The European Investment Bank (EIB) granted a global loan (credit line) of EUR 100 million to HVB Bank Czech Republic a.s. (HVB Bank) for financing small and medium-scale projects in the fields of industry, tourism and other services, environmental protection, energy saving, as well as health, education and other infrastructure undertaken mainly by SMEs and local government. This is the largest EIB global loan ever granted to a partner bank in the Czech Republic. HVB Bank will use the funds to finance projects with total investment ranging from EUR 40,000 to EUR 25 million with durations of four years or more.
Favourable terms and conditions such as maturity of eight years, effective interest rate around PRIBOR and flexible currency and cash flows structures should further enhance HVB Bank's liquidity position enabling it offer competitive long-term financing on a growing scale. HVB Bank will apply its standard credit analysis and approval procedures to individual loan applications.
The new global loan to HVB Bank is an important step in EIB's strategy to substantially raise its support for SMEs and smaller scale infrastructure in the Central European Accession Countries. It brings the total amount of EIB financing in the form of global loans in the Accession Countries since last July to EUR 318 million. In Hungary, HVB Bank received EUR 80 million, Raiffeisenbank EUR 35 million and Inter-Europa Bank (San Paolo IMI group) EUR 20 million, in Bulgaria and Romania the local subsidiaries of HVB group received EUR 20 million each, in Poland EUR 33 million went to BRE Bank (affiliate of Commerzbank) and in the Baltic States Swedbank's Hansabank received EUR 30 million.
Commenting on the strong development of EIB lending to SMEs in the Accession Countries, EIB Vice-President Wolfgang Roth said: 'For forty years we have worked closely with selected banks inside the EU to bring EIB finance to smaller-scale projects in the present member states. As many of these banks are now present in the Accession Countries, we systematically cooperate with them for channelling similarly advantageous funds to SMEs and local authorities also in the Accession countries.'
The EIB was set up in 1958 under the Treaty of Rome to lend to projects furthering European Union policies. While strengthening weaker EU regions has always been its main goal, the Bank also lends to projects outside the European Union under the Union's co-operation policy toward third countries. Since 1990, some EUR 15 billion were lent to projects in the ten Central European countries which have applied for EU membership. Owned by the Member States, the EIB raises the bulk of its funds on the capital markets worldwide where its bond issues regularly benefit from the Bank's 'AAA' credit rating. In Central Europe as in the EU, the EIB finances large projects with direct loans and smaller schemes through global loans, using the network of more than thirty partner banks. EIB has already committed EUR 2 billion in the form of global loans for financing SMEs and small infrastructure projects in the ten Accession countries, which represents 14% of the Bank's total commitments in the region.