ANNOUNCEMENT 21 Dec 2018

In December 2018, the European Investment Bank (EIB) signed a loan agreement with the French dairy cooperative SODIAAL to support its research and development of dairy products, ingredients and industrial processes. 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, SODIAAL RDI IN DAIRY ACTIVITIES: http://www.eib.org/en/projects/loan/loan/20170565
The European Investment Bank, Project summary, SODIAAL RDI IN DAIRY ACTIVITIES: http://www.eib.org/en/projects/pipelines/pipeline/20170565
SODIAAL: https://www.sodiaal.fr/SodiaalFR//index.aspx?site=SODFR&lang=EN
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: 21 Dec 2018 | Removal date: open ended
Still in force

State loan

The loan agreement between the European Investment Bank (EIB) and the French dairy cooperative SODIAAL was signed on 21 December 2018. The loan has a total value of EUR 40 million (approx. USD 45.6 million). The loan is issued under the Agriculture and Bioeconomy Programme Loan, see related state act.

The loan will support the dairy cooperative'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.

According to the EIB: "The project will accelerate and further mobilise research, development and innovation (RDI) investments, thus furthering the sustainability of the promoter (ed. SODIAAL), active in agriculture and bioeconomy."

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

 
Inception date: 21 Dec 2018 | Removal date: open ended
Still in force

Loan guarantee

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".