EIB provides EUR 50 million support for Cyprus SMEs and Midcaps through financing agreement with Hellenic Bank
The European Investment Bank (EIB) today signed a EUR 50 million loan in Cyprus with Hellenic Bank to support investments by local small and medium-sized enterprises (SMEs) and MidCaps, bolstering growth and creating 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 European Investment Bank’s credit line to Hellenic Bank to further support local SMEs and Midcaps, which are the backbone of the Cypriot economy,” said European Investment Bank President Werner Hoyer.
Today’s loan with Hellenic Bank is the third, bringing the total signed with Hellenic Bank to EUR 100 million, and builds on a scheme which the EIB with Ministry of Finance started implementing in Cyprus with local banks two years ago.
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 615 million with about EUR 220 million of that money already benefiting some 240 new investments.
“The EIB is firmly committed to supporting SMEs and their investment plans. The EIB cannot directly finance such investments but can do so through partnerships with financial institutions. These institutions have relationships with local businesses and can act as intermediaries for EIB financing. The EIB loan signed today with Hellenic Bank will further support private sector investment crucial for boosting economic growth and creating new jobs. Hellenic Bank has been a very reliable partner for the EIB and I would like to thank the management of the Bank for its collaboration,” added EIB President Hoyer.
Irena Georgiadou, Chairwoman of Hellenic Bank, stated: “Our role is for the decisive contribution to the recovery of the Cyprus economy and this will only happen through the financing of growth and the support of healthy businesses.”
The Hellenic Bank 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.
The finance agreement and State Guarantee were signed in Nicosia today in a public ceremony attended by EIB President Werner Hoyer, Permanent Secretary of Cyprus Ministry of Finance Christos Patsalides and Chairwoman of Hellenic Bank Irena Georgiadou.
Earlier in the day, European Investment Bank President Werner Hoyer met with the President of the Republic of Cyprus Nicos Anastasiades at the Presidential Palace in Nicosia and discussed bilateral issues, as well as economic and political developments.
Today’s EIB loan to Hellenic Bank follows a similar EUR 100 million loan to support investments by local SMEs and MidCaps signed with Bank of Cyprus in February.
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.