EIB steps up support for European SMEs and mid-caps
- Jun 4, 2013
Today, the EIB’s Board of Directors announced approvals of loans worth up to EUR 1.4 billion for the benefit of small and medium sized businesses (SMEs) and mid-cap companies (up to 3000 employees) in the European Union. This will bring the total EIB support for European SMEs and mid-caps approved so far in 2013 up to some EUR 5.6 billion compared to EUR 4.2 billion in the same period 2012.
A new instrument that specifically targets innovation financing needs of mid-cap companies, the so-called Growth Financing Initiative (“GFI”), was approved by the EIB’s Board of Directors.
This new pilot initiative offers innovative European mid-cap companies with a broad range of tailor-made financing solutions ranging from direct debt, quasi equity risk and mezzanine instruments. Under the new initiative the EIB will provide financing of between EUR 7.5 m and EUR 25 m to support up to 50% of companies’ European research, development and innovation (“RDI”) investments. Moreover, in order to swiftly react to companies’ requests, a streamlined application and approval process has been established reducing the time needed to secure GFI financing.
This pilot initiative with an initial capital support of EUR 150 m is established under the Risk Sharing Finance Facility (“RSFF”) together with the European Commission.
The EIF Board, which met the day before, approved 11 guarantee agreements in support of new SME loan portfolios of EUR 1.5 billion, including 3 risk sharing instruments for innovation totalling EUR 500 million. Additionally, a further 7 new commitments to venture and growth capital funds were approved which will catalyse over EUR 900 million in new equity for fast growing SMEs. The EIF Board further approved an increase of EUR 1 billion in the EIB- funded risk capital resources mandate with a particular focus on higher risk mezzanine finance.
These initiatives reflect the way in which the EIB is increasing its efforts in support of mid-cap companies. An EIB study from September 2012 identified the market gap in the availability of debt financing for new innovation and growth plans of European mid-cap companies.
“Mid-cap companies have a key role to play in innovation, competitiveness and growth in Europe. Despite the economic crisis, mid-cap companies have been trying to maintain their RDI investments but are facing challenges due to increasing financing constraints in the market place”, said Werner Hoyer, EIB President.
The EIB and EIF held their Board of Directors meetings in Vilnius in view of Lithuania’s upcoming EU presidency. Among the approved projects was the financing for the gas import facility in Lithuania, an investment critical for this country to diversify and secure its energy supply.
The EIB Board of Directors also approved projects in the other priority sectors: innovation (EUR 1.4 bn.), resource efficiency (EUR 575 m) and strategic infrastructure (EUR 1.2 bn.).