The agreement will enable ICO to expand its lending capacity for mid-caps
The EUR 200m guaranteed by the EIB under a risk sharing facility has Juncker Plan support
Impact on jobs: the platform is expected to benefit companies employing almost 26 000 people
The European Investment Bank (EIB) and the Instituto de Crédito Oficial (ICO) are joining forces to mobilise up to EUR 1.12bn in financing for Spanish mid-caps (companies with between 250 and 3 000 employees). To this end, EIB Vice-President Emma Navarro and ICO Chairman José Carlos García de Quevedo signed an agreement today in Madrid enabling the creation of a specific investment platform for these mid-cap companies via a risk sharing facility. The platform will mobilise private capital through syndicated loan agreements with financial intermediaries.
In concrete terms, the EIB will take on the risk of a portfolio of up to EUR 400m generated by ICO together with the commercial banking sector, which will provide at least 50% of the financing. This means that the financing volume provided for mid-caps via this agreement will total EUR 800m. Added to this is the contribution from the mid-caps themselves, which brings the expected total mobilised financing to EUR 1.12bn. This EIB risk sharing guarantee was signed under the Investment Plan for Europe. Juncker Plan support makes it possible to take on higher risks and improve the financing conditions offered to mid-caps, which will have access to longer maturity periods for developing their investments. The companies benefiting from this risk guarantee will be able to receive between EUR 8m and EUR 12m from ICO.
The aim of the agreement is to help provide Spanish mid-caps with access to the necessary resources to become innovation and sustainability leaders, enabling them to continue to grow and create jobs. The EIB calculates that the businesses able to benefit from this investment platform employ a total of 26 000 people.
At the signing ceremony in Madrid, EIB Vice-President Emma Navarro said: “This new investment platform is an excellent example of how the EIB-ICO partnership, with Juncker Plan support, is making it possible to develop innovative financial instruments able to drive economic growth by mobilising private investment. We are delighted to be signing a very positive agreement for the financing of mid-caps, which are essential vehicles for job creation and to boost the production capacity of the Spanish economy.”
European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: "Thanks to this investment platform, Spanish medium-sized businesses will get the funding they need to grow and create jobs in the country. Raising investment to boost employment in Spain and throughout Europe has always been at the heart of the Investment Plan. I congratulate Spain on being among its top beneficiaries with over €46 billion of additional investments mobilised."
ICO Chairman José Carlos García de Quevedo added: “This agreement once again highlights the importance of the partnership between our institutions and strengthens ICO's role as a catalyst for EU funds, with the aim of driving the growth of Spanish businesses by helping to create and structure varied sources of financing.”
The EIB is joining forces with the Instituto de Crédito Oficial (ICO) and PSA Financial Services Spain, E.F.C., S.A. (PSA Finance) to support Spanish small and medium-sized enterprises (SMEs) and mid-caps affected by the coronavirus crisis. To this end, the EIB and ICO will subscribe several tranches of a securitisation of a loan portfolio originated by PSA Finance, a joint venture between Banque PSA Finance (50%) and Santander Consumer Finance (SCF) (50%) focused on vehicle financing. The EU bank will provide €250 million while ICO will contribute €100 million.
The EIB will provide up to €20 million to finance the research, development and innovation (RDI) strategy of PROSOL, a family business that manufactures and distributes coffee products such as instant (soluble) coffee and single-serving products (capsules). This financing comes under the European Fund for Strategic Investments, which enables the EIB Group to offer increased support for investments fostering innovation, economic growth and employment.
The EIB is joining forces with Santander to provide financing on favourable terms to the Spanish small and medium-sized enterprises (SMEs) and mid-caps affected by the economic impact of COVID-19. To this end, the EIB and the European Investment Fund (EIF) will subscribe several tranches of a synthetic securitisation of a SME loan portfolio originated by Banco Santander, enabling the Spanish bank to provide more than €900 million of financing to inject liquidity and support SME investments.