Loans from a loan arrangement with EIB
European Investment Bank (EIB) and our Bank signed 70 million euros finance contract for support to small and medium companies
Our Bank signed with the European Investment Bank (EIB) a finance contract for support to small and medium size companies, Mid-Cap companies and priority projects in the amount of 70 million euros. The funds provided under this contract will be used for the financing of working capital loans and investments with a repayment period of up to 12 years.
- Small and medium enterprises (SME) and MidCaps 1
- Public and NON-SME and NON-MIDCAP Private Sector Entities 2
Small and Medium Final Beneficiaries are small and medium sized enterprises (“SMEs”) defined as enterprises with less than 250 employees (full-time equivalent) or MidCaps defined as enterprises with minimum 250 and less than 3000 employees (full-time equivalent), in principle as stated in the Final Beneficiaries’ latest approved annual accounts.
An enterprise loses its SME/MidCap status if one or more public bodies hold 25% or more of capital/voting rights except those listed under the definition of Autonomous enterprises below which may hold 25% but not more than 50%.
Two enterprises are considered linked if one controls the other, directly or indirectly, through the majority of capital/voting rights or through the ability to exercise a dominant influence through a contract or by agreement.
Final Beneficiaries may be private sector companies employing more than 3000 employees (non-SMEs and non-MidCap companies) (“Private Sector Entities”), or Public Sector Entities of any size undertaking eligible Sub-Projects. The EIB will only consider Sub-Projects whose costs are at least EUR 40 000 and do not exceed EUR 25 million. The total amount of the loan provided for a Sub-Project from EIB’s resources may not exceed 50% of the total Sub-Project costs
- EIB can support the financing of all investments and expenditures incurred in the context of the development of Final Beneficiaries through eligible Sub-Projects. Business taxes such as Value Added Tax (VAT) are eligible only if they are non-recoverable. Financing of tariffs is excluded. 1
A Sub-Project is an aggregation of tangible and intangible investments and expenditures which can be identified in terms of location, design and benefits, and which is undertaken over a period of up to three years. Allocations may not be used to finance real estate development, or to allow the Final Beneficiary to provide consumer finance. Financing the purchase (or construction or renovation) of real estate with the purpose of selling or renting the building to a third party (i.e. not part of the same group of enterprises) is excluded from EIB support. Financing the purchase of assets other than real estate (e.g. construction equipment), with the purpose of renting them to third parties, is however eligible.
The total cost of each Sub-Project should not exceed the equivalent of EUR 25m.
The amount of an EIB allocation (“Allocation”) may reach up to 100% of the loan granted by the Borrower to a Final Beneficiary, but may not exceed EUR 12.5m (or equivalent in other currency).
The term of loans granted by the Borrower to Final Beneficiaries should be minimum 2 years.
Investments and expenditures which could be considered for financing as part of the Sub-Project include:
- The purchase, renovation or extension of tangible assets; financing of land purchase which is technically essential for the investments for up to 10% of total Sub-Project cost. Financing of purchase of farmland is entirely excluded
- The purchase of patents and licences is eligible where they are necessary for the technical implementation of the Sub-Project;
- Investment in intangible assets, i.e.: development, planning and financing costs during the construction phase of a tangible asset; R&D expenses (fees, development costs and gross salaries directly associated with the research, development, and innovation components of the activity); building up of distribution networks in the domestic market (asset and/or trademark acquisition, operational costs and labour costs).
- EIB’s funds may be used to provide a stable working capital base through the financing of working capital requirements of SMEs associated with their trading cycle, as part of their normal activities, with minimum 2 years tenor.
Our Bank will partially use the EIB funds to support Final Beneficiaries which promote youth employment, in the context of the EIB’s European Youth Employment and Training Initiative. In order to qualify for this initiative, a Final Beneficiary needs to fulfil at least one of the following two criteria:
- The Final Beneficiary confirms to have hired in the last 6 months and still employs at least 1 young person (2 for medium-sized enterprises and 5 for MidCaps) calculated from the signature date of the Sub-Financing Agreement signed with the Borrower. The firm commits to keep the young people in employment for at least 2 years, and/or
- In the last 6 months, the firm has provided a vocational training or internship position to at least 1 young person (2 for medium-sized enterprises and 5 for MidCaps). The training/internship has a duration of at least 6 months and is formalised by an active cooperation agreement with a technical school, university or public employment agency
To be eligible for inclusion as Final Beneficiaries, SMEs/MidCaps must comply with EIB rules on sector eligibility, restrictions and/or exclusions. Certain sectors are excluded under EIB’s mandate, others are considered sensitive in terms of EU-policy or for environmental or economic reasons (e.g. structural problems). The list of economic activity codes (“NACE codes”) will be provided to the Borrower by email. Each sector has a level of restriction assigned to it, which can be one of the following:
- Level 0: No restriction;
- Level 1: No restriction for Sub-Projects with a total Sub-Project cost below EUR 1 000 000. For Sub-Project costs exceeding this amount the Borrower must seek EIB approval prior to allocation
- Level 2: Not eligible. This category will amongst others apply to the following sectors or their derivative activities:
Final Beneficiaries active in the following activities are not eligible:
- Activities targeting the production of weapons and ammunition, arms, military or police equipment or infrastructures, and equipment or infrastructure which result in limiting people’s individual rights and freedom (i.e. prisons, detention centres of any form) or in violation of human rights;
- Activities targeting the production or facilitating the use of gambling and related equipment;
- Activities targeting tobacco manufacturing, processing, or specialist tobacco distribution, and activities facilitating the use of tobacco (e.g. “smoking halls”);
- Activities involving live animals for experimental and scientific purposes insofar as compliance with the “Council of Europe’s Convention for the Protection of Vertebrate Animals used for Experimental and other Scientific Purposes” cannot be guaranteed;
- Activities which give rise to environmental impacts that are not largely mitigated and/or compensated (see also Article 3 about conformity with EU directives and national laws on environment);
- Activities considered ethically or morally controversial or which are forbidden by national law, e.g. research on human cloning;
- The purchase of goodwill; the purchase of intangible assets that could lead to or enforce a strong market position of the Final Beneficiary (i.e. a market share of more than 20% of the relevant market); the purchase of licenses or rights for mineral resource exploitation;
- Activities constituting pure real estate development activity;
- Activities constituting pure financial transactions (such as the purchase of shares, or any other financial product).
- Any other sectors identified as non‑eligible on the list of NACE Codes
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