ANNOUNCEMENT 24 Jul 2018
In July 2018, the European Investment Bank (EIB) signed a credit line agreement with the National Bank of Greece S.A. to support small and medium-sized enterprises (SMEs) and mid-caps in Greece. The credit line is guaranteed by the European Fund for Strategic Investments (EFSI).
NUMBER OF INTERVENTIONS
The European Investment Bank, Financed Projects, NBG COVERED BONDS LOAN FOR SMES AND MID-CAPS: http://www.eib.org/en/projects/loan/loan/20170463
The European Investment Bank, Project summary, Project No. 20170463, NBG COVERED BONDS LOAN FOR SMES AND MID-CAPS: http://www.eib.org/en/projects/pipelines/pipeline/20170463
European Commission (13 January 2015): The Investment Plan for Europe: Questions and Answers: http://europa.eu/rapid/press-release_MEMO-15-3223_en.htm
EIB: European Fund for Strategic Investments - Questions and Answers. Available at: http://www.eib.org/attachments/press/investment_plan_for_europe_qa_en.pdf
European Investment Bank, SMEs and mid-caps: http://www.eib.org/en/projects/priorities/sme/index.htm
The European Investment Bank (EIB) approved a EUR 200 million (approx. USD 233.7 million) credit line to the National Bank of Greece S.A. The EIB financing takes "the form of a loan substitute (covered bonds)". Under the credit line, the EIB and the National Bank of Greece S.A. signed a financing agreement having a total financing value of EUR 100 million on 24 July 2018. On 12 February 2019, a financing agreement of EUR 100 million was signed under the credit line.
The EIB financing will support small and medium-sized enterprises (SMEs) and mid-caps in Greece. In this context, the EIB stated that: "This intermediated loan will improve competitiveness and access to finance at favourable conditions for SMEs and mid-caps."
In general, the EIB has made financing of SMEs and mid-cap companies a top priority. In this context, they stated: "In 2017 alone, the EIB Group financed SMEs and mid-caps across the globe to the tune of a record EUR 29.6 billion (EIB Group)."
A state act in the GTA database is assessed solely in terms of the extent to which its implementation affects foreign commercial interests. On this metric, the investment support granted here is discriminatory.
The EIB's credit line to National Bank of Greece S.A. signed on 24 July 2018 was issued under the European Fund for Strategic Investment (EFSI). The credit line has a total approved value of EUR 200 million (approx. USD 233.7 million) and will, through National Bank of Greece S.A., support Greek small and medium-sized enterprises (SMEs) and mid-cap companies.
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".