ANNOUNCEMENT 04 Aug 2017

In August 2017, the European Investment Bank (EIB) signed a loan agreement with STMicroelectronics N.V. to support its investment programme related to research and development of next-generation semiconductors in Malta, France and Italy. 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, STM ITALY-FRANCE-MALTA: https://www.eib.org/en/projects/loans/all/20161000
The European Investment Bank, Project summary: STM ITALY-FRANCE-MALTA: https://www.eib.org/en/projects/pipelines/all/20161000
STMicroelectronics: https://www.st.com/content/st_com/en/about/st_company_information/who-we-are.html
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: 04 Aug 2017 | Removal date: open ended
Still in force

State loan

On 4 August 2017, the European Investment Bank (EIB) and STMicroelectronics N.V. signed three loan agreements having a total value of EUR 500 million (approx. USD 588.7 million).

The loans will support the company's research and development of its next-generation semiconductor with a particular focus in the area of Smart Driving and the internet of things. The investment programme will also include capacity increase investments and clean room expansions, among others. The Programme is carried out between 2017 and 2018 in its locations in France, Italy and Malta.

STMicroelectronics N.V. is a provider of semiconductors and related solutions. The company has its headquarters in Switzerland with locations in 35 countries around the world.

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: 04 Aug 2017 | Removal date: open ended
Still in force

Loan guarantee

The EIB's loan to STMicroelectronics N.V. signed on 4 August 2017 was issued under the European Fund for Strategic Investment (EFSI). The loan has a total value of EUR 500 million (approx. USD 588.7 million) and will support the company's next-generation semiconductor development in its locations in France, Italy and Malta.

STMicroelectronics N.V. is a provider of semiconductors and related solutions. The company has its headquarters in Switzerland with locations in 35 countries around the world.

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".