TAU GROUP (IEU GT2)

Promoter – Financial Intermediary

TAU ACT GMBH

Location

• Italy

Description

The project concerns the scale-up of capacity of the existing production facility from the current 2,000 tons of wire/year to an annual capacity in the range of 8,000 to 12,000 tons of magnet wire used in all types of powertrain motors in automotive, renewable energy and consumer applications. The Project includes also Promoter's RDI including R&D facility and equipment capex, for the development of new wire solutions in automotive and adjacent markets. The investments are located in in Turin, Italy, for the period 2024-2027."

Additionality and Impact

The promoter's investments address the market failures and gaps associated with imperfect competition and incomplete markets for industry electrification, and those associated with projects with positive environmental and knowledge externalities generation. In addition the project supports the policy objective of support for SMEs, as it addresses funding gaps rooted in structural market failures across the EU in the provision of adequate risk capital to venture backed companies.

As such, the project will i) create the conditions for accelerated and wider market adoption of its products, ii) contribute to further knowledge creation, accumulation, and diffusion through collaborations with industry, academia, and patenting iii) support the development of a relevant ecosystem of technology companies and iv) provide necessary skills through hiring and upskilling of employees. It will contribute to furthering the automotive industry' sustainability in the longer term and lead to important environmental and knowledge externalities through its market deployment.

The Project is in line with the requirements defined in the THEMATIC GREEN TRANSITION (IEU VD & DEBT) LE II (2023-0701). It contributes to the development and deployment of more circular, easier to recycle materials (by design) used in high potential sectors for circularity such as batteries and vehicles. It includes research, development and deployment of innovative technologies contributing to the development of a more efficient and sustainable European transport system and is fully aligned with the Bank's Climate Bank Roadmap.

This project will help the promoter with the implementation of its strategy targeting to develop and deploy innovative technologies needed to address the opportunities created by the ongoing mobility evolution towards decarbonisation through increased vehicle electrification. It will help by building up the necessary capabilities, skills and product technology platforms that will contribute strengthening its competitiveness and achieving its long-term profitability targets.

The promoter's R&D capability, its focus on innovation and sustainability, its technology edge, industrialisation capability and strong ecosystem of partners, along with its experienced management will help implement a sound and sustainable project and contribute to the Bank's policy objectives.

The proposed financing is a quasi-equity investment, which provides the company with additional financial flexibility to scale-up. The proposed financing provides diversification and stability to the borrower's financing by providing alternative funding sources. The company can benefits from a longer bullet-equivalent tenor and flexible availability period compared to what available in the market.

The level of risk this operation is expected to be in excess of the risk capacity the EIB could take using its own resources. The operation could not be executed without the strong EU First Loss Piece support provided by the Green Transition Thematic product. 

Objectives

The project supports the InvestEU Main Policy Priority Areas (MPPA) for Research, innovation and digitisation window (RIDW) supporting Sustainable and smart transport and mobility. The project contributes to the development and deployment of more circular, easier to recycle materials (by design) used in high potential sectors for circularity such as batteries and vehicles.

Sector(s)

• Industry - Manufacturing

Proposed EIB finance (Approximate amount)

EUR 20 million

Total cost (Approximate amount)

EUR 42 million

Environmental aspects

The project primarily concerns investments in R&D and capital expenditures that are not specifically mentioned under the Environmental Impact Assessment (EIA) Directive 2011/92/EU (as amended by 2014/52/EU) and that are expected to be carried out in existing facilities without changing the already-authorised scope; it would therefore not require an EIA under the Directive 2011/92/EU as amended. The environmental details of the project will be reviewed by the Bank's services during the project appraisal.

Procurement

The promoter has been assessed by the EIB as being a private company not being subject to EU rules on public procurement or concessions. However, if after the project appraisal, the EIB were to conclude that the promoter is after all subject to EU public procurement legislation Directive 2014/24/EU, then the EIB requires the promoter to ensure that contracts for the implementation of the project will be tendered in accordance with the relevant applicable EU procurement legislation Directives 2014/24/EU as well as Directive 89/665/EEC, as interpreted by the Court of Justice of the EU, with the publication of tender notices in the Official Journal of the European Union, as and where required.

Status

Signed - 22/11/2024