The EIB Vice-President Michael G. Tutty and Declan McSweeney, Chief Financial Officer of the AIB Group, signed a EUR 150 million facility in Dublin today. AIB will handle the funds, in the form of a global credit facility, which they on-lend to individual SMEs. AIB is the largest provider of banking services to the small and medium-sized business sector in Ireland.
The loan is targeted for financing capital investment projects undertaken by SMEs in industry and service sectors, with the aim of generating growth and employment by increasing their productivity and competitiveness. AIB is a long-standing EIB global loan intermediary. This loan brings the total amount of the global loans to AIB over the last 5 years to some EUR 460m.
Commenting on the loan signed today Michael G. Tutty said:
"EIB Global Loans represent a well established tool to support SMEs. We are delighted to increase the joint EIB/AIB financing of the SME sector which plays such a significant role in creating jobs and developing the economy, particularly so in the less-developed areas of Ireland and Northern Ireland. Our relationship with AIB is very substantial including also infrastructure financing through the First Irish Infrastructure fund.
During the loan's signature Mr. McSweeney said:
Through EIB funding we can now offer an extended range of term lending options and an expanded range of rate options which are particularly suited for small and medium-sized business borrowers involved in long term capital intensive projects. He added that the new tranche of funds was in addition to six other loan agreements that had been co-signed with the European Investment Bank stretching back to 1993
EIB Global Loans are special credit lines to selected partner banks operating in the individual countries. The scheme is a well-proven instrument for supporting investment of SMEs. The EIB finances small and medium-size projects with a total investment costs between EUR 40,000 and EUR 25 million via its Global Loans. EIB partner banks, that are to be addressed directly by investors, assess each project, assume the credit risk and set the loan conditions for the final beneficiary.
The EIB is owned by the EU Member States. Set up in 1958, its mission is to contribute to the EU's policy objectives by financing sound investment. Though a not-for-profit organisation, it is self-financing, raising its funds by borrowing on capital markets.
EIB's key operational objectives are to finance: regional development and economic and social cohesion of the EU, including integration of future Member States; knowledge and R&D intensive industries; environmental protection and improvement; improved international competitiveness of industry; SMEs; trans-European networks in transport, telecom and energy; human capital: education and health. EIB also supports the EU's development and co-operation policies in Partner Countries outside the EU by providing finance under mandate.
The European Investment Fund (EIF), in which the EIB has a majority stake, is the EU specialised vehicle providing venture capital and guarantee instruments, mainly for small and medium sized enterprises.