European Investment Fund and „Swedbank“ Lithuania signs a EUR 104 million agreement for financing Lithuanian SMEs
Date: 05/02/2010 |
 |
European Investment Fund (EIF) and Swedbank Lithuania today signed an agreement under which Swedbank will provide loans worth EUR 104 million (over LTL 359 million) to Small and medium sized enterprises (SMEs) in Lithuania.
Swedbank will manage the newly created Funded Risk Sharing product under the JEREMIE initiative, designed to stimulate lending from banks to SMEs over a defined two year period. The EIF will provide EUR 52 million to Swedbank, which will be matched by an equal amount from the Bank, therefore totalling EUR 104 million. This transaction enables Swedbank to accelerate lending to Lithuanian SMEs during the current economic recession.
Richard Pelly, Chief Executive of the European Investment Fund stated, "This Funded Risk Sharing instrument has been designed and developed by the EIF for businesses in response to the credit crisis. The EIF is managing this product in several Member States for the benefit of local businesses and Lithuania was the first country to benefit from it. "
Swedbank is always financing companies, which meet the criteria to get such financing. We believe that an agreement with EIF will contribute to financing of SMEs and higher investment activities of these companies will stimulate recovery of the Lithuanian economy", says Vytautas Bučiūnas, Head of Corporate Banking Division at Swedbank.
The Funded Risk Sharing instrument is structured to combine capital from the Holding Fund with capital provided from the bank on an equal basis. The EIF is also implementing a number of other financial engineering instruments using the Holding Fund Structure in Lithuania and further announcements are expected shortly.
This transaction results from a ‘call for expression of interest' which attracted 8 banks operating in Lithuania. The EIF conducted a thorough analysis to select the applicants against set criteria and using the EIF's expertise built up through providing guarantees to financial institutions across Europe over the past 15 years.
The EIF has already signed the contracts with Siauliu bankas and SEB bankas in Lithuania. It is expected that this instrument will stimulate further SME lending up to a total of EUR 294 million. These transactions are a key part of the EIF's implementation activities in managing the JEREMIE Holding Fund which mobilises European Regional Development Funds.
About JEREMIE
JEREMIE (Joint European Resources for Micro to Medium Enterprises) is a joint initiative launched by the European Commission (DG Regional Policy) and the European Investment Bank group to improve access to finance for SMEs in the EU within the Structural Funds framework for the period 2007 - 2013. JEREMIE enables the EU Member States and Regions to put money from the structural funds and also national resources into holding funds that can finance SMEs in a flexible and innovative way. Since the products will be provided on a repayment basis, funding will be reinvested and hence more SMEs will benefit from the EU resources.
EIF has currently signed 7 National (Greece, Romania, Slovakia, Latvia, Lithuania, Cyprus and Bulgaria) and 3 Regional (in France - Languedoc Roussillon, Italy - Campania and Sicily) Holding Fund agreements.
The new initiative aims at developing and fostering the role of entrepreneurship within the EU in order to meet the objectives of the Lisbon agenda and help structural funds to deliver greater benefits to the market.
In Lithuania JEREMIE Holding Fund is financed from the EU Structural Funds under 2007-2013 Economic Growth Operational Programme of 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 net commitments to private equity funds amounted to over EUR 3.7bn at 30th June 2009. With investments in over 300 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 totaled over EUR 13.3bn in close to 190 operations, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.
About Swedbank Group:
Swedbank's vision is to be the leading financial institution in the markets where the Group is present. Swedbank has 9,5 million retail customers and 550,000 corporate customers in the Baltic countries, Ukraine and Sweden. The Group is also present in Denmark, Finland, Russia, Luxembourg, Spain, USA, Norway, China, and Japan. As of September 2009 the Group had total assets of SEK 1,815 billion and approximately 20,000 employees.
Contacts: David Yormesor, EIF Communications Unit, tel +352 426 688 346, e-mail inforbd@eif.org
Orinta Barkauskaitė, „Swedbank" Lithuania Communication manager, tel. + 370 5 268 4244