European Guarantee Fund of €25 billion (COVID-19 response)
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Responding to today’s challenges
The rapid spread of COVID-19 poses one of the European Union’s biggest socio-economic challenges since the end of the Second World War.
As an immediate response to this unprecedented crisis, the EIB Group, including the European Investment Fund, is establishing of a European Guarantee Fund of €25 billion that will support up to €200 billion of finance for companies, with a special focus on SMEs. This is on top of the emergency measures already in place to address the impacts of the coronavirus and support SMEs and the health sector.
But our response to today’s priorities goes beyond the EU borders. Poverty, inequality, environmental degradation, climate change—the world faces enormous challenges. Through our development impact, we help countries worldwide with innovative solutions to promote sustainable growth, reduce poverty and inequality, and improve lives.
Coronavirus outbreak: EIB Group’s response
On April 16 the EIB Board of Directors meeting approved the EIB Group’s response to economic effects of COVID-19 crisis: a €25 billion European guarantee, whose goal is to deliver up to €200 billion for the European economy. The Board decision follows the Eurogroup’s recommendation to include the EIB’s proposal into the joint EU response package.
Mobilising billions for the economic recovery
A protection shield
The European Investment Bank will set up a protection shield for European companies. The economic and financial dynamics immediately ahead of us are approaching a tipping point: we have very little time left to put in place any measures to safeguard the European economy from this unprecedented shock.
The EIB Group is creating a pan-European guarantee fund of €25 billion. This guarantee fund will enable the EIB Group – in partnership with local lenders and national promotional institutions – to scale up its support to SMEs, mid-caps and corporates in the real economy by mobilising up to €200 billion, in addition to the support package announced already.
How will the guarantee fund work
Who can benefit?
How, where and when can companies apply for these funds?
Additional to the emergency measures already announced on 16th March 2020
An immediate response to the crisis
To counteract this unprecedented shock, the EIB Group has proposed a financing package that will go towards bridging loans, credit holidays and other measures designed to alleviate liquidity and working capital constraints for SMEs and mid-caps. The EIB Group, including the European Investment Fund, which specialises in support for SMEs, will work through financial intermediaries in the Member States and in partnership with national promotional banks.
The financing package consists of:
- Dedicated guarantee schemes based on existing programmes for immediate deployment. A €1 billion guarantee tranche will mobilise up to €8 billion of SME financing.
- Dedicated liquidity lines to banks to ensure additional working capital support for SMEs and mid-caps of €10 billion;
- Dedicated asset-backed securities (ABS) purchasing programmes to allow banks to transfer risk on portfolios of SME loans, mobilising another €10 billion of support.
All these actions can be implemented quickly to ease liquidity shortages and will be executed in partnership with national promotional banks wherever feasible.
A comprehensive response to the pandemic outside the EU
The EIB Group has announced details of a comprehensive response to the coronavirus pandemic outside the EU that will provide up to €5.2 billion in the coming months. This financing is part of the Team Europe response and supported by guarantees from the EU budget. It will both strengthen urgent health investment and accelerate long-standing support for private sector investment that reflects financing needs in more than 100 countries around the world.
The immediate fast-tracked support will help to sustain jobs and livelihoods in sectors most threatened by the economic and social impacts of the coronavirus, and will be followed by additional long-term health and business financing as needed.
Our support in a nutshell:
- Accelerated financing and targeted technical assistance for partners in 100 countries as part of the Team Europe response package
- Short-term support for health and business investment in Africa, Eastern and Southern Neighbourhood Countries, Western Balkans, Asia and Latin America
- Increased backing for business impacted by the pandemic
COVID-19 and digitalisation
In the fight against the Coronavirus, digital technology is playing an unprecedented role in the maintenance of daily life and economic and social activities, as well as the recovery of industries and business activities. The Coronavirus pandemic could become a tipping point for digitalisation - a dawn of a new era - by accelerating the maturity of digital technology: What was once a nice to have could now become a crucial to have.
In this context, we have published the report “Who is prepared for the new digital age? Evidence from the EIB Investment Survey”.
Find out how you can get support for SMEs, mid-caps and healthcare infrastructure
- Support for SMEs and mid-caps
- Support for healthcare
For SMEs and mid-caps looking for finance
- Intermediated lending: Find out how the EIB and its partners can help your business
- Direct lending for mid-caps: Discover what the EIB can offer
We will be publishing the list of EIF intermediaries for COVID-19 related financing support on EIF’s dedicated page as soon as the relevant financing agreements have been concluded.
Meanwhile you can check here the EIF’s current network of financial intermediaries in your country.
For financial institutions willing to partner with the EIB Group
Please visit our dedicated pages for the main product categories:
The EIF guarantees will be supported by the EU budget under the European Fund for Strategic Investments (EFSI).