Luxembourg: EIB and BGL BNP Paribas renew their partnership

New EUR 50 million loan for SMEs in Luxembourg

On 20 November 2014, the European Investment Bank (EIB) and BGL BNP Paribas signed a new partnership agreement involving a EUR 50 million EIB loan targeting small and medium-sized enterprises (SMEs) and midcaps.

Following on from a first EUR 50 million loan for SMEs provided in 2009, which has now been entirely used up, this new partnership agreement will enable BGL BNP Paribas to continue actively supporting the financing of Luxembourgish firms and fostering their development.

This “EIB loan for SMEs” consists of a credit line that BGL BNP Paribas will deploy in support of small businesses with fewer than 250 employees trading in a broad range of sectors eligible for EIB financing. The new agreement will extend this facility to midcap companies (with up to 3 000 employees). Projects financed must be located within the European Union and have an investment cost of a maximum of EUR 25 million. Borrowing firms are assured of enjoying the benefits of EIB funding, particularly in the form of reduced interest rates.

Carlo Thill, Country Head and Chairman of the Management Board of BGL BNP Paribas, said: “As Luxembourg’s leading corporate bank, we are delighted to be able to continue participating in this EIB financing operation. Having supported our SME customers with the proceeds of the first loan since 2009, today’s new loan will enable us to continue providing businesses with the opportunity not only of funding themselves at reduced rates but also of benefiting from other favourable terms.”

Pim Van Ballekom, EIB Vice President: “This new operation – and the success of the previous one – testify to the essential close cooperation between the EIB and the European Union’s banks: in this particular case BGL BNP Paribas, a key institution for Luxembourg’s economy. These agreements to finance SMEs and midcaps are vitally important because such firms are still underserviced due to the current economic situation. We have been by their side both before and during the crisis and we shall continue to support them. By giving them the means to develop and become more competitive we are fostering job creation and a return to growth.”

With its “loans for SMEs and midcaps” programme, the EIB, the EU’s financing institution, supports the economic development and competitiveness of such firms. To this end, it works together with commercial banks that act as intermediaries, utilising their branch networks and knowledge of SMEs and midcaps.

Since the start of 2014, the EIB has disbursed EUR 14.3 billion worth of loans for SMEs and midcaps in the European Union and its partner countries. In the first ten months of the year, new signatures – with 112 partner banks in 24 countries – amounted to EUR 16.4 billion. This represents substantial support and assures businesses of the ongoing availability of financing for their projects.

As well as BGL BNP Paribas, BNP Paribas in France, BNP Paribas Fortis in Belgium and BNL in Italy have also renewed their partnership agreements with the EIB, enabling the BNP Paribas Group to continue offering favourable lending terms to its SME and midcap customers in its four domestic markets.