Investment Plan for Europe: EUR 65 million for innovative businesses in Bulgaria and Slovakia as EIF and CIBANK sign agreement

The European Investment Fund (EIF) and CIBANK JSC (CIBANK) have signed a guarantee agreement to enhance access to finance to innovative small and medium-sized enterprises (SMEs) and mid-caps in Bulgaria and Slovakia.

This InnovFin Umbrella transaction with CIBANK, acting as a Coordinating Entity, includes an agreement with Československá obchodná banka a.s. (CSOB) (also part of KBC Group) and benefits from the support of the European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe.

The new agreement will allow CIBANK to provide loans at favourable terms to innovative SMEs and mid-caps for two years. EIF’s guarantee is provided under the “EU InnovFin finance for Innovators” initiative with the financial backing under Horizon 2020, the EU Framework Programme for Research and Innovation. The EU’s support for innovative Bulgarian and Slovakian companies under this transaction is expected to generate a portfolio of EUR 65 million of loans.

This transaction reflects 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.

European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “Today’s agreement between EIF and CIBANK, the fourth such ‘Umbrella-agreement’ targeting multiple countries under InnovFin, re-affirms our commitment to further improve the geographical coverage of the SMEs benefiting from EFSI across Europe. The EFSI will continue to play a crucial role in helping innovative SMEs in Bulgaria, Slovakia and beyond gain access to vital financing solutions.”

Speaking at the signing event in Sofia, EIF’s Head of Guarantees, Securitisation and Microfinance, Alessandro Tappi, commented: “I am pleased that EIF is signing another agreement with CIBANK. EIF benefits from a long-standing relationship with CIBANK through other agreements, notably under EFSI, and I am therefore grateful to CIBANK for having taken the opportunity to extend our cooperation. CIBANK benefits from a strong experience in SME financing, and today’s agreement will help CIBANK to reach out to even more small businesses in need of financing.”

Peter Andronov, Chief Executive Officer of CIBANK and Country Manager of KBC for Bulgaria, said: “We consider the signing of the InnovFin guarantee agreement between EIF and CIBANK as a further development of the successful partnership between the two institutions. Moreover we are proud of the fact that this agreement is one of the first umbrella transactions in Europe. The new guarantee agreement will enable innovative companies (both SMEs and mid-caps) to implement their ideas by using preferential terms of financing.”

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 CIBANK

CIBANK as part of Belgium KBC Group is one the most active Bulgarian banks working on the implementation of Financial Instruments to support the business. CIBANK is working in cooperation with various supranational and domestic financial institutions such as the European Investment Bank, European Investment Fund, European Bank for Reconstruction and Development, the Council of Europe Development Bank, the National Guarantee Fund, etc.

CIBANK is the first participator in the Juncker’s Plan in Bulgaria. In July 2015, CIBANK has officially signed its agreement with the European Investment Fund for the COSME programme. Thanks to the COSME guarantee, CIBANK is able to grant BGN 200 million to Bulgarian SMEs on preferential collateral requirements. One year later, CIBANK has signed over 500 transactions for approximately EUR 70 million.

CIBANK has financed over 480 SME projects for more than EUR 66 million at collateral requirements reduced to 50% and interest rates up to 2.5% lower than the standard rates by using the JEREMIE guarantee, managed again by the EIF. Thanks to the five credit lines of more than EUR 200 million, which the bank received from the EIB in the last nine years, CIBANK managed to support more than 500 business projects at reduced interest rates.

About the Investment Plan for Europe

The Investment Plan for Europe 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 projects. The Investment Plan is already showing results. The European Investment Bank (EIB) estimates that the projects and agreements approved for financing under the EFSI so far (by 26 September 2016) are expected to mobilise EUR 127.2 billion in total investments across 27 Member States and to support almost 290,000 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 provides guarantees and counter-guarantees on debt financing of between EUR 25,000 and EUR 7.5 million in order to improve 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:

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

CIBANK: Denitsa Hristova
Tel.: + 359 2 902 9728, E-Mail: dhhristova@cibank.bg

European Commission: Siobhán Millbright
Tel.:+ 32 (0)2 29 57 361, E-Mail: siobhan.millbright@ec.europa.eu