ANNOUNCEMENT 24 Jun 2019

In June 2019, the European Investment Bank (EIB) signed a credit guarantee agreement with Banco BPM S.p.A. to support SMEs and mid-cap companies in Italy. 

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

The European Investment Bank, BBPM ENHANCED SME & MIDCAP SUPPORT: https://www.eib.org/en/projects/loans/all/20180442
The European Investment Bank, BBPM ENHANCED SME & MIDCAP SUPPORT: https://www.eib.org/en/projects/pipelines/all/20180442
EFSI Scoreboards, BBPM ENHANCED SME & MIDCAP SUPPORT: https://www.eib.org/en/scoreboards/all/88693348
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: 24 Jun 2019 | Removal date: open ended

Loan guarantee

On 24 June 2019, the European Investment Bank (EIB) signed a credit guarantee agreement with Banco BPM S.p.A. having a total value of EUR 50 million (approx. USD 57 million). 

The guarantee will cover existing loans granted by Banco BPM S.p.A. to Italian small and medium-sized enterprises (SMEs) and mid-cap companies. The credit guarantee agreement aims at bettering access to financing to this group of companies.

In general, the EIB has made financing of SMEs and mid-cap companies a top priority. In this context, the EIB stated: "In 2018 alone, the EIB Group financed SMEs and mid-caps across the globe to the tune of EUR 23.3 billion (EIB Group)."

The EIB guarantee is approved under the European Fund for Strategic Investment (EFSI).

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.

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