>@EIB

Another EUR 1bn from the EIB to the MEF for the reconstruction of public buildings

Overall, EUR 5bn of funding raised by the EIB and CDP for reconstruction

EUR 1bn is being provided to families and businesses for private reconstruction efforts in the areas of central Italy hit by the 2016 earthquake. To provide the funds, MEF is borrowing from the European Investment Bank (EIB), which has more advantageous interest rates. The EIB will, in turn, transfer the funds to Cassa Depositi e Prestiti (CDP) which through the banking system will onlend them to families and businesses.

Today in Rome EIB Vice-President Dario Scannapieco and the CEO of CDP Fabio Gallia signed the finance contract making the funds available immediately for private reconstruction.

The agreement was signed at the Ministry of Economy and Finance in the presence of Minister Pier Carlo Padoan and the Government’s Special Commissioner for Reconstruction following the 2016 earthquake, Vasco Errani, who also signed a Service Agreement with the EIB in order to ensure that the funds are actually deployed for reconstruction.

The funds will be used to cover the cost of rehabilitation and to ensure that the damaged homes, businesses and manufacturing facilities (e.g. warehouses, sheds, capital equipment, stocks, etc.) comply with safety regulations.

The EUR 1bn that the EIB and CDP have made available today is part of the overall figure of EUR 5bn of financing operations already approved by the Board of Directors of both institutions for post-quake reconstruction in central Italy. Specifically, CDP allocated EUR 4bn in support of the private sector (families and businesses), of which EUR 1bn is being provided by the EIB via today's operation. The EIB also agreed to lend a further EUR 1bn directly to MEF for the reconstruction of public buildings (schools, hospitals, courthouses, administrative offices, etc.) and that loan will be signed shortly.

Minister Padoan thanked the EIB and CDP for their willingness to provide funding and stated that “thanks to the cooperation between the different institutions a substantial figure will soon be made available to families and businesses for reconstruction and for ensuring that the damaged homes and manufacturing facilities comply with safety regulations. The State is strongly committed to rebuilding schools, hospitals and public buildings in general with the aim of swiftly helping the communities stricken by the earthquake to return to normality.”

The Government’s Special Commissioner for Reconstruction, Vasco Errani, expressed his satisfaction that “the EIB is placing a huge amount of trust in Italy and the country’s ability to meet and overcome the challenge of reconstruction. It is also a tangible sign of support from Europe's largest financing institution for the people affected by the earthquake. Thanks to this agreement between the EIB and Cassa Depositi e Prestiti, substantial funds have been made available to the Italian Government to support families and businesses. We have always said that the Government and the Parliament have provided the broadest financial coverage to launch and make progress with the reconstruction of the areas in central Italy damaged by the earthquake and this agreement provides further confirmation of that commitment.”

EIB Vice-President Scannapieco stated that “with this operation EUR 1bn will go to families and businesses for reconstruction and a further EUR 1bn will soon be provided for the restoration of public buildings. The EU bank, thanks to its collaboration with MEF and CDP, is thus helping to support the people affected by the earthquake who wish to return to normality as soon as possible.”

CEO of Cassa Depositi e Prestiti Gallia stressed that “with the agreement signed today, CDP is stepping up its commitment in support of families, businesses and local bodies hit by the earthquake. We have earmarked more than EUR 4.5bn to rebuild damaged buildings and provide greater financial flexibility to bodies and businesses, enabling them to defer their payment of rates and taxes. All this was made possible thanks to our collaboration with MEF and the EIB, which enabled us to leverage national and EU resources.”

Today's EIB loan to CDP is based on the tax credit facility, previously tried and tested in the case of the Emilia earthquake in 2012, and it offers twofold benefits: on the one hand, it makes banks’ resources immediately available whilst it will also save the nation’s coffers nearly EUR 200m over a 25-year period. This saving is calculated on the basis of the EIB's favourable interest rates.

In particular, the structure of the operation contains a number of provisions:

  • the EIB will provide EUR 1bn to CDP in accordance with an agreement signed with Associazione bancaria italiana (ABI) in November 2016; CDP will then onlend the funds to banks operating in Italy;
  • families and businesses shall contact bodies responsible for certifying the damage suffered and the corresponding sum before presenting at their bank branch the document confirming that work needs to be carried out and how much that work will cost;
  • the bank will receive the amount indicated from CDP and, on the basis of the work’s progress, will pay the sums directly to professionals and companies charged with planning and performing the work;
  • when the banks pay back the loan, they will receive a tax credit from the Government for the same amount, which they will collect over a 25-year period.