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Intermediated lending for local authorities - features

Intermediated lending for local authorities - features

 

Are you a local authority looking for financing for your investments?

EIB cooperates with a wide range of financial intermediaries that offer financial products targeting local authorities and public sector entities.



What is intermediated lending for local authorities?

Loans to financial institutions across Europe, which subsequently on-lend to the final beneficiaries, promoting eligible projects. Final beneficiaries include local authorities and public sector entities. Depending on the risk and other features of the specific operation, this product may be supported by the European Fund for Strategic Investments (EFSI) or other mandates managed by the EIB.



Who is eligible?

  • Banks, leasing companies, national promotional banks or institutions


Key benefits of EIB intermediated lending for local authorities

  • Long tenors and attractive pricing
  • Quality stamp and positive signalling effect
  • Long-term perspective, with a view to supporting EU public policy objectives


Indicative features

Instrument

medium and long-term loans

Counterparty

Banks, leasing companies, national promotional banks or institutions (a Financial Intermediary)

Purpose

to fund the Financial Intermediary’s financing of eligible projects. One loan can finance multiple sub-projects

Eligibility

underlying loans to finance small-scale investments by local authorities and public sector entities, in projects promoting the knowledge economy/skills and innovation or linking regional and national transport infrastructure, environmental sustainability, growth and employment potential, economic and social cohesion. Multi-sector operations can also be envisaged.

For each project undertaken, the amount of the EIB loan allocated to it may not exceed 50% of project’s investment cost.

Loan size

indicatively above EUR 25m (smaller on a case-by-case basis), taking into account:

  • the credit risk limits applicable for the risk profile of the borrower and the operation structure, and
  • sufficient pipeline of eligible underlying projects

Example: a financial intermediary takes a loan of EUR 100m to on-lend to municipalities. The loan is used to finance multiple projects (of individual cost typically not exceeding EUR 25m) of at least EUR 200m in total

Tenor

up to 15 years, depending on credit risk profile and economic life of the assets

Rank

senior

Covenants & security

secured (for example through asset backed securities or covered bonds), or unsecured; decided on a case-by-case basis

Pricing

reflects the credit risk profile and EIB funding advantage based on its excellent rating

Allocation

commitment to on-lend the funds to eligible final beneficiaries within a specified timeframe

How to apply

  • European Investment Bank

98-100, boulevard Konrad Adenauer
L-2950 Luxembourg
Or contact an EIB local office in Europe

  • Call us

+352 4379-22000

  • Email us

info@eib.org

  • Contact EIB Infodesk

contact form




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