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Investment Plan for Europe: First EFSI transaction for Cypriot businesses as EIF and RCB Bank sign EUR 10 million agreement

    Date: 23 December 2016

The European Investment Fund (EIF) and RCB Bank (RCB) have signed the first EFSI agreement in Cyprus, which will provide EUR 10 million to innovative small and medium-sized enterprises (SMEs). This agreement benefits from the support of the European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe. Following the signature, the EFSI is now active in all EU 28 Member States.

Under the new agreement, RCB will provide attractive loans to innovative small and medium–sized enterprises (SMEs) and mid-caps over the next two years. EIF’s guarantee is provided under the “EU InnovFin Finance for Innovators” initiative, backed by Horizon 2020, the EU's research and innovation programme.

European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said "With today's agreement, the Investment Plan for Europe has reached another significant milestone. I am delighted that every Member State is now availing of the opportunities provided by the EFSI to boost investment in SMEs in order to create jobs and growth. I hope that today's agreement is the first of many transactions under the EFSI to be completed in Cyprus."

EIF Chief Executive, Pier Luigi Gilibert, commented: “We are delighted to be signing the first EFSI agreement in Cyprus and are pleased that loans under this programme are now available for innovative Cypriot companies. Innovation remains a key sector for growth and this transaction will help to contribute to the national innovation agenda. EIF is very proud to be delivering EFSI finance to all 28 member states ahead of schedule.”

RCB Bank Chief Executive Dr. Kirill Zimarin underlined the Bank’s commitment in working closely with the EIB, the EIF and the government in providing the necessary liquidity to the market and thus fulfilling its role in enhancing the real economy and noted: “Through such agreements, we are fulfilling an important part of our role. The role of the banking system in Cyprus is to provide the much needed liquidity to the healthy businesses that want to materialize their investment and growth plans. This is how we help the efforts of the government to achieve viable growth”.

These transactions reflect the EU's commitment to rapidly launch concrete initiatives under the EFSI, accelerating lending and guaranteeing transactions capable of boosting jobs and growth in the EU.

Speaking on the occasion, European Investment Bank President Werner Hoyer stated: “It is a great pleasure to be in Cyprus again today for the signature of the first EFSI agreement or “Juncker Plan” operation. I would like to underline that the EIB’s continued engagement in Cyprus, especially during the recent challenging years, is a sign of our absolute confidence in the country’s economy and at the same time pays tribute to the excellent investment projects that are coming out of Cyprus.”

During the signature ceremony at the Finance Ministry in Nicosia, Cyprus Minister of Finance Harris Georgiades stated: “I am especially pleased because the first financing agreement in Cyprus under the framework of “InnovFin” and the European Fund for Strategic Investments will allow RCB to develop new financial products, with its main characteristic being the significantly reduced collateral requirements on behalf of SMEs, so that it can support many SMEs, which, under different circumstances, may not have been in a position to find sufficient financing. This financing agreement being signed by the European Investment Fund and RCB, with the support of the European Fund for Strategic Investments, signals new loans with favourable terms for many Cypriot small and medium sized businesses. This important agreement –the first being signed in Cyprus- became reality with the support of the Investment Plan for Europe and is further proof that the Juncker Plan is bearing fruit.”

The EIB also signed today a second financing contract for a further EUR 40 million with RCB Bank, further enhancing competition in the banking sector and benefiting local companies, along with a State Guarantee signature between the EIB and the Republic of Cyprus.

The second loan with RCB Bank to support local companies follows an initial EUR 20 million loan signed with RCB in February 2016, which has already been fully allocated supporting more than 10 new investments.

The loans include dedicated lending under the “Jobs for Youth” programme, which offers even more favourable financial terms to eligible SMEs. The Jobs for Youth lending initiative, launched by the EIB in July 2013, is part of a wider European commitment to tackle youth unemployment requested by the European Council in June 2013. The scheme targets countries with high unemployment amongst young people. In order to benefit from financing under the “Jobs for Youth” window, SMEs in the fields of industry, commercial services and tourism need to fulfil a limited number of conditions, including the employment or training of young people.

“The EIB agreements signed today will provide continued support to private sector investments crucial for boosting economic growth and creating quality new jobs. They reaffirm the EU Bank’s strong support for Cyprus, especially in the recent challenging years for the economy of the country. Our actions confirm our commitment as only in the last 5 years we invested 1.3 billion Euros in new, priority investments,” added EIB President Hoyer.

The agreements were signed in a public ceremony today at the Finance Ministry in Nicosia attended by Cyprus Minister of Finance Harris Georgiades, EIB President Werner Hoyer and European Commission representative Georgios Markopouliotis and Dr. Kirill Zimarin of RCB Bank.

More information:

The EIB Group

The EIB Group consists of the European Investment Bank and the European Investment Fund, – the specialist arm providing SME risk finance. The EIB is the majority EIF shareholder with the remaining equity held by the European Union (represented by the European Commission) and other European private and public bodies.

The European Investment Bank

The European Investment Bank (EIB) is the European Union's bank. The EIB is the long-term lending institution of the EU and is the only bank owned by and representing the interests of the European Union Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. The EIB works closely with other EU institutions to implement EU policy.

As the largest multilateral borrower and lender by volume, the EIB provides finance and expertise for sound and sustainable investment projects which contribute to furthering EU policy objectives. More than 90% of EIB activity is focused on Europe but it also supports the EU's external and development policies.

Since 2010 the European Investment Bank has provided more than EUR 9 billion to ensure continued investment in crucial infrastructure including education, energy, waste and water and by companies across Greece.

About EIF

The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance 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. More information on EIF's work under the EFSI is available here.

About RCB Bank

RCB Bank Ltd, established on August 1st 1995, is one of the largest banks in Cyprus and is one of the European Banks under the direct supervision of the European Central Bank, through the SSM mechanism. The Bank operates 6 branches in Nicosia and Limassol and a branch in Luxembourg.

About the Investment Plan for Europe

The Investment Plan focuses on strengthening European investments to create jobs and growth. It does so by making smarter use of new and existing financial resources, removing obstacles to investment, providing visibility and technical assistance to investment project. The Investment Plan is already showing results. The projects and agreements approved for financing under the EFSI as of 14 December are expected to mobilise over EUR 164 billion in total investments across 28 Member States and to support more than 388,000 SMEs.

Building on this success, the European Commission on 14 September 2016 proposed extending the EFSI by increasing its firepower and duration as well as reinforcing its strengths. Find the latest EFSI figures including a break-down by sector and by country here. For more information see the FAQs.

About InnovFin

The InnovFin SME Guarantee Facility is established under the “EU InnovFin Finance for Innovators” initiative backed by Horizon 2020, the EU Framework Programme for Research and Innovation. It provides guarantees and counter-guarantees on debt financing of between EUR 25,000 and EUR 7.5 million and improves access to loan finance for innovative small and medium-sized enterprises and small mid-caps (up to 499 employees). The facility is managed by EIF, and is rolled out through financial intermediaries – banks and other financial institutions – in EU Member States and Associated Countries. Under this facility, financial intermediaries are guaranteed by EIF against a proportion of their losses incurred on the debt financing covered under the facility.

Press contacts:

David Yormesor
Tel.: + 352 24 85 81 346
E-Mail: d.yormesor@eif.org

RCB Bank:
Michael Maratheftis
Tel.: +357 25 837300
E-mail:  maratheftis@rcbcy.com

European Commission:
Enda McNamara

Tel.: +32 22964976
e-mail: enda.mcnamara@ec.europa.eu

EIB Press contact:
Philip Pangalos (in Athens)
Tel.: +30 210 7257336
M: +30 6932421397
E-mail: p.pangalos@eib.org. www.eib.org

Website: www.eib.org/press  
Press Office: +352 4379 21000 – press@eib.org

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