BROLIS (EGF VD)

Quasi-equity financing to Brolis, a Lithuania-based company engaged in the development of wearable solutions for monitoring health parameters.

The proposed transaction will support research and development (R&D), manufacturing and product development costs for Brolis, a Lithuania-based company which develops wearable solutions for health monitoring.

The project concerns a venture debt operation under the European Guarantee Fund. The purpose of the loan is to provide direct equity-type financing under EIB's Venture Debt Instrument to bridge the liquidity need of the innovative company 'Brolis', an SME based primarily in Lithuania, which has been impacted by the Covid-19 pandemic. The financing of this project addresses the failure in financial markets for RDI, arising from limited access to commensurate financing as a result of factors such as information asymmetries, misalignment of incentives etc. The Promoter is a dedicated technological company focusing on developing innovative electro-optical sensing devices for multiple applications in the medical, consumer, industrial and agricultural segments targeting unmet needs with high socio-economic impact. The project further builds on a regional cluster of excellence in photonics, a designated Key Enabling Technology, concentrated around Vilnius University in Lithuania. Creation of knowledge and support of skilled jobs in a cohesion region will further add to the country's RDI intensity (presently below 1% of GDP) and contribute positively towards the EU's 3% RDI intensity target. EIBs involvement in this project will enable the innovation, development and manufacturing of leading-edge timely, accurate and non-invasive sensing technology of a novel 'spectrometer on the chip' for prioritised and sought after applications within particularly healthcare and wearable devices, but also OEM applications. Without the EIBs involvement this project including its important e.g. health benefits would have been significantly delayed due to the crisis.

The Promoter's investments concern research, development and innovation activities that are expected to be carried out in existing facilities already authorised for the same purpose and would therefore not require an environmental impact assessment (EIA) under Directive 2011/92/EU. Full environmental details will be verified during appraisal.

The Promoter is a private company, not operating in the utilities sector and does not have the status of a contracting authority; thus the project is not covered by the EU directives on procurement. However, the Promoter's procurement procedures are expected to be in line with EIB guidelines for private sector projects. The Bank's services will verify details during the project due diligence.