ANNOUNCEMENT 22 Nov 2017

In November 2017, the European Investment Bank (EIB) approved a EUR 500 million investment facility supporting small and medium-sized enterprises (SMEs) and mid-caps through private European equity funds.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

The European Investment Bank, Financed Projects, EIB-EIF SME FUNDS INVESTMENT FACILITY: https://www.eib.org/en/projects/pipelines/all/20170187
The European Investment Bank, Project summary, EIB-EIF SME FUNDS INVESTMENT FACILITY: https://www.eib.org/en/projects/loans/all/20170187
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
Piaggio: https://www.piaggiogroup.com/en/group/where-we-are

Inception date: 22 Nov 2017 | Removal date: open ended
Still in force

State loan

The European Investment Bank (EIB) approved a EUR 500 million (approx. USD 590.7 million) investment facility. The facility will invest in small and medium-sized enterprises (SMEs) and mid-cap companies through private European equity funds. Under the EIB facility, the EIB signed the first investment facility agreements with a number of private European equity funds on 22 November. In December 2017 as well as throughout the years 2018 and 2019 several new agreements were also signed. 

In this context, the EIB stated that: "It is expected that the EIB will invest in approximately 20-30 private equity funds which in turn will provide equity financing to approximately 300-450 SMEs and small Midcaps."

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

 
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Inception date: 22 Nov 2017 | Removal date: open ended
Still in force

Loan guarantee

The European Investment Bank (EIB) approved EUR 500 million (approx. USD 590.7 million) investment facility is issued under the European Fund for Strategic Investment (EFSI). The facility will invest in small and medium-sized enterprises (SMEs) and mid-cap companies through private European equity funds. 

Under the EIB facility, the EIB signed the first investment facility agreements with a number of private European equity funds on 22 November. In December 2017 as well as throughout the years 2018 and 2019 several new agreements were also signed. 

In this context, the EIB stated that: "It is expected that the EIB will invest in approximately 20-30 private equity funds which in turn will provide equity financing to approximately 300-450 SMEs and small Midcaps."

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".

 
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