Coronavirus outbreak: EIB Group’s response
The Board of Directors of the Bank has agreed on the structure and business approach of the European Guarantee Fund (EGF) to tackle the economic consequences of the COVID-19 pandemic. The Fund was endorsed by the European Council as part of the overall EU COVID-19 response package. It will enable the EIB Group to scale up its support for mostly small and medium-sized European companies, providing up to €200 billion of additional financing.
The EIB Group created EGF, a €25 billion fund, in response to COVID-19. This guarantee fund enables the EIB Group – in partnership with local lenders and national promotional institutions – to scale up its support to small and medium-sized companies (SMEs) and others in the real economy by mobilising up to €200 billion, in addition to the support package announced already.
EGF is now operational, following guarantees by EU Member States accounting for at least 60% of EIB’s capital.
As of May 2021, EGF has already approved €11.7 billion, almost half the fund’s target for 2021, in support of European businesses struggling with the economic fallout of the COVID-19 pandemic. The initiatives financed so far are expected to generate €93.9 billion in funding for the EU economy. Find out more
EIB President Werner Hoyer commented: “The EIB Group was among the first off the mark in ensuring Europe helped businesses and citizens deal with the economic fallout of the COVID-19 crisis. Our main effort with EGF is to support EU companies and providing the financing they need to survive the pandemic. These figures show that Europe’s response is making a real difference in record time. They add to the EIB Group’s track record in financing the research and development of treatments and vaccines, which today bring us light at the end of the COVID tunnel.”
The EIB Group has also proposed a financing package that will go towards bridging loans, credit holidays and other measures designed to alleviate liquidity and working capital constraints for SMEs and mid-caps. The EIB Group, including the European Investment Fund, which specialises in support for SMEs, will work through financial intermediaries in the Member States and in partnership with national promotional banks.
The financing package consists of:
- Dedicated guarantee schemes based on existing programmes for immediate deployment. A €1 billion guarantee tranche will mobilise up to €8 billion of SME financing.
- Dedicated liquidity lines to banks to ensure additional working capital support for SMEs and mid-caps of €10 billion;
- Dedicated asset-backed securities (ABS) purchasing programmes to allow banks to transfer risk on portfolios of SME loans, mobilising another €10 billion of support.
All these actions can be implemented quickly to ease liquidity shortages and will be executed in partnership with national promotional banks wherever feasible.
The EIB Group has €8 billion available for investments in the healthcare sector. This is available for medical infrastructure, further research, or other vaccine- and cure-related financing. Since the EIB Group would finance or guarantee parts of projects, it is expected that this €8 billion would mobilise an even higher figure in supported investments.
Additional funding could go to healthcare infrastructure, further research or financing for vaccines and cures. We are also working on making another €5 billion available for coronavirus support to countries around the world - both to support healthcare infrastructure, as well as to maintain access to finance for impacted SMEs.
The EIB Group has announced details of a comprehensive response to the coronavirus pandemic outside the EU that will provide up to €6.54 billion in the coming months. This financing is part of the Team Europe response and supported by guarantees from the EU budget. It will both strengthen urgent health investment and accelerate long-standing support for private sector investment that reflects financing needs in more than 100 countries around the world.
The EIB Group will also provide €1.7 billion to support the social and economic recovery of the Western Balkans from the COVID-19 pandemic, as part of a €3.3 billion financial support package for the region announced on 29 April by the European Commission.
The immediate fast-tracked support will help to sustain jobs and livelihoods in sectors most threatened by the economic and social impacts of the coronavirus, and will be followed by additional long-term health and business financing as needed.
Latest news:
- President Hoyer pledges €1 billion new support for COVAX
- Senegal: Republic of Senegal and Team Europe support agree to build a manufacturing plant to produce vaccines against COVID-19 and other endemic diseases
We are also enhancing our collaboration with the World Health Organisation (WHO) to strengthen public health, supply of essential equipment, training and hygiene investment in countries most vulnerable to the COVID-19 pandemic. This new partnership will help increase resilience to reduce the health and social impact of future health emergencies.
Team Europe is also contributing €500 million to COVAX initiative to provide one billion COVID-19 vaccine doses for 92 low and middle-income countries across Africa, Asia, the Caribbean and Pacific.
The Bank also joined the EU-led global Pledging Conference, contributing €4.9 billion in partnership with the European Commission to end the pandemic.
Our support in a nutshell:
- Accelerated financing and targeted technical assistance for partners in 100 countries as part of the Team Europe response package
- Short-term support for health and business investment in Africa, Eastern and Southern Neighbourhood Countries, Western Balkans, Asia and Latin America
- Increased backing for business impacted by the pandemic
The Rockefeller Foundation and the EIB have announced a global coalition aimed at providing sustainable energy for one billion people by 2030. Find out more
“It is important that Europe and European citizens see solidarity in different forms”
Werner Hoyer, President of the EIB
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