Release date: 29 June 2022
Promoter – Financial Intermediary
PIRAEUS BANK SALocation
Description
European Guarantee Fund (EGF) guarantee instrument to support new lending to small and medium-sized enterprises (SMEs).
Additionality and Impact
The proposed transaction consists of an EGF operation, in the form of a first loss piece guarantee on an SME and Midcap portfolio originated by Piraeus Bank S.A. (Greece) in order to support new lending to SMEs. Piraeus is one of the largest bank in the country and a repeat intermediary for the Bank. The operation facilitates a quick mobilisation of financing for the SMEs, a sector key for employment and value added/growth. The proposed operation addresses a market failure related to SMEs access to finance in the aftermath of the Covid-19 pandemic. The operation is expected to mitigate the financial constraints and help viable companies to sustain their economic recovery and to relaunch their business activity severely hit by the pandemic. The operation also addresses the EU's economic, social and territorial disparities and hence contributes to the cohesion objective, by targeting companies in transition and less developed regions. EIB contribution is notable as it offers a guarantee for a subordinated (junior) tranche (novel product in the market). EIB/EIF also leveraged their status as supranational institutions and their AAA rating to provide the guarantee that is acceptable from a regulatory point of view. The EIB participation will have a positive signalling effect to the market and reduce risk perceptions.
Objectives
The project aims to improve the access to finance for SMEs in Greece and hence support the economic recovery from the COVID-19 pandemic. SMEs are the backbone of the Greek economy and thus play an important role for value creation and employment. Moreover, the proposed operation will target 100% of the loan amount eligible projects promoted by SMEs located in less developed and transition regions.
Sector(s)
- Credit lines - Credit lines
Proposed EIB finance (Approximate amount)
EUR 64 million
Total cost (Approximate amount)
EUR 540 million
Environmental aspects
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Procurement
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Status
Signed - 30/06/2022
Disclaimer
Before financing approval by the Board of Directors, and before loan signature, projects are under appraisal and negotiation. The information and data provided on this page are therefore indicative.
They are provided for transparency purposes only and cannot be considered to represent official EIB policy (see also the Explanatory notes).