The European Investment Bank (EIB), the European Union’s long-term lending institution, has granted a second tranche of EUR 45 million to the State Bank of India (SBI) for on-lending to private businesses in the country. A first tranche of the loan of EUR 55 million was signed on 25 June 2014. Of the EUR 200 million loan approved, a total of EUR 100 million has been provided so far.
The operation will support the development of private sector development, in particular small and medium-sized enterprises (SMEs), social and economic infrastructure as well as climate change mitigation and adaptation in India. Under the credit line, SMEs (firms with up to 250 employees) and midcaps (firms with up to 3000 employees) will be able to benefit from the EIB loan. The EIB funds will be earmarked for financing projects across a broad range of sectors, including manufacturing, as well as wholesale and retail trade and services.
On 1 July 2014 the EU’s new External Lending Mandate, covering the period 2014-2020, entered into force, providing for a ceiling of almost EUR 936 million for operations in Asia. The EIB is granting this loan under this new 2014-2010 mandate which enables it to support investments designed to foster the growth of the local private sector, develop economic and social infrastructure and mitigate the effects of climate change.
In addition, in some cases the EIB can provide lending from own resources under the Climate Action and Environment Facility or the Strategic Projects Facility, amounting to a combined total of EUR 2 billion.
The EIB has been active in Asia since 1993 under mandates granted by the EU Council and the European Parliament. During this period the EU bank has signed contracts in the region, involving finance totalling EUR 5.6 billion.