Bpifrance and the European Investment Bank (EIB) are stepping up their cooperation to foster the recovery. The EIB supports the action taken by Bpifrance with an agreement for €1 billion in loans, 75%-guaranteed by the Bank, to boost cash flow for French mid-caps. The EIB also announces an investment in France Investissement Tourisme 2, representing 25% of the fund’s endowment.
Two agreements, amounting to more than €1 billion, were signed by EIB Vice-President Ambroise Fayolle and Nicolas Dufourcq, chief executive of Bpifrance, in the presence of EIB President Werner Hoyer. The agreements are intended to boost cash flow for mid-caps and strengthen the capital of companies operating in the tourism sector.
These two operations were made possible thanks to the EIB’s support. One of the deals was facilitated by the Pan-European Guarantee Fund, a stimulus instrument set up by the EIB Group on the basis of contributions from France and other EU Member States. The other comes under the European Fund for Strategic Investments (EFSI) of the Investment Plan for Europe (also known as the Juncker Plan).
EIB President Werner Hoyer emphasised: “the importance of Europe’s mobilisation in record time to help companies cope with the consequences of the COVID-19 crisis and accelerate the financing of the recovery. We are committed to providing companies with all the resources they need to overcome the pandemic and get back on track.”
EIB Vice-President Ambroise Fayolle welcomed this new collaboration: “As long-standing partners, the EIB and BPI are joining forces to help businesses by providing them with access to the financing they need right now. This is also the reason for our support targeting the tourism sector, which was particularly affected by the health crisis.”
Nicolas Dufourcq, chief executive of Bpifrance, hailed these new areas of cooperation: “Bpifrance and the EIB are consolidating their joint action on segments which are key to the recovery of the French economy. Thanks to the EIB’s support, we can strengthen our short-term action for mid-caps that drive the competitiveness of our industry, provide jobs and foster the dynamism of our regions. We also confirm our commitment to helping tourism companies transform and bounce back since they are so badly hit by the crisis and play an essential role in our economy.”
Launch of new cash advances for French mid-caps
Launching call to tender procedures creates short-term financing needs for companies as they seek to secure a supply of raw materials or equipment which are not always covered. With the support of the EIB, Bpifrance will offer mid-caps new cash advance schemes, including the “Avance + Préfinancement” (“Advance + Pre-financing”) facilities, to provide companies with the cash they need to launch the call to tender procedures. The agreement covers a total of €1 billion in loans ranging from €0.1 to €50 million, 75%-guaranteed by the EIB. This scheme will make it possible to support mid-caps for a maximum period of 24 months.
This agreement enhances Bpifrance’s range of short-term financing products, extending it beyond the core target of small and medium-sized enterprises.
EIB invests in France Investissement Tourisme 2 (FIT2), an equity and quasi-equity fund targeting operators in the French tourism sector
In 2020, Bpifrance launched France Investissement Tourisme 2 following the first fully invested fund created in 2015. FIT 2 aims to support small and medium-sized enterprises and small mid-caps in the tourism sector which, although undermined by a cyclical situation, exhibits sustainable fundamentals in the long term. With an endowment of close to €190 million and an investment from Banque des Territoires (Groupe Caisse des Dépôts), the fund aims to provide nearly 150 tourism operators with equity and quasi-equity, with investment tickets generally ranging from €0.4 million to €7 million.
Beyond the envisaged economic contribution, FIT 2 is seeking to attract co-investors to this segment to generate a catalytic effect and restore the ecosystem with confidence.
With an investment representing 25% of the fund’s endowment, the EIB is boosting the firepower of FIT 2 and supporting its goal of fostering the sector’s rebound and digital and sustainable transition. All this should make France a benchmark for responsible and innovative tourism.
Background information
About Bpifrance
Bpifrance finances businesses – at every stage of their development – by providing credit, guarantees and equity. Bpifrance supports them with their innovation projects and on international markets. Bpifrance also assists them with their export business via a wide range of products. Advisory and university services, networking and an acceleration programme for start-ups, small and medium-sized enterprises and mid-caps are among the other options offered to businesses. Thanks to Bpifrance and its 50 regional branches, businesses benefit from a single, efficient local player to meet their challenges.
About the Pan-European Guarantee Fund
The Pan-European Guarantee Fund was set up by the EIB Group on the basis of contributions from France and other EU Member States with the aim of protecting companies affected by the COVID-19 pandemic. With almost €25 billion in guarantees, the Pan-European Guarantee Fund enables the EIB and the EIF to provide loans, guarantees, equity and other financial instruments quickly, and also intervene in securitisation, mainly to support small and medium-sized enterprises. The Pan-European Guarantee Fund is part of the European Union’s recovery programme, which aims to provide a total of €540 billion to stimulate the hardest-hit sectors of the EU economy.
About the European Fund for Strategic Investments (EFSI)
The European Fund for Strategic Investments (EFSI) is the central pillar of the Investment Plan for Europe. It provides first-loss guarantees, enabling the EIB to invest in more, and often riskier projects. The projects and agreements approved for financing under EFSI should make it possible to mobilise €546.5 billion of investment and support more than 1.5 million companies in the European Union.