Quantcast
Friday , September 22 2017
Breaking News
Home / International Customs / European investment bank hands Portugal state bank €300m
European investment bank hands Portugal state bank €300m

European investment bank hands Portugal state bank €300m

LISBON: The European Investment Bank (EIB) will grant a 300 million euro loan to Caixa Geral de Depósitos (CGD) to facilitate financing of small and medium-sized investment projects implemented by Portuguese SMEs and midcaps.

Part of this loan will also be aimed at funding projects of public entities and other promoters in sectors including health, education and energy and also to finance public service facilities.

The first 150 million euro tranche of the agreement was signed late last week in Lisbon by EIB Vice-President Román Escolano and CGD’s CEO Paulo Macedo and CFO José Brito.

This 300 million euro loan will be complemented by financing for the same amount provided by CGD for the targeted projects, leading to a total of 600 million euros of financing that will be made available by CGD to SMEs and midcaps.

SMEs and midcaps will benefit from access to long-term financing on favourable terms for their investments and working capital needs as CGD will pass on to final beneficiaries the EIB’s advantageous financing in terms of both maturity and interest rates. The EIB loan signed today with CGD will enable financing of individual projects of up to 12.5 million euros for SMEs and up to 25 million euros for midcaps.

CGD is a long-standing and important financial intermediary for the EIB in Portugal in supporting small and medium-sized Portuguese companies. The first finance contract between the EIB and CGD was signed already in 1980 prior to Portugal joining the EU in 1986. A similar financing agreement between the EIB and CGD was signed in 2014 for 300 million euros and helped to support the Portuguese economy by financing more than 500 projects, mainly in the manufacturing and trade sectors.

“The loan we are signing today with CGD will contribute to strengthening the productivity and competitiveness of Portuguese SMEs and we trust that this will have a positive and direct impact on economic growth and employment”, said EIB Vice-President Román Escolano at the signing ceremony. “Supporting small and medium-sized companies with long-term and advantageous financing is one of the EIB´s priorities in Portugal as SMEs account for 80 percent of total employment in the country.”

“This loan reinforces CGD’s already strong capacity for financing Portuguese corporates, particularly in the area of SMEs, contributing to the bank’s leading position in providing long-term credit to the Portuguese economy and, in this particular case, enabling corporates to benefit from a lower funding cost”, said CGD CEO, Paulo Macedo. “It is also fully in line with one of the main drivers of CGD’s Strategic Plan, namely to support Portuguese corporations in their investment plans and external trade development.”

In 2016, the EIB Group provided 33,600 million euros for small businesses, reaching 300,000 companies throughout Europe. Last year, in Portugal the EIB Group signed loan agreements totalling 1,780 million euros including 1,196 million euros that contributed to supporting more than 8,200 Portuguese SMEs.