The €24.4 billion European Guarantee Fund, part of an initial EU COVID-19 recovery package to be deployed within 2021, is about to hit halfway mark
€11.7 billion in financing to support businesses around the EU in COVID-19 pandemic
Approved funding is expected to mobilise nearly €94 billion
The European Guarantee Fund (EGF), part of the €540 billion EU recovery package agreed in 2020, has approved funding amounting to almost half its target for 2021. After clearance under the EU state aid notification process in December 2020, the initiative has now approved €11.7 billion in support of European businesses struggling with the economic fallout of the COVID-19 pandemic. This is almost half the fund’s target for 2021. The fund mobilises additional financing, and initiatives financed so far are expected to generate €93.9 billion in funding for the EU economy. With €2.1 billion in financing also signed at the end of April, EGF funding is already reaching businesses across the European Union.
“The EIB Group was among the first off the mark in ensuring Europe helped businesses and citizens deal with the economic fallout of the COVID-19 crisis. Our main effort with EGF is to support EU companies and providing the financing they need to survive the pandemic”, said EIB President Werner Hoyer. “These figures show that Europe’s response is making a real difference in record time. They add to the EIB Group’s track record in financing the research and development of treatments and vaccines, which today bring us light at the end of the COVID tunnel”, President Hoyer added.
With agreements signed in nearly all of the 22 participating EU countries, including sizeable deals with Nordea, Raiffeisen and Banca March, the EGF is currently on track to mobilise up to 8 times its volume of EUR 24.4 billion by the end of 2021. Demand for EGF financing is strong, and further approvals and signatures are expected to rapidly bring the EGF well beyond 50% of its target by early summer.
“SMEs need financing and they need it now.” Added EIB Vice-President and Chairman of the EGF Board Dario Scannapieco. “We are working flat out to deliver record amounts of resources to the markets. In the first six months we have mobilised nearly €94 billion, almost 50% of the initiative’s target, this will ensure that EU entrepreneurs have the support they need.”
The EGF was founded by the European Investment Bank Group and EU Member States as a protection shield for European companies hard hit by the COVID-19 crisis. EGF guarantees act as an incentive for financial intermediaries to lend more money to companies under better conditions, helping businesses access rapid and advantageous financing and overcome the economic fallout of the COVID-19 pandemic.
TheEuropean Guarantee Fund(EGF) was set up by the EIB Group with contributions from EU Member States to shield companies suffering from the COVID-19 crisis. Using nearly €25 billion in guarantees, the EGF allows the EIB and the EIF to quickly make loans, guarantees, asset-backed securities, equity and other financial instruments available to mostly small and medium-sized enterprises. The EGF is part of the European Union’s recovery package aiming to provide a total of €540 billion boost those parts of the EU economy that have been hit the worst. Its goal is to ensure that SMEs with sustainable business plans can get the liquidity to overcome COVID-19 related adversities, and that healthy business can get the support they need, in order to grow.
The Board of Directors of the European Investment Bank (EIB) today approved plans to strengthen its global development engagement. It also approved EUR 4.8 billion of new financing for 24 projects to support climate action, COVID vaccines and economic resilience, sustainable transport and education.
Nordea has signed a guarantee agreement with the EIB Group, consisting of the European Investment Bank (EIB) and the European Investment Fund (EIF). Under the agreement, European support will guarantee a portfolio of Nordea lending up to €1.8 billion, freeing up capital for new loans for sustainable initiatives of Swedish and Finnish companies. The green loans will be offered to eligible SME’s and include offering reduced margins for eligible projects. The initiative is backed by the European Union’s Investment Plan for Europe, which is aimed at encouraging sustainable, long-term economic growth in Europe.
The European Investment Bank (EIB) today signed a €1.2 million cooperation agreement with Republika Srpska to support water and sanitation services. Through the water sector rehabilitation programme, the funds will ensure the effective execution of activities and rapid preparation of the investment projects, with expert technical assistance services. The project aims to upgrade the quality of water and wastewater services, provide these services to unconnected households and improve living conditions for over 216 000 people.