The European Investment Bank (EIB) is accelerating two of the priorities defined by its shareholders by financing climate action and innovation in France. The EU bank, owned by the EU Member States, has gradually signed a number of loans with top-tier financial partners, making it possible to mobilise at least EUR 1.7bn in financing for the energy transition projects of SMEs and local authorities.
There are two different kinds of investment:
- Direct loans and guarantees granted to banking institutions with favourable rates:
- EUR 450m agreement with HSBC France. This comprises a EUR 250m EIB credit line to HSBC France, enabling HSBC's French subsidiary to lend up to EUR 500m to SMEs and mid-caps with favourable rates. In addition, the European Investment Fund (EIF) – the EIB subsidiary responsible for SME financing – has granted a EUR 200m guarantee under the EU's InnovFin programme. Most of the projects to be financed will be energy transition-related.
- An initial EUR 250m tranche to Groupe Crédit Agricole SA, enabling it to provide EUR 500m in financing to SMEs, mid-caps, public entities, farms and local authorities for their investments in combating climate change. This should be complemented by a second tranche for the same amount when the loans from the initial tranche have been used, making it possible to finance energy transition projects to the tune of EUR 1bn in total.
- Equity investments in funds dedicated to the energy transition, supporting leading players:
- Investment in the Pearl Infrastructure fund, co-managed by Edmond de Rothschild and Pearl Advisory. This fund has raised EUR 162m in subscriptions from a diverse range of institutional investors, including EUR 30m from the EIB and EUR 30m from the Caisse des Dépôts et Consignations (CDC). The EIB operation falls under the European Fund for Strategic Investments (the Juncker Plan) and aims to finance infrastructure with a climate-related dimension connected to energy savings or wastewater recycling.
- A EUR 50m equity investment in the Breakthrough Energy Ventures Europe fund bringing together the European Commission, EIB and Breakthrough Energy (led by Bill Gates). The announcement was made at the inter-ministerial conference on innovation that took place in Vancouver on 28 and 29 May 2019. With an initial EUR 100m in resources, this fund will finance innovative, high-risk operations enabling breakthroughs in the clean energy sector.
“This series of operations over several days clearly shows our strategic priorities: financing innovation and the environment,” said EIB Vice-President in charge of innovation Ambroise Fayolle. “They also illustrate our conviction that combating climate change must involve close cooperation between the public and private sectors, making it possible to mobilise large amounts of capital to meet the challenges.”
More information on these operations
HSBC INNOVFIN press release
PEARL press release
Breakthrough fund press release