Germany: Covestro signs EUR 225 million loan facility with EIB for R&D activities
26 March 2020
Covestro has agreed a loan with the European Investment Bank (EIB) for EUR 225 million. The loan will provide medium term funding to strengthen Covestro’s research and development (R&D) work in the areas of sustainability and circular economy within the European Union.
Discussions with EIB started end 2019 to identify R&D projects which would be compatible with the financing requirements of the EIB. These require that funding is applied to projects which meet high standards of technical, ecological and social responsiblility.
„The core of our R&D activity is innovation” said CFO Dr. Thomas Toepfer. „This loan provides us with additional financial flexibility to push forward our strategic focus in the areas of sustainability and the circular economy.”
EIB Vice-President Ambroise Fayolle, responsible for the Bank's operations in Germany and innovation, said: “In times when Member States and EU institutions are putting in place multi-billion euro programmes in response to the crisis caused by COVID-19, it is also important to demonstrate that we are continuing our regular business in support of companies. I am therefore very pleased that we have just signed this loan with circular economy pioneer Covestro, as support for the climate and environment is among the EIB's top priorities.”
In autumn 2019, Covestro published a global strategic program to establish the theme of circular economy throughout all areas of the company. The main principles are to improve recycling from plastic waste, alongside the development of innovative technical and production methods in the use of alternative raw materials.
The EIB loan provides a further commitment of Covestro to sustainability. It complements the recently announced syndicated revolving credit facility, whose interest rate is linked to the company’s Environment, Social Governance (ESG) rating.
With 2019 sales of EUR 12.4 billion, Covestro is among the world’s largest polymer companies. Business activities are focused on the manufacture of high-tech polymer materials and the development of innovative solutions for products used in many areas of daily life. The main segments served are the automotive, construction, wood processing and furniture, and electrical and electronics industries. Other sectors include sports and leisure, cosmetics, health and the chemical industry itself. Covestro has 30 production sites worldwide and employs approximately 17,200 people (calculated as full-time equivalents) at the end of 2019.
The EIB and AM-Pharma B.V. have signed a EUR 24m financing agreement to accelerate the development of the innovative Dutch clinical stage biopharmaceutical company’s recombinant alkaline phosphatase enzyme (recAP), used to treat acute kidney injury (AKI). The financing will support a multi-national ‘phase III trial’ of recAP in 1,400 patients with sepsis-associated-acute kidney injury (SA-AKI). It also allows the Company to fund the steps required to submit market authorization applications following the trial’s completion. The EIB’s financing is supported under the “Infectious Diseases Finance Facility” (IDFF) of the InnovFin programme under the EU’s research and innovation programme Horizon 2020.
The EIB has signed a €480 million loan agreement with LG Chem Wroclaw Energy, the Polish subsidiary of the LG Chem Group that was established to develop the group’s battery production facility in Europe. The financing will be used for the construction and operation of highly automated and innovative manufacturing facilities for advanced lithium-ion (li-ion) cells and batteries for battery-powered electric vehicles (BEVs). The EIB financing will cover around a third of the total project costs, estimated at €1.5 billion. The remainder will come from the company’s own resources and from other financing sources.
New initiative to strengthen innovation, competitiveness and entrepreneurship, Funding agreement signed in Athens by Hellenic Republic and European Investment Fund, Scheme to support new business investment over the next 4 years