I would like to welcome you to today's event to present the Cyprus Equity Fund, the first equity fund in Cyprus to be supported by public resources. Even though we are currently in the covid measures easing stage, we have opted for an online event that allows us to welcome many participants from Cyprus and abroad of innovative entrepreneurship and address a broader audience in Cyprus and abroad.
The Ministry of Finance has long been committed to introducing a financial instrument to support startups and innovative companies with equity financing. Therefore, the agreement with the European Investment Fund to manage this new financial instrument is of paramount importance and a significant milestone in the Government's efforts to enhance alternative financing.
Ladies and gentlemen,
The contribution of entrepreneurship and innovation to economic prosperity has grown with the shift of the global economy towards a mode of production in which knowledge has become a key input. The challenges of the knowledge economy are critical to growth. Vigorous entrepreneurship and SME development are among the most important conditions for successfully meeting the challenges of a continuously evolving global economy.
There is a silver lining in the covid crisis; this is the accelerated and boosted support of the European Union towards a green and digital economy, mainly expressed through the Resilience and Recovery Facility and the InvestEU Initiative. In this context we have also included the Equity Fund in our National Resilience and Recovery Plan.
Our aspiration is that the Cyprus Equity Fund will provide the necessary boost for Cyprus' emerging and promising innovation ecosystem, which already records in the last few years robust growth rates in research and innovation investments and strong international scientific collaborations. It will also facilitate the further development of the nascent venture capital market by providing the opportunity to local and international VCs to operate and invest in Cyprus.
The Government's commitment and confidence in the project are evident by the increase of the initially approved support by €10m to reach a total of €30m. This amount will be supplemented by private capital. We have set the bar high for the private investors' participation in the Fund since leveraging private resources is one of the Fund's main objectives and an essential element to its long-term success.
The Fund that will be created following the EIF's call process will capitalize on stakeholders' market expertise to adequately address the equity financing gap by supporting innovative entrepreneurship with the required initial and follow-on investments. It will benefit the emerging and growing Cyprus startups and innovation ecosystem powered traditionally by government grants, angel investors, incubators, and accelerators.
The Cyprus Equity Fund also provides a significant opportunity to the local Funds industry to take part in risk financing primarily targeted at Cypriot businesses. This is an excellent opportunity for me to reaffirm the Cyprus government's support for the development of the Funds industry in Cyprus, as it has been identified as a sector in which Cyprus has a competitive advantage stemming from its skilled human capital, the competitive running and set up costs, as well as its access to the European and regional markets, under the robust framework of the European Union for financial services.
The EIF's interest in managing the Cyprus Equity Fund is by itself a significant vote of confidence in our innovation ecosystem. Overall, EIF's financial instruments support the European goals while abiding by the free market rules and addressing its needs. EIF will provide the selected Fund Manager its valuable expertise and share Venture Capital market good practices for the governance and deployment of the Fund.
Ladies and gentlemen,
It has been great to briefly address one of our economy's most active and enthusiastic local stakeholders, as well as international players interested in this promising endeavour.
I will now pass the floor to our partners from the European Investment Fund, whom I wish to thank sincerely for their cooperation during the past few months. They will present the Cyprus Equity Fund investment strategy details and guide you through the Fund Manager's selection process.
The next few months should be very exciting for Cyprus's VC and innovation ecosystem, as we are expecting vigorous activity and high participation in the call process.