ANNOUNCED AS TEMPORARYNo
The EIB's loan to ULMA Group signed on 14 December 2018 was issued under the European Fund for Strategic Investment (EFSI). The loan has a total value of EUR 70 million EUR 26 million (approx. USD 29.4 million) and will support the company's research, innovation and development project mainly concerning its activities construction and architectural solutions in Spain and Poland.
ULMA Group comprises of eight "cooperative companies". The Group's business activities are in the following areas: "Architectural Solutions, Agricola, Forklift Trucks, Construction, Conveyor Components, Handling Systems, Packaging and Piping." The Architectural Solutions unit manufactures and supplies goods made of polymer concrete in the following market segments: "Drainage Systems, Architectural Precast, External Wall System and Ventilated Facades." The ULMA Construction manufactures and supplies "formwork, shoring and temporary scaffolding systems". Ulma has its headquarters in Spain with 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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