The European Investment Bank (EIB), the European Commission and HVB Bank Hungary Rt. are cooperating to support SMEs in Hungary in the framework of the SME Finance Facility a special scheme promoted by the European Commission under the PHARE Program.

Under this agreement, up to EUR 20 million from existing EIB global loans (credit lines) to HVB Hungary will be channelled to selected SMEs, for financing industrial, environmental, energy, infrastructure, tourism, health, education and service projects. The EU Commission is supporting the scheme with financial incentives in the hope to facilitate the financing of SMEs and to improve their competitiveness.

Commenting on the tripartite cooperation, EIB Vice President Wolfgang Roth said: The EIB is lending to domestic and foreign direct investors alike in Hungary. Cooperation with an experienced partner such as HVB Hungary should help kick off many deals with positive long-term effects in terms of international competitiveness and EU-integration of the Hungarian industry. The participation of the European Commission in the new scheme also helps create a favourable environment for the development of a solid SME sector in the new EU Members.'

Global loans are credit lines to selected partner banks of the EIB, which on-lend the funds at their own risk and terms to small and medium-scale investment projects meeting EIB's lending criteria. Long-term global loans allow the partner banks to increase and diversify their long-term funding sources and to step-up their financing. The availability of several partner banks in most future EU Members leads to a healthy competition and better service as well as lower financing costs for the SMEs.

The European Investment Bank, the financing arm of the European Union, finances projects which help implement EU policy in the present and future EU countries as well as in a number of developing nations around the world. In 2002, the Bank granted loans totalling EUR 39.6 billion, of which 3.6 billion in the future Member States. The EIB is re-financing its lending by issuing bonds on the international capital markets. Due to its 'AAA' credit rating it is able to raise funds at the keenest terms. Being a non-profit institution, the Bank passes on these terms to public and private project promoters as well as partner banks. Since 1990 the EIB has lent some EUR 20 billion in Central- Eastern Europe and has become the region's most important external source of finance. Of about EUR 2.8 billion lent in Hungary so far, more than EUR 800 million were provided in the form of global loans.