Germany: EIB joins forces with development institution in Rheinland-Pfalz – EUR 200 million for SME financing in the region

The European Investment Bank (EIB) is building on its cooperation with regional development institutions. The EU bank is now joining forces for the first time with Investitions- und Strukturbank Rheinland-Pfalz (ISB). The two parties signed a EUR 200 million loan agreement in Luxembourg on Monday. These funds will be used to finance the investment projects of small and medium-sized enterprises (SMEs).

To finance SME investment, one of its top priorities, the EIB works together with intermediary institutions like ISB. Rheinland-Pfalz’s development institution will onlend the funds to eligible businesses, generally SMEs but also so-called midcaps (firms with up to 3000 employees). ISB can also work together with other intermediaries, which will in turn onlend the funds to end borrowers. The aim is to provide small businesses in the region with the broadest possible financing offer. As ISB is obliged to match the EIB loan with at least the same amount, loans totalling some EUR 400 million will be made available to such firms.

EIB Vice-President Wilhelm Molterer described the agreement as “groundbreaking” as it would enable the EIB to further decentralise its financing offer and reach even more SMEs and midcaps going forward. “As Rheinland-Pfalz’s key development institution, ISB is ideally placed to provide loans to the region’s enterprises. Supporting the investment projects of this important business segment will continue to be one of the EU bank’s central concerns, so we are delighted that thanks to today’s agreement even more firms will be able to benefit from the EIB’s long-term loans at favourable interest rates. And this can only be good for the region’s economy and jobs”, said Wilhelm Molterer when signing the agreement.

The spokesman of ISB’s Management Board, Ulrich Dexheimer, added: “With the EIB as our partner, we can further expand our financing portfolio and strengthen our support for SME investment in Rheinland-Pfalz, focusing on the different financing requirements.” Mr Dexheimer stressed that, as Rheinland-Pfalz’s promotional bank, ISB supported the region’s economy with high quality financing instruments that helped to create and safeguard skilled jobs.