The European Investment Bank is offering extra support to companies impacted by Covid-19, and funding to companies working on medical solutions related to the virus.
This week, the European Investment Bank (EIB) Group announced that it is “rapidly mobilising” up to €40bn to help fight the crisis caused by Covid-19, while calling on EU member states to set up a further guarantee for SME and mid-cap support from EIB Group and national banks.
In a statement, the EIB Group said it wants to offer support to European companies feeling the strain of the coronavirus pandemic and is creating extra funding for the healthcare sector for emergency infrastructure and development of cures and vaccines.
EIB president Werner Hoyer said: “Covid-19 is exacting a tragic toll in human suffering across Europe and the world. The Bank, and I personally, are close to the people hit by the contagion. The pandemic is also having a devastating economic impact, which is already showing.”
Help needed ‘quickly’ for SMEs
“We need a strong European response and we need it now,” Hoyer added. “Europe needs another ‘whatever it takes’ moment. The EU bank will help in this crisis as it did in every past moment of hardship in Europe, be it due to economic downturns or natural catastrophes. We will immediately focus on assisting small and medium companies and mid-caps. They badly need help, and they need it quickly.
“In partnership with the member states, the European Commission and other financial partners, including most notably national promotional banks, we want to develop a substantial financial package that can be rolled out straight away, without recourse to new legislation.”
The EIB is proposing to offer dedicated guarantee schemes to banks based on existing programmes for immediate deployment, mobilising up to €20bn in financing; dedicated liquidity lines to banks ensuring additional working capital support for SMEs and mid-caps, amounting to €10bn; and dedicated asset-backed purchasing programmes to allow banks to transfer risk on portfolios of SME loans, mobilising another €10bn of support.
In a statement, the bank said: “All these actions can be implemented quickly to ease liquidity shortages and will be implemented in partnership with national promotional banks wherever feasible.”
Hoyer also called on member states to set up a significant and scalable additional guarantee for the EIB and national promotional banks to ensure that access to finance for SMEs and mid-caps remains open. “This would help reassure markets and citizens at this time of unprecedented security,” he said.
Acting against Covid-19
The EIB also announced that it would be using its existing financial instruments shared with the European Commission to finance projects that work towards halting the spread of, finding a cure for, and developing a vaccine against coronavirus.
The EIB will support emergency measures to finance urgent infrastructure improvements and equipment needs in the health sector, using existing framework loans or undisbursed amounts from existing health projects. The EIB’s current pipeline of projects in the health sector amounts to around €5bn.
“We will build on what we already do for the health sector,” Hoyer said. “We are already in contact with companies and organisations seeking to fund the search for Covid-19 vaccines and medication. We are all living through trying times, and the EIB Group will work without pause to ensure the EU bank contributes to the rapid resolution of this terrible crisis.”