One finance facility for projects in the field of research, development and innovation and another for PPP infrastructure projects
The European Investment Bank (EIB) and KfW IPEX-Bank are offering two new finance facilities. The first is open to research, development and innovation projects and the second is available for infrastructure expansion within Germany through public-private partnerships (PPP). The corresponding agreements were signed in Luxembourg on Monday. The finance facility for research, development and innovation will provide funds of EUR 200 million for investments by innovative small and medium-sized enterprises that would otherwise have difficulty accessing the capital market.
The second facility of EUR 100 million will support PPP for municipal investments in the areas of education, health care, the environment and other infrastructure. Under both facilities investments can be financed for up to 50% of cost. The individual loan amount must be between EUR 10 million (minimum) and EUR 25 million (maximum). The 15 maximum loan term is 15 years.
At the signing of the agreements Markus Scheer, member of the Board of Managing Directors of KfW IPEX-Bank, called attention to the relevance of infrastructure projects and particularly to the necessity of supporting innovative SMEs. "Investments that finance research, development and innovation are immensely important for the further development of Europe as a business location. Here KfW IPEX-Bank can apply its know-how as a specialised financing institution. We are glad that the cooperation between both banks has intensified to the benefit of the European economy."
Dr Kollatz-Ahnen, EIB Vice President, underscored this: "In the facility promoting research, development and innovation we are sharing the default risk with KfW IPEX-Bank, which enables us to finance riskier investments by SMEs in both R&D and innovation. In this way we are helping to improve the companies' competitiveness. We sincerely hope that the application of the PPP concept will quickly become widespread in Germany so that the goal set by the Federal Minister of Finance Peer Steinbrück of making 10-15% of infrastructure investments through PPP models can be attained. We are pleased about our intensified cooperation with KfW in these key areas of financing."
About the European Investment Bank (EIB)Shareholders of the European Investment Bank are the 27 EU Member States. The EIB, whose annual lending adds up to approx. EUR 48 billion, is responsible for supporting the economic goals of the European Union by granting long-term loans at favourable conditions for economically feasible investments. Along these same lines the EIB also backs the EU's Lisbon Agenda, which aims to make Europe's economy the most competitive in the world. Especially for this purpose the EIB joined forces with the European Commission to create the Risk-Sharing Finance Facility (RSFF), which funds R&D and innovation up to a total volume of approx. EUR 10 billion through 2013. The Commission and the EIB share the assumed risks, enabling the EIB to bear higher credit risks.
About KfW IPEX-Bank GmbH
Within KfW Bankengruppe KfW IPEX-Bank is in charge of project and corporate financing as well as trade and export financing both in Germany and abroad. It combines all worldwide lending activities that do not fall under the promotional business of KfW Bankengruppe but compete with other financial service providers. KfW IPEX-Bank began operating as a legally independent subsidiary as at 1 January 2008. It has some 420 staff (as at the end of 2007) and will successively take charge of KfW's representative offices in London, New York, São Paulo, Bangkok, Beijing, Istanbul and Moscow. Plans to open additional offices in Mumbai, Abu Dhabi, Johannesburg and Singapore are underway.