ANNOUNCEMENT 18 Oct 2018

In October 2018, the European Investment Bank (EIB) signed a loan agreement with AMS AG to support its sensor business. The loan will be guaranteed by the European Fund for Strategic Investment (EFSI).

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

The European Investment Bank, Financed Projects, AMS SEMICONDUCTOR SOLUTIONS RDI: http://www.eib.org/en/projects/loan/loan/20180160
The European Investment Bank, Project summary, Project No. 20180160, AMS SEMICONDUCTOR SOLUTIONS RDI: http://www.eib.org/en/projects/pipelines/pipeline/20180160
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

Inception date: 18 Oct 2018 | Removal date: open ended

State loan

The loan agreement between the European Investment Bank (EIB) and AMS AG was signed on 18 October 2018 and has a total value of EUR 150 million (approx. USD 172 million).

More specifically four loan agreements were signed for the project concerning the company's research and development of "high-performance sensor solutions, sensor integrated circuits (ICs), interfaces and related software". EUR 13.5 million is granted to the German project location, EUR 10.5 million is granted to the Belgium project location, EUR 103.5 million is granted to the Austrian project location and EUR 22.5 million to project locations in other EU countries. AMS AG is a provider of various sensor solutions and has its headquarters in Austria.

In this context, the European Investment Bank noted that: "This project aims at strengthening the promoter's (ed. AMS AG) competitive edge through its RDI (ed. research, development and innovation) activities."

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.

AFFECTED SECTORS

 

AFFECTED PRODUCTS

 
Inception date: 18 Oct 2018 | Removal date: open ended

Loan guarantee

The EIB's loan to AMS AG signed on 18 October 2018 was issued under the European Fund for Strategic Investment (EFSI). The loan has a total value of EUR 150 million (approx. USD 172 million) and will support the company's project concerning research and development of "high-performance sensor solutions, sensor integrated circuits (ICs), interfaces and related software". The project will be carried out in Austria, Belgium, Germany and other EU countries. AMS AG is a provider of various sensor solutions and has its headquarters in Austria.

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".

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.