The European Investment Bank (EIB) and Piraeus Bank (PB) are joining forces for the first time. The aim is to support small and medium-sized enterprises (SMEs), small and medium infrastructure investments to be carried out by private or public bodies, including the local authorities, as well as beneficiaries of any size, for investments in the fields of knowledge economy, energy and environmental protection in Greece. To this end, the EIB is making available to Piraeus Bank EUR 150 million, which PB will on-lend in smaller portions to final beneficiaries carrying out EIB eligible projects.
Piraeus Bank has a broad experience with the Greek SME sector and the funds under this new line of credit will be primarily targeted towards SMEs in tourism, industry and related services as well as infrastructure, environmental-protection and energy-saving small and medium size investment schemes located throughout Greece. EIB involvement is expected to generate positive effects for the underlying investments in view of the availability of longer maturities and given the Bank’s attractive funding.
EIB Vice-President, Plutarchos Sakellaris commented at the signature ceremony in the presence of Piraeus Bank’s Chairman Michalis Sallas: “I am most happy that one of the first finance agreements I sign after my appointment at the EIB, is EIB’s first cooperation with Piraeus Bank. SMEs are a local business requiring direct access to financial partners, like Piraeus Bank, with high-quality local and sector information and the ability both to monitor changing demands closely and adequately evaluating project proposals”.
Lines of credit combine the advantages of the EIB's first-rate access to world capital markets, where it raises most of the funds for its lending activity, with the local network and know-how of domestic partner banks.
At the request of European Union finance ministers meeting in Nice (Sept. 12-13 2008), the EIB will modernise and increase significantly its volume of lending to small and medium-sized enterprises in 2008 and 2009 to help mitigate the effects of the current credit crisis.
Ministers agreed the Bank should target loans to SMEs totalling EUR 15 billion over the two year period as part of a global envelope of EUR 30 billion. This level of lending would represent an increase of around 50 percent compared with 2007, when the Bank lent EUR 5.2 billion to SMEs via its network of partner banks in the EU.
While in Athens EIB Vice-President, Plutarchos Sakellaris signed also finance agreements totalling EUR 500 million with Attiko Metro’s Chairman Mr. George Yannis, for the Athens Metro B project consisting of the design, construction and commissioning of 6 extensions to lines 2 and 3, and the design, construction, testing and commissioning of the first phase of the Thessaloniki Metro system.
Background information:
The European Investment Bank, (EIB), the Bank promoting European objectives and financing European projects, provides capital investment aimed at modernising the economies of the Member States and the countries close to the Union. In 2007, the EIB lent a total of EUR 47.8 billion. Finance for the then EU-27 Member States represented 87% of its activities and amounted to EUR 41.4 billion. To fund its activities, the EIB raised an aggregate amount of EUR 55 billion on the international capital markets through 236 bond issues in 23 currencies. Owned by the Member States, the EIB (with its AAA rating) is the world’s largest supranational issuer. It has been created by the Treaty of Rome along with other European Union Institutions, and celebrates this year its 50th anniversary. The Bank’s priority objectives include:
- EU cohesion and convergence
- Small and Medium Sized companies (SMEs)
- Environmental sustainability
- EU economy transformation into a knowledge based economy-Lisbon Agenda-Initiative 2010(i2i)
- Trans-European Networks (TENs) for transport and energy
- Secure, sustainable and competitive energy supplies
In 2007, EIB’s lending totalled EUR 47.8 billion, of which EUR 0.8 billion in Greece. Lending in Greece was for transport, SMEs and for the first time ever in Greece for local authorities (Municipality of Athens and Kozani).
There are some 23 million SMEs in the European Union (EU), accounting for over 99% of all enterprises and contributing up to 80% of employment in some industrial sectors. The EIB Group’s SME activity benefited more than 162 000 SMEs in 2007, with a specific focus on innovative SMEs with high growth potential, small renewable energy schemes promoted by SMEs, and micro-enterprises. EIB support was provided through lines of credit totalling some EUR 5 billion, granted to its intermediaries throughout the European Union.