Lithuania and the European Investment Fund sign Holding Fund Agreement under the European Commission's initiative for SME’s

The Ministry of Economy and the Ministry of Finance in Lithuania and the European Investment Fund (EIF), have today signed a Funding Agreement to establish a Holding Fund in Lithuania under the European Commission’s initiative for SMEs (JEREMIE).

The overall capital amount assigned to the Fund will equal EUR 80m (275 million Litas) which EIF will manage on behalf of the Lithuanian Ministry of Economy; the money comes from the Operational Programme "Economic Growth" supported by the European Regional Development Fund (ERDF).

Representatives signing the agreement were Mr. Vytas Navickas, Minister of Economy of the Republic of Lithuania, Mr Rimantas Sadzius, Minister of Finance of the Republic Lithuania and on behalf of the EIF, Ms Eva Srejber, Vice President of the European Investment Bank with responsibilities for the Baltic States.

The JEREMIE Holding Fund will via intermediaries finance SMEs. EIF activities for the Holding Fund will include the development of new financial engineering structures and products, primarily in venture capital, micro-loans and guarantees, benefiting Lithuanian SMEs (small and medium-sized enterprises) and micro-enterprises. This initiative is part of an overall Government programme to stimulate further growth of the economy which will contribute to, renewed and enhanced job prospects and a healthy and expanding SME sector.

The EIB Vice President, Ms Eva Srejber, said: "With this very important agreement, the Lithuanian government further confirms its readiness to promote and adopt an innovative and efficient financial engineering approach to the financing of its SMEs and micro-enterprises. This new cooperation will no doubt encourage the competitiveness of small businesses, facilitate their access to finance and promote growth and job creation in Lithuania.”

The Minister of Finance, Mr Rimantas Sadzius, said: “The Government seeks to secure national economic growth, strengthen competitiveness and promote innovation by a variety of instruments, among which is also the use of EU structural assistance. In this area, we endeavour to make use of all emerging opportunities, and I am particularly glad that we can encourage business development with modern instruments”.

The Minister of Economy, Mr. Vytas Navickas, said: "One of the main problems, which SMEs are faced with, is limited access to finance. This is especially important for start-ups and companies with high growth potential, which need investments of higher risk. This project is aimed to improve SMEs’ access to finance and with this to promote realisation of innovative business ideas and establishment of new technological businesses in Lithuania".

About EIF

EIF’s central mission is to support Europe’s small and medium-sized businesses (SMEs) by helping them to access finance.  EIF designs and develops venture capital and guarantees instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. The EIF total commitment to Private Equity funds amounted to over EUR 4.5bn at end August 2008. With investments in over 290 funds, the EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. The EIF commitment in guarantees totalled over EUR 11.6bn in some 190 operations at end August 2008, positioning it as a major European SME guarantees and securitisation actor and a leading micro-finance guarantor.

Since its activities began, the EIF has indirectly supported some 810,000 SMEs and has thus tremendously contributed to economic growth and development in Europe.

About JEREMIE

JEREMIE (Joint European Resources for Micro to Medium Enterprises) is a joint initiative launched by the European Commission (DG Regio), EIB and EIF to improve access to finance for SMEs in the EU within Structural Funds framework for the period 2007 - 2013. JEREMIE enables the EU Member States and Regions to put money from the structured funds into holding funds that can finance SMEs, start-ups and micro-enterprises in a flexible and innovative way.  Holding funds will provide SMEs, through financial intermediaries, with a wide range of financing like equity, venture capital, guarantees and micro-loans, together with potential loans from EIB resources.  The Holding Fund allows the structural fund money to “be used several times” and hence more SME’s can benefit from the EU money. Sustainable, tailor-made and revolving financial instruments, aiming to develop and foster the role of entrepreneurship within the EU are key elements of the Lisbon agenda and help the structural funding to deliver greater benefits to the market (leverage effect).

So far, Funding Agreements have been signed with Greece, Romania and Latvia for a total of EUR 380m.

For further information, please contact Patrice Liauzu, +352 42 66 88 243, or visit www.eif.org/jeremie