The European Investment Fund (EIF) announced its first ever equity investment in Israel on Thursday, with a $20 million investment in the new fund of Israel Cleantech Ventures (ICV) backing innovative Israeli clean technology.The European investment, which comes as a direct benefit of Israel’s participation in the EU’s Horizon 2020 program for research and innovation, was announced by a high-level European delegation visiting Tel Aviv led by EIF chief executive Pier Luigi Gilibert.With the support of the EIF’s anchor investment, ICV will aim to invest $75m. into Israeli seed and early-stage companies developing software, hardware and infrastructure innovation that enhance resource efficiency and sustainability.ICV has already invested more than $150m. in 25 companies from its previous two funds, ranging from start-ups developing digital farming systems to modernized international freight software.“Israel is the start-up nation and at the forefront of innovation - but there are still sectors, such as the one covered by ICV, where private capital is still hesitating and they need somebody to show the way and to attract other investors,” Gilibert told The Jerusalem Post at the launch of the fund.“What we do, not only in Israel but also elsewhere, is that when the EIF goes into a deal, there is a sort of quality branding that we put on the initiative and this allows it to grow.”Gilibert said announcements regarding further EIF investment in Israel will be made soon, including two additional equity investments in venture capital funds.“We are proud that EIF has chosen to make its first investment in Israel through ICV,” said ICV founding partner Meir Ukeles. “Given their vast experience as a limited partner in over 300 venture capital funds, we are thrilled to have EIF as the anchor investor in ICV III.”Ukeles added that ICV had already received commitments from additional investors, bringing the fund closer to its $75m. target and its sizable investment in Israeli companies targeting markets that have been historically difficult to crack.EU Ambassador to Israel Emanuele Giaufret welcomed the EIF’s first equity investment in Israel.“For more than 20 years, Israel has been a partner in the EU’s research and innovation program creating the right environment for significant investment to be made,” said Giaufret.“Such investments, especially in sustainability, not only encourage the local economy but also prepare Israel to manage its environmental challenges.”Israel’s contribution to industrial development in Horizon 2020, via the Innovation Authority, will total some 1.1 billion euros during the seven- year program.“Such investments present Israeli start-up and scale-up companies with a substantial growth path and smoother entry to the European market,” said Aharon Aharon, CEO of the Innovation Authority.The EU represents the largest trading partner for Israel, with bilateral trade amounting to approximately 36.2 billion euros in 2017. Israeli companies have been increasingly turning to their European neighbors as possible locations for expansion in recent years due to their geographical proximity and cultural similarity.“Israeli industry is using the European market as a place to scale up with companies choosing Europe as initial markets for expansion,” Sagi Dagan, vice president of the Innovation Authority’s Growth Division, told the Post.“Most research and development centers opened outside of Israel are being opened in Europe. The distance is short, the culture is similar and ties are very strong.”In 2016, the EIF and Bank Leumi signed a two-year $100m. guarantee agreement to lend funds to small and medium-sized technology enterprises under the Horizon 2020 program.The agreement was renewed in December 2017, extending it until 2020 and offering up to $200m. in finance to tech companies.The EIF, Gilibert said, is currently in negotiations with a second major Israeli bank to establish a similar agreement in which guarantees are provided to local banks to offer loans to fund the growth of companies.