Today the European Investment Fund (EIF) signed three new SME Initiative guarantee transactions with BRD-Groupe Société Générale, with ING Bank (Bucharest Branch) and Libra Internet Bank acting as partners. The agreements with the three banks aim to facilitate access to finance for Romanian SMEs by providing a 60% guarantee on each loan and by lowering the interest rates charged by banks. These transactions are expected to benefit around 300 SMEs and start-ups in need of finance.
In addition, the EIB signed a first loan denominated in RON (Romanian Leu) with ProCredit Bank S.A., amounting to approximately RON 90m (EUR 20m), dedicated mainly to investments for SMEs and midcaps, marking an important milestone for the EIB Group in supporting the Romanian economy through its local banking sector partners. More than 250 SMEs and midcaps are expected to be reached through this long-term RON denominated lending.
Environmental protection project under the Juncker Plan
At the same time the EIB provided a EUR 7.5m loan to GreenFiber International SA to finance a recycling and circular economy project. This operation is backed by the European Fund for Strategic Investments (EFSI), the core of the Investment Plan for Europe, the Juncker Plan. The project will help create 280 full-time jobs and it will increase the amount of waste collected and processed by over 50,000 tonnes per year.
European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “A circular economy responds to the main challenges of our time. Shifting from linear business models to circular ones will help our economy become more competitive and resilient, and relieve the pressure on our resources and the environment. It is very satisfying to see the Investment Plan for Europe enabling GreenFiber to expand its recycling scope. I encourage more Romanian businesses to take advantage of the financial and advisory support offered by the European Investment Bank and the Investment Plan.”
EIB Vice-President Andrew McDowell commented: “We are celebrating the 25th anniversary of our first lending operation in Romania as well as the fact that we support projects that improve the living standards of the citizens of Romania. Similarly, as there have been 145 projects supported directly by the EIB in Romania and 73 operations accomplished by its subsidiary EIF in the country so far, the new transactions are designed to reduce disparities in regional development and to strengthen the economic competitiveness of Romanian businesses. The current projects are good examples of the fruitful partnership between the EIB and Romania: they provide long-term, affordable financing to small and medium-sized enterprises. SMEs are the backbone of the Romanian economy when it comes to generating jobs and economic growth. The use of the EU budget guarantee under EFSI for a project contributing to the climate action priority enables us to support investments that otherwise would not qualify for EIB lending.”
Prime Minister of Romania Mihai Tudose stated: “The Romanian Government and citizens treasure the fruitful collaboration demonstrated over the last 25 years between the EIB and our country, especially in the field of public investment support and financing. The new projects signed today represent a good example of EIB cooperation with the Romanian economy and they are expected to generate positive effects in terms of financing costs and the availability of liquidity for long-term funding to Romanian SMEs, fostering growth and employment with a view to improving the everyday life of citizens.”
Green Group President Clement Hung commented: "The EIB funds will enable GreenFiber International SA, the leader in recycling in Romania and Europe’s largest PET recycler, to increase the company´s collection of recyclable materials and its polyester stable fibre output. I very much welcome that, thanks to the EIB’s support, GreenFiber International SA has the opportunity to contribute to Romania´s transition to a circular economy and to meet Romania’s national recycling targets.”
The EIF agreements with the three banks aim to facilitate access to finance for Romanian SMEs by providing a 60% guarantee on each loan and by lowering the interest rates charged by banks. These transactions are expected to benefit around 300 SMEs and start-ups in need of finance.
The EIF has thus made a commitment to deliver enhanced access to finance for SMEs in Romania by extending the number of banks in Romania supporting local companies to eight. These recent transactions will increase the coverage of potential beneficiaries to achieve the full deployment of the programme. The combination of European Structural and Investment funds, EU Horizon 2020 and EIB Group resources enables the EIF to provide risk-sharing and capital relief to financial intermediaries for the ultimate benefit of over 4 000 Romanian SMEs.
19 October 2017