ANNOUNCEMENT 10 Dec 2018
In December 2018, the EIB group signed a guarantee agreement with Santander Bank Polska SA to support climate action projects carried out by small and medium-sized enterprises (SMEs) and mid-cap companies in Poland. The guarantee is issued under the European Fund for Strategic Investment (EFSI).
NUMBER OF INTERVENTIONS
The European Investment Bank, Financed Projects, SB POLSKA ABS- ENHANCED SUPPORT FOR SMES&MIDCAPS: https://www.eib.org/en/projects/loan/loan/20170272
The European Investment Bank, Project summary, SB POLSKA ABS- ENHANCED SUPPORT FOR SMES&MIDCAPS: https://www.eib.org/en/projects/pipelines/pipeline/20170272
EFSI Operation Scoreboard, issued 13 November 2018: https://www.eib.org/attachments/scoreboards/88017405.pdf
The European Investment Fund: http://www.eif.org/who_we_are/index.htm
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
The EIB group approved a guarantee to Santander Bank Polska SA having a total value of PLN 500 million (approx. USD 132.3 million). More specifically, the European Investment Fund will issue a "mezzanine guarantee in a synthetic securitisation" whilst the European Investment Bank will issue a "back-to-back counter-guarantee" of the mezzanine guarantee under the European Fund for Strategic Investment (EFSI). On 10 December 2018, the tranche of a EUR 92.789.582,38 guarantee to was issued to Santander Bank Polska SA.
The guarantee will support Santander Bank Polska SA's financing of climate action projects carried out by small and medium-sized enterprises (SMEs) and mid-cap companies in Poland.
According to the EIB: "This project will improve competitiveness and access to finance at favourable conditions for SMEs and mid-caps in Poland."
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 European Fund for Strategic Investment
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 the 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 the 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".
The European Investment Fund
The EIF is part of the European Investment Bank Group. The Fund provides financial products to intermediaries (e.g. private banks) to better European small and medium-sized enterprises' access to finance. According to the EIF, one million SMEs across Europe have benefitted from such products. Financial products offered to intermediaries are financed either by the Fund's own resources or by the EIB, the European Commission, EU member states or various other third parties.