The European Investment Bank (EIB) and BNP Paribas Fortis have concluded a partnership agreement concerning a EUR 150m new-generation EIB loan for Belgian SMEs. Branches of the Fortis network will act as the financial intermediaries for the EIB funds, passing them on as loans to small and medium-sized enterprises to support their investment projects. The procedures and information relating to this operation will be put in place this summer.

This EIB Loan for SMEs takes the form of a credit line that BNP Paribas Fortis will onlend to small businesses with fewer than 250 employees across a wide range of economic sectors eligible for EIB financing. The projects, financed up to a maximum of EUR 25m each, will have to be carried out in the European Union and be aimed at growth.They may not consist of refinancing or purely financial or property transactions.

This new EIB lending formula for SMEs is designed to be more flexible and more transparent, particularly in terms of the information provided to businesses. It will ensure that the final beneficiaries – Belgian SMEs – benefit from the advantages of EIB funding, mainly in the form of lower interest rates, and they will be explicitly informed of this.

At the contract signing ceremony on 24 July in Brussels, Jean-Laurent Bonnafé, CEO of BNP Paribas Fortis stated, “At a time when access to liquidity has become key to banking, it is important that we can benefit from the support of institutions such as the EIB, as a complement to our other sources of finance. This agreement will enable us to pass on very rapidly to our customers the favourable credit conditions that have been granted to us”.

Philippe Maystadt, EIB President, underlined “the importance – particularly in a downturn – of maintaining the flow of financing to SME projects, without which a very large section of a country’s economic activity is in danger of being suffocated”.

The EU Heads of State and Government asked the EIB to step up, modernise and diversify its lending to the SME sector in order to help small businesses weather the financial crisis. The Bank responded immediately with a broader programme that will be further developed in the coming months. “We have provided this new type of loan for SMEs in 22 EU countries in a few months and I welcome this first partnership to assist Belgian SMEs through the BNP Paribas Fortis network with its experienced staff”, the EIB President announced.

With this agreement, BNP Paribas will now contribute to the development projects of its customers in three of its European domestic markets. The BNP Paribas group has already benefited from EIB refinancing agreements in France through BNP Paribas and in Italy through BNL. In October 2008, for example, BNP Paribas introduced in France the first “EIB Loan for SMEs” under the programme to support funding for SMEs initiated by the EIB.

In total, the EIB has now made EUR 6.7bn available to SMEs in the EU countries since October 2008 through 66 operations under its programme of “EIB Loans for SMEs”, significantly improving the way in which the EU’s long-term lending institution supports small and medium-sized firms.

Background information:

The EIB - the European Investment Bank - is the long-term lending arm of the European Union, and is wholly owned by the 27 EU member states. Its mission is to support through its activities the development of EU policies. It borrows funds on the capital markets (with an AAA rating) in order to finance on the keenest terms projects that are in line with EU strategies. In 2008 the EIB signed loans totaling EUR 57.6 billion; EUR 51.5 billion was for projects within the European Union. The EIB loans contribute chiefly to economic and social cohesion, environmental protection, research and innovation, support for SMEs, the development of trans-European transport and energy networks, and sustainable, competitive and safe energy.

About BNP Paribas
BNP Paribas (www.bnpparibas.com) is one of the 6 strongest banks in the world according to Standard & Poor's. With a presence in 85 countries and more than 205,000 employees, 165,200 of which in Europe, BNP Paribas is a global-scale European leader in financial services. It holds key positions in its three activities: Retail banking, Investment Solutions and Corporate & Investment Banking. The Group benefits from its four domestic markets: Belgium, France, Italy and Luxembourg. BNP Paribas also has a significant presence in the United States and strong positions in Asia and the emerging markets.