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1. Access the loans of the European Investment
Bank
Five priorities for loans
Financing the SMEs
Financing of trans-European
networks
2. The SME support of the European Investment
Fund
The guarantee mechanism
The Multiannual Programme for Companies
(MAP)
The capital-venture
activities
First part: The EIB group
The EIB Group :
- The European Investment
Bank
- The European Investment Fund
Newly constituted in June 2000
after a reformation of the EIF statutes, the EIB Group aims at:
-
Financing long-term projects with great dimension through direct or
indirect loans
- Investing in small or medium structures through
capital venture and guarantee allocation within the Union and the 12
applicant countries.
The work schedule
was defined for the period 2001- 2003
1. Access the loans of the European Investment
Bank
How does the EIB
operate and for which loans?
- Within the EU, the EIB finances
· regional development,
· industry,
· the
amelioration of companies competition,
· communications and
infrastructures,
· security of energy supplies,
· environmental
protection,
· improvement of the quality of life,
- outside the
EU in the framework of partnerships with
· ACP countries
·
12 Mediterranean States (Euro-Med area)
· and some Eastern
European countries (in cooperation with the EBRD)
· ALA area
(Latin America - Asia)
Five priorities for loans :
1.
Support the economic and social coherence and regional development
This
essential mission of the EIB answers to the objectives 1 and 2 of the
Structural Funds.
More than two thirds of the individual loans (13,7
billion Euros) contribute to the financing of a large range of investments
for the underdeveloped regions or areas with structural
difficulties.
The main supported
projects:
· develop communication infrastructures conditioning the
creation of activities
· Projects linked to environmental
protection
· Actions contributing to the improvement of the quality
of life: urban revitalisation, development of public
transport and construction or modernisation of sanitary
infrastructures
· Transport telecommunication and
energy infrastructures,
· Extension, modernisation or setting
out of industrial companies
· Strengthening of the international
competition of the European heavy industry: automobile, electric or
electronic equipment, metal, paper or rubber working
·
Adaptation of the industrial fabric to support the international
competition and to create jobs
2.
Promote investments for a society based on knowledge and innovation
Initiative Innovation 2000 - i2i allocates middle and
log-term loans up to 12 to 15 billion Euros for projects with a
technological high added value and frontier technology sectors for
2001-2003.
In 2000 : 1,6 billion Euros allocated through lending to 11
Member States
This programme
consists of five priorities:
· Development of SMEs and
entrepreneurial spirit, strengthening of capital venture
activities
· Spread and use of innovation tools : financing
of all ranges of investments implemented by public local authorities or
companies. These subsidies may help to develop the necessary skills for
the use of new technologies.
· Research and Development :
support of private or public projects associating companies or public
organisations, promotion of research infrastructures, of centres of
excellence or structures facilitating the access of SMEs to research
programmes.
· Networks of information and communication
technologies: support of trans-European networks and multimedia,
material or virtual infrastructures with a local access to these networks,
especially in the less developed countries of the European Union.
·
Enriching of the human capital: modernisation and computerisation of
schools, high schools and universities in favour of training centres for
information technologies
INNOVATION 2000 INITIATIVE
3.
Prepare the accession of the candidate countries
Since 1990, more than 14
billion Euros have been invested and 2,9 in 2000 to contribute to the
economic catching-up process of these countries.
Generally, the
Bank was able to offer credits in local currencies and to limit
the losses of foreign-exchange operations for borrowers, if possible.
Financing
:
· Infrastructures : railway and route facilities, harbour,
airports, aerial monitoring, telecommunication networks, communication
infrastructures, development of new shafts…
· Environment :
amelioration of natural and urban environment, programmes for waste water
treatment, modernisation of tubes, tramways, creation of urban
infrastructures, actions of assistance for damaged areas.
·
Industry: global loans allocated to partner financial institutions for
the support of local industrial projects (intermediary
loans)
PRE-ACCESSION FACILITY - PREPARATION FOR ENLARGEMENT
4.
Cooperate with third countries
· Euro-Med area: in
2000, the EIB supported the objectives of the Euro-Mediterranean
partnership in order to create an area of economic stability and
prosperity.
Financing: modernisation of the private sector (SMEs),
development of the financial sector and of infrastructures for
environment.
· ACP - Africa, Caribbean, Pacific : the Bank takes
action in 25 countries and loans for the implementation of regional
projects. The EIB focuses its efforts on the private sector
development. Attached to the poorest countries, the EIB contributes to
the debt relief of a dozen countries.
· South Africa: financing
of the telecommunications, the industry and small
infrastructures of local interest.
· ALA area- Latin America -
Asia: investments for the private sector, support of
co-enterprises for which operators and European banks take action with the
involved countries.
· Balkans : The EIB contributed to the
Stability Pact for Europe and was involved in a bridge construction on the
Danube, the rehabilitation of electric transport networks and in the
amelioration of a route shaft in Albania
Eurofunding programme
sheets :
South Africa
Asia and South America
ACP countries
5.
Natural and urban environmental protection
Essential ! ! The EIB
systematically takes the environmental considerations into account in the
evaluation of all the projects it supports.
The strict observance of
the current standards and the implementation of the most adapted measures
for protection (Community Law) constitute a necessary and perequisite
condition for the allocation of a loan by the EIB.
Financial
support:
· Natural environmental protection: waste and water
treatment, reduction of air pollution, deployement of industrial non
polluting processes, protection of soils …
· Improvement of urban
environment: reduction of noise disamenity due to traffic, development
of urban transport on separated railroad, projects for tramways, tubes and
urban railways, construction of loop lines or tunnels to purge the
city-centres, layout of urban renewal, rehabilitation of social housing in
disadvantaged areas.
· Environment in the accession countries:
projects for water provision, waste water sanitation, local waste
treatment, public transport and town planning
· Prevention for
climate change: the EIB aims at developing its lending activities in
two main sectors: energy saving and substitutes of energy
sources. It offers to develop the synergisms between its loans for
environment and the loans it allocates in the framework of the i2i
programme: finance innovative projects for research and development in
fields that have a positive impact on environment and support investments
based on the industrial application of these researches.
Financing the SMEs
SMEs represent 98%
of all the private companies in Europe. They play a fundamental role
in the introduction of advanced technologies. The EIB contributes
to support their developments thanks to middle and long-term loans.
The community
definition of a small and medium enterprises (SMEs)
· It must have
less than 500 employees
· The net fixed assets in the
balance sheet must amount to less than 75 million Euros
· The
independent capital cannot exceed 25% of the capital owned by a big
group.
The global loans of
the EIB
In 2000, 5,7 billion Euros were granted by the EIB for
the development of some 27000 SMEs. The smallest of them are the
beneficiaries of two thirds of the allocated amounts.
This is
an indirect action, carried out with the partnership of almost
180 banks or financial institutes.
The cooperation with
these financial intermediaries allow the SMEs to have a direct access
to the needed funds.
Financing of trans-European networks
Framework of the
measures of support
The EIB constitutes the first banking
financing resource of these big networks and is involved in the
implementation of great infrastructures. It is able to mobilise the
necessary amounts for their realisation at the best conditions, to propose
period conditions and lending opportunities appropriate to the project
scheme and to catalyst other financing resources.
The different
financial products
The EIB has established a mechanism of
formal finance, with a stock reserve of 750 million Euros
for 2001-2003.
Priorities:
· Adapt its actions to the needs of
projects presenting high risks,
· Pursue its financing
activities through own funds or guarantees for large
infrastructures.
Diversity of the financial products:
·
Loans and guarantees of first ranking: take the risk into account
before achievement and related to the initial steps of the
exploitation,
· Subordinated loans and guarantees of higher
ranking than the subordinated loans for the shareholders,
·
Mezzanine Financing: high return issued by small or medium industrial
societies in change-over or in restructuring
· Derivatives
corresponding to the projects
Objectives
Bring an added value to priority projects by completing the
actions of commercial banks and capital markets.
2.
The SME support of the European Investment Fund
What does the EIF
finance?
The EIF supports the SMEs and help them start the
activities that foster the economic growth and job creation.
Currently, the experts notice that the SMEs, which represent 98% of
all the private companies in Europe, keep on suffering from financial
insufficiency adapted to their needs, which slows them down in their
development.
So the EIF has 2 tools at its disposal to answer to these
needs:
· The guarantee portfolio for the SMEs
· The
capital-venture activities
The guarantee mechanism
Characteristis:
Possible operations:
·
Direct guarantee of loans portfolio
· Securitisation of
loans allocated to companies
The clients :
· Public
organisations
· Commercial banks and other financial
institutions
· Regional or national guarantee fund
·
Special tools for the financing of SMEs
Objectives
CAUTION ! !The EIF does not
grant any guarantee for individual loans but always on the basis of an
operation portfolio (intermediary action)
Goals :
· Reduce
the intermediary risks during the allocation of financing through
loans for small societies
· Make a better use of the capital and
increase the lending capabilities
The
Multiannual Programme for Companies (MAP)
The EIF has elaborated
new guarantee and capital-venture tools, thanks to the Council and
Parliament in the framework of a new action Programme for the period
2001-2005. These actions gather the old concepts of financing
programmes, the mechanism for growth and environment and the guarantee
mechanism for SMEs, with a larger application.
1. Mechanism for Growth and Environment
·
It offers guarantees to financial institutions that allocate
loans to European SMEs for the support of environment-friendly
investments
· The guarantees does not cost anything to the
financial institutions that are involved because of the EU
support.
· The loans that are eligible concern the small
companies with less than 100 employees in the 15 Member
States.
· New: focus on the incubators and
seed-capital financed in the framework of the ETF start-up
scheme
INNOVATION AND SME - ENCOURAGING SME PARTICIPATION
2. Guarantee Mechanism for SMEs
This programme
is part of the EU initiative for growth and employment.
Characteristics:
· Facilitate the access to lending
opportunities for SMEs
· Support the job creation
·
administration on a trustee basis in the name of the European
Commission through intermediary institutions located in the Member States
and specialised in guarantee issue.
· Extension of the Guarantee
Mechanism for SMEs, covering guarantees for capital sharing of the
micro-credits as well as financial guarantees for small innovative
companies, operating or investing into information and telecommunication
technologies (start-up)
Programme sheet
Eurofunding :
GUARANTEE MECHANISM SMEs
The capital-venture activities
Capital-venture is a
fundamental factor of the companies growth and job creation. To offset the
European delay, it is expected that the EIF mobilises between 3 and 4
billion Euros for the period 2000-2003 and so becomes the
main actor of the European capital-venture market.
Objectives
· Strengthen the banking
structures of capital-venture in Europe
· Catalyst the
sharing of private or public co-investors
· Adapt the
market needs
· Act as a fund of fund
(intermediary)
· Satisfy all the needs: from the start-up to the
introduction into the market
The EIF
priorities are :
· High-tech innovative societies with a
high growth rate and a great potential of job creation, that enable the
modernisation of the economy.
· Regional capital-venture funds
acting for a more homogeneous European market
· Pan-European
capital-venture funds that encourage national initiatives and foster
the transfer of know-how and the spread of best practices in the Union.
Capital management in the European Union
The
EIF must be able to:
· Anticipate the market evolutions
·
Facilitate the establishment of an efficient and coherent European
capital-venture sector
The resources in
capital-venture in the Community (ETF Start-up) are for specialised
funds
· That take action for the financing of seed-capital
that the companies need
· That support the incubators as
advocated by the Union.
For further
information about the EIB Group, go to :
·www.bei.org
·www.eif.org
First part: The EIB
group
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