OREANDA-NEWS. The European Investment Bank (EIB) and BGL BNP Paribas signed a new partnership agreement on 17 February 2016 providing for a EUR 50 million loan for small and medium-sized enterprises (SMEs) and midcaps.

The EIB loan consists of a credit line to be used by BGL BNP Paribas to the benefit of companies with fewer than 3,000 employees. The projects financed are to be carried out in the European Union for a maximum amount of EUR 25 million per project. The businesses concerned are assured of benefitting from EIB intervention, notably through reduced interest rates on their loans or leasing arrangements.

Following on from the two EUR 50 million loans provided to companies in 2009 and 2014, the new partnership agreement enables BGL BNP Paribas to continue actively supporting the financing of the Luxembourg economy and thereby fostering its development.

The 2014 loan met with enormous success, with almost all of the funds distributed in less than 18 months. The beneficiaries are small firms, mostly working in transport, crafts and commerce. The funds were used primarily to finance the purchase of equipment such as vehicles and machines, as well as to finance the construction of sales areas or production facilities. Part of the funds also served to support companies working in the field of renewable energies.

Carlo Thill, Chairman of the Management Board of BGL BNP Paribas and Country Head of BNP Paribas Group in Luxembourg, said: “As Luxembourg’s leading corporate bank, it is important to us to offer our entrepreneur clients the best possible conditions and to contribute to financing their projects. This new agreement with the EIB upholds that commitment by enabling us to actively support the development of Luxembourg businesses.”

Speaking at the signature, Pim van Ballekom, EIB Vice President, said: “I am delighted about this new initiative with BGL BNP Paribas. It is important that entrepreneurs in Luxembourg, too, continue to benefit from the advantages of the EIB in financing their projects, and it is by uniting with partners with strong local presence that we will provide them with the best support. Our objective is to remain by the sides of small and medium-sized enterprises to support their competitiveness and growth and boost the economy in our regions.”

With its “Loans for SMEs and midcaps” programme, the EIB, the EU’s financing institution, works together with commercial banks that act as intermediaries, drawing on their branch networks and knowledge of SMEs and midcaps.

The amount of loans granted by the EIB to SMEs and midcaps is growing every year. The total rose to EUR 23.3 billion in 2015, distributed by 240 partners to over 120,000 SMEs and midcaps. This represents substantial support and assures entrepreneurs of the ongoing availability of financing for their projects.

In addition to BGL BNP Paribas, BNP Paribas in France, BNP Paribas Fortis in Belgium and BNL in Italy also have partnership agreements with the EIB, enabling the BNP Paribas Group to offer favourable lending terms to its SME and midcap clients in its four domestic markets.