ANNOUNCED AS TEMPORARYNo
The EIB's loan to the French dairy cooperative SODIAAL signed on 21 December 2018 was issued under the European Fund for Strategic Investment (EFSI). The loan has a total value of EUR 40 million (approx. USD 45.6 million) and will support the company's research and development project concerning its dairy products, ingredients thereof and industrial processes. SODIAAL is a dairy cooperative consisting of 12,500 producers with dairy brands having a worldwide presence.
The EFSI is a joint initiative by the EIB and the European Commission to promote investment in Europe. The EIB has designated EUR 7.5 billion of its capital for lending to European projects with a higher risk profile than usually taken on by the bank. To compensate for the increased lending risk, the European Commission has agreed to fully guarantee all lending under the EFSI up to a budget of EUR 26 billion. The loan described was issued under the EFSI and thus benefits from a full guarantee through the EU budget.
EFSI support does not fall under EU State Aid rules as it is meant as a tool to address "market failures or sub-optimal investment situations". However, the investment support does include favourable conditions in the form of public assumption of risk.
As described in the European Commission's Fact Sheet from 13 January 2015: "The type of risk-financing instruments will be designed so as to take uncertainty out ("first loss protection") of as such viable projects and therefore crowd-in private sector investments. Since the EFSI will take riskier tranches in investment projects, the private sector will be able to join under more favourable conditions." Furthermore, the EIB states that "The new initiative [i.e. the EFSI] will benefit from the EIB’s strong credit standing that enables funding at favourable conditions and across maturities".
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