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The Boards of the European Investment Bank and European Investment Fund have approved support for the Future Growth Loan Scheme, a new EUR 300 million lending program to support investment by Irish companies most exposed to Brexit related uncertainties.
The Future Growth Loan Scheme is a key component of the Irish Governments Getting Business Brexit Ready programme announced by Finance Minister Paschal Donohoe in his Budget 2019 speech yesterday.
The new initiative will target agriculture and food companies across the country, as well as firms active in other sectors, through new long-term credit lines provided by leading Irish finance providers.
While there is no magic solution that prevents economic damage from Brexit, the EIB Group the European Investment Bank and the European Investment Fund recognises Irelands exceptional exposure and as EU institutions we are committed to supporting Irelands continued prosperity. That is why earlier this week supporting yesterdays Budget announcement by the Irish Government we approved the Future Growth Loan Scheme initiative to help Brexit-exposed firms get access to EUR 300 million of new financing essential to protect their growth and jobs. This builds on two successful SBCI loan guarantee schemes supported by the EIB Group in the last 24 months. The EIB Group will continue to look at ways to support growth capital for Irish firms. said Andrew McDowell, European Investment Bank Vice President.
SBCI is committed to strengthening access to finance and unlocking long term investment by Irish companies. We look forward to building on our close partnership with the EIB Group, which has now delivered some 750 million of guaranteed lending capacity to Irish businesses. This is being delivered through a model that has proven successful across Europe and ensures that finance providers can deliver long-term finance to companies that need it most. said Nick Ashmore, CEO of the Strategic Banking Corporation of Ireland.
The new lending programme will tackle the limited availability of long-term accessible loans for SME and midcap companies in Ireland as well as supporting new investment by companies exposed to UK markets.
As part of the Investment Plan for Europe the European Investment Bank Group will provide a EUR 150 million guarantee to the Strategic Banking Corporation of Ireland for the new initiative. The new scheme follows EIB Group support for the SME Brexit Loan Scheme and replicates the EIBs SME Initiative guarantee model that has successfully supported business investment across in 5 EU countries.
The scheme remains to be finalised, but will likely involve the following features:
maximum loan size of 3m
total guaranteed loans of 300m, inducing investments of 420m
most final beneficiaries will be SMEs with less than 250 employees, with some scope to include mid cap firms with up to 450 staff
at least 40% of the beneficiaries expected to be in the agribusiness sector
loan tenors of 8-10 years, with reduced collateral requirements
The Irish Government is expected to provide EUR 45 million for the new financing programme, with support from both the Department of Business, Enterprise and Innovation and the Department of Agriculture, Food and Marine. Details will be finalised in the coming weeks. The Future Growth Loan Scheme has been developed with these Departments together with the Department of Finance; and will be delivered by the SBCI.
The initiative builds upon two previous SBCI loan guarantee schemes supported by the EIB Group in the last 24 months, together supporting some 750m of lending capacity.
Over the last decade the EIB Group has provided more than EUR 6.7 billion for infrastructure and business investment across Ireland.