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EIF signs deal to channel €1bn to SMEs in central and eastern Europe

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The European Investment Fund (EIF) and UniCredit have signed a deal that looks to channel €1bn to 2,500 small-to-medium enterprises across central and eastern Europe.

Announced yesterday, the deal will see the EIF provide two guarantees worth around €370m to UniCredit Group to finance approximately €1bn of investment made by small businesses in Bulgaria, Croatia, the Czech Republic, Hungary, Romania, Slovakia and Slovenia. The transactions are backed by InvestEU, the European Union’s long-term funding programme to support sustainable investment, innovation and job creation in Europe.

According to the EIF, the funds will primarily go towards investment contributing to the twin green and digital transition, but will also aim to boost the cultural, educational and social sectors.

“InvestEU is a key instrument for supporting SMEs and small mid-caps across Europe,” said Paolo Gentiloni, the European Commissioner for Economy. “Thanks to this agreement, businesses in Bulgaria, Croatia, Czechia, Hungary, Romania, Slovakia and Slovenia will be able to accelerate their transition towards a greener and more digital economy – for instance with investments in the energy efficiency of residential buildings. We are proud to provide the necessary support to businesses in these countries to achieve this goal and create jobs.”

Sustainable economy

The scheme will take place under the InvestEU programme, which looks to provide the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for the European Union’s policy priorities, such as the European Green Deal and the digital transition.

This is far from the only project undertaken by InvestEU this year. In March, it gave the go-ahead to a slew of new projects for the European Bank for Reconstruction and Development. Under the auspices of the various projects, investments totalling €1.1bn will be used to boost green and sustainable projects in the municipal, transport and energy sectors.

It was also back in March that the European Commission (EC), European Investment Bank (EIB), and the EIF signed a guarantee agreement, known as InvestEU, that contained nearly €20bn of funding for investment projects across the continent. According to the EC at the time, there would be €19.65bn of funding to support work in four policy areas: research, innovation and digitisation; small and medium-sized businesses; and social investment and skills.

Skills development

The EC and the EIB also signed an agreement known as the InvestEU Advisory Hub that will provide up to €270m in funding for market development, which it says will develop skills and advisory services in the same policy areas.

InvestEU consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. By providing a €26.2bn EU budgetary guarantee to support finance and investment operations, the InvestEU programme aims to attract public and private financing aiming to mobilise at least €372bn in additional investment by 2027.

All this follows an earlier announcement, made in February, that the EBRD and European Commission had signed a €60m agreement with InvestEU to provide advisory support for infrastructure, digitalisation, and innovative investment projects.

Pete Carvill

Pete Carvill is a reporter, writer, and editor based in Berlin who has been writing for the B2B and mainstream media since 2007. He is a contributing writer for Expert Investor and, in addition, has...

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