The European Investment Bank, the European Union's long-term financing institution, launched a successor interest subsidy scheme for its loans to Northern Ireland's small and medium sized enterprises in Belfast today. The new scheme was jointly announced by EIB President, Sir Brian Unwin, the Northern Ireland Economy Minister, Adam Ingram, and Northern Ireland Representative of the European Commission, Jim Dougal. Modelled on a successful similar rebate offered in 1996-1997, the rebates are being funded by the Commission and the UK Government.
EIB President Sir Brian said: "We are very glad to be able to launch this new round of the interest rebate scheme for Northern Ireland's small and medium sized businesses. It forms part of the second phase of the European Union's Special Support Programme for Peace and Reconciliation and will help create a more positive investment climate by encouraging SMEs to bring forward new projects and improve employment prospects. The previous rebate scheme was a great success and with the help of the banks, we expect this one to bring forward over £200 million of urgently needed fresh investment in Northern Ireland."
Under the new scheme, SMEs with eligible new capital investment can benefit from a 3% interest rebate over five years. The scheme is targeted at businesses with fewer that 50 employees and located, in particular, in deprived urban and rural areas and implementing a wide range of productive investment in industry and related services, and tourism.
The subsidy will be made available through financial institutions operating EIB global loan arrangements in Northern Ireland. It will be available for new investment starting from 1st May 1998. Arrangements are also being made with the Irish authorities to extend the rebate scheme to include projects in the six Border Counties of Ireland.
The previous rebate scheme, with a 4% interest rate subsidy reached over 250 new projects costing some £400 million and helped to create and secure over 8,000 jobs in Northern Ireland.
The EIB, the European Union's long-term financing institution, was set up in 1958. It provides loan finance for capital investment furthering EU policy objectives. It also finances projects, within certain limits, outside the EU within the framework of the Union's co-operation policy with other countries. Owned by the EU Member States, the EIB raises its funds on capital markets. In 1997, the EIB lent a total of over ECU 26 billion, of which ECU 23 billion in the Member States. 1997 lending in the UK came to ECU 3.8 billion (£2.4 billion) The President of the EIB, Sir Brian Unwin, assumed office in 1993 and is the first British President of the institution.Eligible project cost is between £25 000 and £3.2 million, and the qualifying loans may be up to 50% and usually not below 25% of project cost, with £1 million upper limit on loan benefiting from subsidy. The project should be new, expansion, development or modernisation of an existing business. Priority will also be given to investment helping to create or safeguard jobs; furthering industrial competitiveness and innovation, developing new markets or related to research and development; making a significant contribution to tourism; having a particular commercial linkage to the peace environment; and projects which encourage cross-border co-operation. Wilson Gillespie & Co. are the scheme's managing agents. Participating banks include: Bank of Ireland, Barclays, Equity Bank, First Trust, ICC Bank, Lloyds, Midland, Northern Bank and Ulster Bank.
The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 31/03/1998 1 ECU= 40.97 BEF, 6.65 FRF, 0.64 GBP,0.79 IEP.