The €25 billion guarantee fund will be funded by EU Member States pro rata to their shareholding in the EIB and/or other institutions.
Thanks to the guarantee, the EIB Group will be able to provide existing products to local banks and other financial intermediaries, who are in close contact with businesses in all Member States and can unlock financing to the real economy, without risking financial instability.
The guarantee will support different types of operations of the European Investment Bank, and its subsidiary, the European Investment Fund:
- Guarantee instruments to commercial banks and national promotional institutions
- Guarantees to national guarantee schemes
- Counter-guarantees to national promotional institutions
- Support for SMEs and mid-caps funded by venture capital funds
- Purchases of asset-backed securities from banks, so they can provide more new loans to SMEs
- Venture debt to high-growth companies, including companies active in the pharmaceutical sector
By guaranteeing parts of portfolios, our operations under the guarantee fund will free up capital for the financial intermediaries involved to make more financing available for SMEs and mid-caps. Thus, we have calculated that up to €200 billion will become available.
The guarantee fund will provide guarantees to the EIB and EIF to reimburse any possible losses incurred for included operations. By pooling credit risk across all of the European Union, the overall average cost of the fund will be significantly reduced, compared to national schemes.
The use of the EIB also means that all Member States will benefit from the sharing of the bank’s top-level credit rating.