EIB launches SME loans for EU’s Eastern neighbours
- Release date: 30 September 2009
- Reference: 2009-184-EN
- adds to lending under joint action plan for Central and Eastern European banks
The European Investment Bank, the bank of the European Union, is launching a lending facility via other financial institutions for small and medium-sized enterprises (SMEs) in the EU’s eastern neighbours. EIB President Philippe Maystadt announced the decision on Wednesday ahead of the International Monetary Fund and World Bank annual meetings in Istanbul.
Until now, the EIB has been able to offer its SME loans product only to banks within the European Union, Western Balkans and pre-accession countries. The EIB’s decision to expand geographic coverage follows a request made at the EU’s Eastern Partnership Summit held in Prague in May.
“This is an important addition to the action we are taking with other international financial institutions to help stabilise lending to the real economy in central and eastern Europe,” Philippe Maystadt said. “We hope to be able to conclude our first loan under the new facility before year end.”
The EIB together with the World Bank (WB) and European Bank for Reconstruction and Development (EBRD) committed in February to provide EUR 24.5 bn in financial resources for banking systems and the real economy in central and eastern Europe. Of the total, the EIB pledged to provide nearly half, or EUR 11 bn.
The main IFIs involved in the action plan are due to discuss implementation in Istanbul. EIB will chair a meeting of the heads of all multilateral development banks on Oct. 4.
“We have moved swiftly to implement the joint action plan and now expect to exceed our 11 billion euro target,” Philippe Maystadt said. “Up until today, we have signed loans totalling 6.3 billion euro and disbursed some 1.7 billion euro in credits to SMEs.”
EIB intervention in the Eastern Partnership countries has so far been limited to the transport, energy, telecommunications and environmental infrastructure sectors. The conclusions of the Eastern Partnership summit invited the EIB, the EBRD and other international financial institutions IFIs operating in the region to establish an appropriate joint small and medium-sized enterprise facility.
The Eastern Partnership is a new framework for cooperation between the European Union and Armenia, Azerbaijan, Belarus, Georgia, Republic of Moldova and Ukraine. Under a mandate provided by the European Parliament and Council of Ministers, the EIB is able to undertake activities in all countries except Belarus. The mandate makes available a total of EUR 3.7 billion euro for lending in the period 2007-13.
The new facility will enable EIB to support via partner banks in the region investments by SMEs and energy and environmental projects costing up to EUR 25 million. EIB is already in talks with a number of state-owned development banks in the region as well as EU banks with subsidiaries in the region with a view to concluding the first loan agreements.
The European Investment Bank (EIB), founded in 1958 under the Treaty of Rome, is the EU’s long-term financing institution. It will lend this year some 75 billion euro, of which 70 billion for projects within the European Union.