European Investment Bank to provide €200m for Irish SMEs with AIB

Tuesday 30 April 2013 07.33
Another €200m for SMEs from European Investment Bank and AIB
Another €200m for SMEs from European Investment Bank and AIB

The European Investment Bank is to work with AIB in providing €200m for investment by small and medium companies across Ireland.

This represents the latest EIB support for SMEs in Ireland since an earlier lending programme intermediated by AIB in 2011. The bank has signed a total of ten SME lending programmes with the EIB since 1990.

The average loan under the latest lending scheme was €91,000 per company, with firms working in the agriculture, trade, health and manufacturing sectors benefiting. The money can be used to finance both medium and long-term investment needs.

The EIB said it was also considering providing funding for the Luas cross-city line, which will extend the service to Broombridge in Cabra, Dublin at an estimated cost of €370m.

Werner Hoyer, President of the EIB, said he looked "forward to examining the proposed Luas Cross City line" following discussions with Minister for Transport Leo Varadkar.

Mr Hoyer said he expected rapid progress on the project.

The Government has already committed to finance the Luas extension from the Department of Transport's capital programme, however Mr Varadkar said EIB funding would allow that to happen on more favourable terms.

Meanwhile, Mr Hoyer said that a Public Private Partnership to fund a motorway on the N11 between Arklow and Rathnew was ready to be signed off, while the EIB had also agreed in principle to fund a link road between Gort and Tuam in Galway.

The EIB is also set to consider applications to fund a bypass of New Ross on the N25 and the extension of the M11 from Gorey to Enniscorthy in Wexford.

The construction of these road and motorway projects are part of the Government's 2012 stimulus package.

EIB provided €505m in long-term loans last year

Last year the European Investment Bank's SME lending programme provided €13 billion to more than 200,000 companies across Europe.

The scheme supports the development of small and medium-sized businesses by providing credit on preferential terms including longer maturities, flexible schedules and lower interest rates to foster job creation.

The EIB provided nearly €505m in long-term low-cost loans for key investment in projects across Ireland last year.

This included financial support for investment in higher-education at Trinity College and UCD, schools, renewable energy and the water sector, as well as dedicated lending for small business investment.

Mr Hoyer, said the EIB recognises the crucial contribution of small business to creating jobs and stimulating economic growth across Europe.

"Ensuring access to finance for small businesses is essential for the Irish economy and the significant cooperation formally agreed today with AIB, our largest ever engagement in Ireland, demonstrates our strong engagement to support investment by local firms across the country", he added at the launch of the initiative.

''Today's signing is very much part of our broader strategy to stimulate SME growth. This fund will support investment in thousands of jobs across a range of sectors including agri-business, the services, retail and manufacturing, all underpinning vital jobs and contributing enormously to the economy,'' commented AIB's chief executive David Duffy.

The Minister for Jobs, Enterprise and Innovation, Richard Bruton, said that providing better access to finance for business is a central part of the Government's Action Plan for Jobs.

''Today's announcement that the European Investment Bank along with AIB will provide an additional €200m for SMEs in Ireland is a major boost for Irish business and jobs'', he added.