EIB provides EUR 100 million support for Cyprus SMEs and Midcaps through financing agreement with Bank of Cyprus
The European Investment Bank (EIB) today signed a new EUR 100 million loan with the Bank of Cyprus to support investments by local small and medium-sized enterprises (SMEs) and Midcaps, bolstering growth and creating quality new jobs for young people. A State Guarantee agreement between the EIB and the Republic of Cyprus was also signed.
“I am very pleased to be in Nicosia today to extend the EIB’s credit line to Bank of Cyprus to further support local SMEs and Midcaps, which are a vital pillar of the Cypriot economy,” said Jonathan Taylor, European Investment Bank Vice President responsible for lending in Cyprus.
Today’s loan with the Bank of Cyprus is the fourth one and builds on a scheme which the EIB with Ministry of Finance started implementing in Cyprus with local banks two years ago. The EIB has already signed EUR 185 million of loans with the Bank of Cyprus, bringing the total of loans approved to EUR 285 million.
“The European Investment Bank, Europe’s long-term lending institution, is firmly committed to supporting small and medium sized companies, which are the backbone of the Cypriot economy, and to boost employment opportunities for young people. The EU bank has demonstrated this engagement throughout the crisis and again today,” said EIB Vice President Taylor.
In order to support smaller size enterprises with investment needs of up to EUR 25 million, EIB has partnered with 10 local banks and has so far signed a total of EUR 475 million with about half of that money already benefiting some 230 new investments.
“The EIB has been a key and reliable partner for Cyprus over recent years, providing long-term financial support for crucial infrastructure, as well as backing investment in the knowledge economy, innovation and small businesses. The EIB will remain active and is committed to supporting economic growth and helping local firms invest and create new jobs. Across Europe, including here in Cyprus, small businesses are the backbone of the economy. The EIB loan signed today with the Bank of Cyprus will further support private sector investment crucial for boosting economic growth and creating quality new jobs,” added EIB Vice President Taylor.
Charis Pouangare, Bank of Cyprus, Director of Consumer Banking & SME, stated: “The European Investment Bank is renewing its cooperation with Bank of Cyprus, offering an additional EUR 100 million for lending to SMEs, thus contributing to sustainable development and youth employment. Based on the above, the total amount that will be extended to Cypriot SMEs will be EUR 134 million, since BoC will contribute from its own funds an additional EUR 34 million.”
The Bank of Cyprus loan includes dedicated lending under the “Jobs for Youth” programme, which offers even more favourable financial terms to eligible SMEs. The Jobs for Youth lending initiative, launched by the EIB in July 2013, is part of a wider European commitment to tackle youth unemployment requested by the European Council in June 2013. The scheme targets countries with high unemployment amongst young people. In order to benefit from financing under the “Jobs for Youth” window, SMEs in the fields of industry, commercial services and tourism need to fulfil a limited number of conditions, including the employment or training of young people.
“These loans will be offered with particularly favourable terms to local SMEs and Midcaps. The amount of funding will vary between EUR 1.5 million and EUR 12.5 million with very competitive pricing and repayment periods of 2-12 years. Companies that meet the ‘Jobs for Youth' initiative criteria will be offered additional financing advantages”, Mr Pouangare added.
The finance agreement and State Guarantee were signed in Nicosia today in a public ceremony attended by EIB Vice President Jonathan Taylor, Cyprus Ministry of Finance, Permanent Secretary, Christos Patsalides and Bank of Cyprus, Director of Consumer Banking & SME, Charis Pouangare.
In 2016, the EIB Group maintained its high level of activity in Cyprus, providing a total of EUR 240 million to the local economy as follows:
- EUR 175 million to support private sector investments implemented by small and medium sized enterprises;
- EUR 40 million for a water pipeline to pump drinking water from the Vasilikos desalination plant to the Greater Western Nicosia Region;
- EUR 15 million for the construction of two anti-flooding rain water stations in Larnaca;
- EUR 10 million by the European Investment Fund, which is part of the EIB Group, for the guarantee of new investments born by innovative companies. This was the first operation in Cyprus backed by the European Fund for Strategic Investments.