EIB Group is launching a package to support European companies under strain from the coronavirus pandemic and its economic effects with potential financing of up to €40 billion.
This will go towards bridging loans credit holidays and other measures designed to alleviate liquidity and working capital constraints for SMEs and mid-caps.
The EIB Group, including the European Investment Fund (EIF) which specialises in support for SMEs, will work through financial intermediaries in the Member States and in partnership with national promotional banks. The proposed financing package consists of:
- Dedicated guarantee schemes to banks based on existing programmes for immediate deployment, mobilising up to EUR 20 billion of financing;
- Dedicated liquidity lines to banks to ensure additional working capital support for SMEs and mid-caps of EUR 10 billion;
- Dedicated asset-backed securities (ABS) purchasing programmes to allow banks to transfer risk on portfolios of SME loans, mobilising another EUR 10 billion of support.
The amount of money can be mobilized at short notice, backed up by guarantees from the European Investment Bank Group and the European Union budget.
In addition, the EIB Group will use existing financial instruments shared with the European Commission, primarily the InnovFin ‘Infectious Disease Finance Facility’, to finance projects that work towards halting the spread of, finding a cure, for and developing a vaccine against coronavirus.
The EIB Group will also support emergency measures to finance urgent infrastructure improvements and equipment needs in the health sector, using existing framework loans or undisbursed amounts from existing health projects. The EIB Group’s current pipeline of projects in the health sector amounts to around EUR 5 billion.