JERUSALEM - The European Investment Fund (EIF) announced earlier this week that it will invest $20 million in Israeli clean-tech fund Israel Cleantech Ventures (ICV).

It is the first EU investment of its kind, as part of the bloc's Horizon 2020 program, a research and innovation framework aimed at ensuring its global competitiveness through extensive research and innovation.

"Israel is a top world innovator," said Ramona Samson, deputy head of Unit and the European Commission, while announcing the investment.

"Today's innovations in clean technology coming from Internet and Communication Technology (ICT) will shape tomorrow's global economy," Samson said, adding that the next industrial revolution will shape our economy through ICT.

The money is coming from InnovFin, the financial arm of the 2020 initiative.

The investment is a further testament to the flourishing trade and high-tech relations between the EU and Israel since a bilateral free trade agreement was signed in 1975.

The EU is Israel's largest trading partner and has remained so over the last decades, according to Israel's Central Bureau of Statistics.

According to EU officials at the press conference, the investment is mutually beneficial for both sides.

"The relationship contributes to the well-being of Israelis and Europeans," said EU Ambassador to Israel Emanuele Giaufret.

The money invested in ICV is aimed at promoting early-stage projects focused on sustainability, which is also a focus of the EIF, said EIF Chief Executive Pier Luigi Gilibert.

"Israel offers a strong early stage market opportunity and ICV is an attractive first investment," he said.

The marriage between ICV and EIF can be seen as a natural extension of the relations between the EU and Israel. With the EIF tasked to supporting European small and medium sized enterprises, ICV is exactly the type of firm which can serve as a complement in areas where Europe is lagging behind.

"Israel's successful and dynamic innovation ecosystem, particularly in converting start-ups into novelty scale-ups, is an inspiration for Europe," said Samson.

Israel is considered one of the leading global hubs for high-tech and innovation. In its short history as such a center in the past two decades, over 10,000 start-up companies have been founded, several of them sold to global giants such as Google, Intel and Facebook.

There are currently more than 5,800 active start-up companies in Israel, with approximately 1,000 new ones being founded each year.

According to the Israeli Innovation Authority, Israel's contribution to industrial development in Horizon 2020 will total 1.1 billion euros ($1.28 billlion).

In 2016, the EIF signed an agreement with Israel's Leumi Bank to provide loan guarantees for seed stage startups. It allowed the bank to provide budding innovators with access to an additional $100 million.

"Banks are sometimes very unhappy to take risks," said Gilibert. One of the challenges for start-ups is raising money for what is often perceived as an investment that may not bear fruit.

At the conclusion of the press conference, Gilibert revealed that the EIF is in the process of signing a similar agreement with an additional Israeli bank.

"We are also hoping to approve investments in at least two more funds," he said. "Fostering technology will be on the top of our agenda for a long time."