The European Investment Bank (EIB) is providing a EUR 20 million loan to TATRA Banka for financing projects promoted by small and medium-sized companies in their areas of entrepreneurship (e.g. services, including tourism) and schemes undertaken by municipalities aimed at improving environmental protection, fostering the rational use of energy and developing municipal infrastructure.
The loan takes the form of a credit line to TATRA Banka, which will on-lend the EIB funds to SMEs and municipalities to promote projects with total costs from EUR 40 000 to EUR 25 million while utilising its knowledge of the local market and extensive network of branches in Slovakia.
In addition, this loan will - in combination with EU grants - provide financial incentives to promoters to accelerate the development of smaller municipal infrastructure projects in the Slovak regions bordering Austria, i.e. the regions of Bratislava and Trnava. The EIB supports the investments of SMEs representing about 99% of all companies in Slovakia, as this sector contributes significantly to economic growth (currently accounting for some 40% of Slovakia's GDP) and provides approximately 70% of all job opportunities in the country.
The current loan brings the number of financial intermediaries on-lending EIB funds in Slovakia to nine. This will contribute to an increase in competition in this segment of the market with positive implications for customers.
The prime objective of the EIB, the European Union's financing institution, is to contribute towards the integration, balanced development and economic and social cohesion of the Member States by financing sound investment. Outside the Union, the EIB supports European development aid and cooperation policies.
In total, the EIB has provided about EUR 350 million for the implementation of smaller projects of SMEs and municipalities in Slovakia, representing some 20% of overall EIB lending in that country since 1990 (EUR 1.8 bn). Almost one third of EIB lending extended in Slovakia has gone to the transport sector. Major projects co-financed by the EIB in this field include the construction of the Kosicka Bridge over the Danube River in Bratislava, upgrading of track, rolling stock and telecommunications for national railways and implementation of the Slovak Motorway and Expressway Programme. The Bank also co-finances projects with foreign investors (e.g. extension of the Volkswagen plant in Bratislava) and undertakings improving the environment (water treatment and development of the sewage network, solid waste treatment, etc.)