Peter Bandilla, Deputy Adviser, Lending in Central Europe European Investment Bank (EIB): Cooperation with local banks to support SME and Mid-Cap investments 1st Danube Financing Dialogue - EU Strategy for the Danube Region (EUSDR) Priority Area 10 Vienna, 22nd March 2012 Peter Bandilla, Deputy Adviser, Lending in Central Europe

European Investment Bank Introduction on EIB EU’s long-term lending bank set up in 1958 by the Treaty of Rome Shareholders: 27 EU Member States Funding on capital markets: (EUR 76 Bn in 2011) Financial strength: AAA-Rating, voluntary application of Basle rules Business model: “non-profit but also no loss” Lending policy: Anti-cyclical in times of financial crisis European Investment Bank

EIB Lending in 2011 and Shareholdership European Investment Bank

EIB Priority Objectives (within the EU) Convergence Trans-European Networks (TENs) Environmental sustainability Sustainable, competitive and secure energy Knowledge Economy Small and medium-sized enterprises (SMEs) and mid-cap enterprises (midcaps) EIB loans for SMEs of EUR 10.5bn in Europe in 2011: Industry, Energy and transport and Services including tourism European Investment Bank

European Investment Bank EIB Loan for SMEs European Investment Bank 5

European Investment Bank Definition of “EIB Loan for SMEs and Mid-Caps” SME final beneficiaries: any autonomous enterprise or group employing < 250 people MID-CAP final beneficiaries: any autonomous enterprise or group employing < 3000 people Investment to be financed: most investment projects costing up to EUR25 million (limited list of excluded sectors) Financing: up to 100% of project cost or EUR 12.5 million, whichever is smaller Term: up to economic life of project (2 years minimum, 12 years maximum) Project cost can include: used assets, distribution networks and international expansion, long term working capital needs, SME transmission (generation change, staff buy-in; up to EUR 1 million) European Investment Bank

How do SMEs and Mid-Caps benefit? Enhancing market capacity - intermediary undertakes to lend at least twice EIB Loan for SMEs and Mid-Caps( “2 x EIB” approach) Transparency - intermediaries must inform SMEs and Mid-Caps of EIB’s presence and impact on their financing conditions: can be done through ‘product labelling’ or direct communication information on website Transfer of value added - commitment by intermediaries to pass on an agreed financial advantage to the SMEs and Mid-Caps: amount and method of transfer negotiated on a case by case basis – eg interest rate reduction, cashback at signature reporting of method and amount of benefit transferred Accountability - speed of allocation to SMEs and amount of benefit transferred seen as key ‘performance indicators’ by EIB European Investment Bank

European Investment Bank EIB Global Loan Allocations in the Danube Region EUR 6.3 bn between 2007-2011 for 16,457 individual allocations (average allocation size of EUR 385,315) 2011 was a record year with EUR 2.1 bn allocations (# 6,468) European Investment Bank 8

European Investment Bank EIB Global Loan Partners in the Danube Region European Investment Bank 9

European Investment Bank EIB Global Loan Partners in the Danube Region http://www.eib.org/projects/topics/sme/intermediaries/europe.htm European Investment Bank 10

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