ANNOUNCED AS TEMPORARYNo
The EIB's loan to Sidenor Aceros Especiales S.L.U. signed on 19 July 2019 is issued under the European Fund for Strategic Investment (EFSI). The loan agreement has a total value of EUR 50 million (approx. USD 56 million).
The loan will support the company's investments in new technologies and equipement to bettering product quality and manufacturing efficiency of the company's steel production line. Sidenor Aceros Especiales S.L.U. has its headquarters in Spain with branches in Germany, France, Italy and the United Kingdom. The company is a steel producer.
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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