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UniCredit and the European Investment Bank (EIB) have agreed to provide new resources aimed at stimulating the recovery of the pandemic-hit economy.

They have just signed an agreement that will see the EIB allocate €200 million to UniCredit to lend on to SMEs (companies with up to 250 employees) and mid-caps (up to 3 000 employees).

The new credit line is designed to tackle the current emergency and can be used to fund new investment projects over periods of up to five years and to cover working capital needs in light of this extraordinary period for the Italian economy.

The funding is intended for companies all over Italy and in all production sectors: agriculture, handicrafts, industry, commerce, tourism and services.

The EIB funds can be used for projects with individual costs of up to €25 million. They may cover 100% of the project costs, provided that these do not exceed €12.5 million.

UniCredit and the EIB have agreed to apply extraordinary eligibility criteria to this credit line for companies.

Specifically, the loans can be used to finance working capital, including salaries, taxes, pension contributions, and administrative and other operating costs, provide multifunctional credit lines, and even extend or renew existing working capital financing. Only purely financial and/or property transactions are excluded.

The credit line complements the support provided by the Italian Liquidity Decree, meaning that the EIB funds can be combined either with the direct guarantee from the SME Guarantee Fund or from SACE (the Italian agency for exports and internationalisation), with obvious benefits when it comes to final pricing.

The new agreement between UniCredit and the EIB follows on from a series of recent deals to support SMEs, mid-caps and agricultural businesses in Italy.

In the last five years, UniCredit has channelled about €5 billion in EIB funding to Italian companies, financing more than 4 000 projects.