The European Investment Bank (EIB) is to support small and medium-scale enterprises and infrastructure projects in Ireland with a EUR 100 million (IE£78.7 million) (1) facility arranged and to be provided through AIB.
The finance will be lent by AIB for capital investment by small and medium-sized industrial and service enterprises (SMEs). In addition the facility will also provide long-term loans (up to 25 years) to finance infrastructure projects in sectors such as transport, energy, environment, urban regeneration, education and health. AIB can use the facility primarily throughout Ireland, but also in the UK and other countries of the European Union.
The loan was signed by EIB Vice President Michael Tutty, and Michael Buckley, Group Chief Executive of AIB, in Dublin.
Commenting on the loan, Michael Tutty said: "This financing arrangement is an important additional facility for Irish businesses and will support an increase in the productive and competitive capacity of SME's. Such investment is crucial for competitiveness as well as for job creation and the continued growth of indigenous local enterprises, particularly in less-developed regions. This global loan reinforces our long standing co-operation with AIB with whom the EIB Group already co-operate on a Venture Capital Infrastructure Fund as well as providing guarantees for SME's through its specialised affiliate the European Investment Fund."
Responding at the signing, Michael Buckley AIB Group Chief Executive said: "The timing and the features of this particular tranche of funding is appropriate. Currently the National Development Plan is being rolled out throughout the country and in AIB we expect that there will be a demand for keenly priced, medium to long-term fixed rate funding to support capital investment in Ireland's infrastructure. This new tranche of funding will also augment our existing product range for business customers and expand the range of interest rate options. We will be evaluating demand for attractive, long-term fixed rate funding for our customers and we anticipate having to negotiate for further tranches from EIB in the future".
The EIB is owned by the Member States of the European Union. It was set up in 1958 to finance capital investment furthering EU policy objectives, and, though a not for profit organisation, it is self-financing, raising its funds by borrowing on capital markets.The EIB's key policy objectives are financing: regional development; the trans-European networks in transport, telecom and energy; knowledge and R&D intensive industries; improved international competitiveness of industry, small and medium sized enterprises, environmental protection, secure energy supplies and health and education. It also provides finance outside the EU within certain limits as part of the EU's external relations policy.
(1) 1 EUR = 0.787564 IEP, 0.638700 GBP