industries require significant injections of innovation, which will likely come from a diverse list of suppliers as opposed to the main entity on the chain.
Early stage investment for concept approval, mezzanine investment for the expansion phase of a new solution and then the larger loan guarantees for commercialisation of a technology all have different requirements.
Talking at the Opening Oceans Conference earlier this month Jan Olaf Willum’s, the experienced entrepreneur behind Inspire Invest in Norway said it is imperative that the ocean industries work more collaboratively n their finance models.
Willums has a long history if financing and funding innovation and has been instrumental in the recent success that has led to Norway becoming one of the leaders in battery powered watercraft
Early stage, or new technology financing can often come in part from a government body or devolved agency that can offer an element of credibility to an idea that may be seen as a bit off the wall. Such state backed funding will be in partnership with a private actor, with the investment based on a results-based return where the government assumes higher risks.
Assuming a new technology clears the initial proof of concept stage, they will often require further funding for expansion, possibly in terms of larger scale model trials and in pre-commercialisation such as linking with suppliers and markets.
This mezzanine financing is an important step and should be in the form of low-interest risk loans to small and medium enterprises said Willums, pointing to technology focused subsidies and public-sector trial models along with political risk coverage when it comes to the involvement of emerging economies.
Finally, n the assumption of the new technology being proven and pushed through a development and growth phase of investment, it will need solid commercialisation to spread the idea into the market or markets where it can do the most benefit.
While many industries are familiar with nationally focused loan guarantees aimed at promoting national technology exports, there should be something similar that recognises the societal importance of technology solutions or innovations that are promoting the sustainable ocean agenda.
Willums is pushing for the three stages of investment to be developed into a single integrated funding mechanisms where the private sector, corporates, venture capitalists and risk investors along with state entities such as local governments, the European Union, European Investment Bank partner to create a flexible long-term financing mechanism.