The European Investment Fund (EIF) and Caixa Económica Montepio Geral (Montepio) have signed a guarantee agreement to provide EUR 20 million for small and medium-sized enterprises (SMEs) in Portugal. This agreement benefits from the support of the European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe.
Under the new agreement, Montepio will provide attractive loans to innovative SMEs and mid-caps over the next two years. EIF’s guarantee is provided under the “EU InnovFin finance for Innovators” initiative, backed by Horizon 2020, the EU Framework Programme for Research and Innovation. The transaction would not have been possible so soon without the backing of the Investment Plan. It follows the news on 24 October that the European Investment Bank (EIB) signed a EUR 20 million loan with Montepio, which was also backed by the Investment Plan.
European Commissioner Carlos Moedas, responsible for Research, Science and Innovation, said: "Just one month after the EIB and Montepio signed an agreement under the Investment Plan, today we are announcing a further EUR 20 million for Portuguese businesses. The Commission's Investment Plan has proven to be a great resource for stimulating innovative SMEs and start-ups, and for creating new jobs and growth opportunities."
EIF Chief Executive, Pier Luigi Gilibert, commented: “Innovation is a key factor for driving growth and jobs in the European economy. This InnovFin EFSI signature with Montepio provides a clear example of how EIF, together with local banks, can help to finance innovative companies.”
Montepio Board Member, João Lopes Raimundo, explains that "by signing this guarantee agreement under the InnovFin SME Guarantee, Montepio intends to recognize, encourage and support companies with R&D focused strategies, such as investments in the production or development of new products, processes or services - as differentiating and valuable assets.”
These transactions reflect the EU's commitment to rapidly launch concrete initiatives under the EFSI, accelerating lending and guaranteeing transactions capable of boosting jobs and growth in the EU.
The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. More information on EIF's work under the EFSI is available here.
Montepio is one of the largest banks in Portugal, where most of its business is originated, providing a diversified range of financial services to both corporate and retail clients. Montepio differentiates itself from its peers, due to the fact that its institutional capital is held by Montepio Geral Associação Mutualista, a private mutual association which, amongst other things, aims at contributing to the social development of Portugal.
About the Investment Plan for Europe
The Investment Plan focuses on strengthening European investments to create jobs and growth. It does so by making smarter use of new and existing financial resources, removing obstacles to investment, providing visibility and technical assistance to investment project. The Investment Plan is already showing results. The European Investment Bank (EIB) estimates that by October 2016, the European Fund for Strategic Investments (EFSI) had potentially triggered more than EUR 138 billion of investment in Europe.
Building on this success, the European Commission on 14 September 2016 proposed extending the EFSI by increasing its firepower and duration as well as reinforcing its strengths. Find the latest EFSI figures including a break-down by sector and by country here. For more information see the FAQs.
The InnovFin SME Guarantee Facility provides guarantees and counter-guarantees on debt financing of between EUR 25,000 and EUR 7.5 million in order to improve access to loan finance for innovative small and medium-sized enterprises and small mid-caps (up to 499 employees). The facility is managed by EIF, and is rolled out through financial intermediaries – banks and other financial institutions – in EU Member States and Associated Countries. Under this facility, financial intermediaries are guaranteed by EIF against a proportion of their losses incurred on the debt financing covered under the facility.