The EU bank

The European Investment Bank (EIB) and BGL BNP Paribas have concluded a partnership agreement whereby the latter will distribute a EUR 50 million “new generation” EIB loan for SMEs. BGL BNP Paribas’s branches will be the financial intermediaries, on lending the EIB funds to small and medium-sized businesses to support their investment projects. This is the first such operation in the Grand Duchy of Luxembourg: the necessary procedures are in place and an information campaign will be launched on 24 September 2009.

This “EIB loan for SMEs” consists of a credit line that BGL BNP Paribas will deploy in support of small businesses with fewer than 250 employees operating in a wide range of economic sectors eligible for EIB financing. The projects financed must be carried out within the European Union and cost a maximum of EUR 25 million each. Refinancing operations or purely financial or property transactions will not qualify. This new type of EIB loan for SMEs is designed to be more flexible and transparent, including in terms of the information provided to businesses. The beneficiary SMEs are assured and explicitly informed that the advantages of EIB funding will be passed on to them, mainly in the form of a lower interest rate.

When the operation was finalised on 23 September in Luxembourg, Carlo Thill, Chairman of BGL BNP Paribas’s Management Committee stated: “We are proud to be able to take part in this EIB financing operation and lend our support to small businesses in Luxembourg by once again broadening our range of products and services in a further illustration of the ongoing development of our activity and our deep roots in Luxembourg’s economy. The EIB loan represents another effective means to help small firms get through the current crisis. As a reliable partner and leading lender to small businesses we did not hesitate to join in with this operation”.

EIB President Philippe Maystadt stressed “the importance, especially at a time of crisis, of maintaining the flow of credit to small businesses, supporting their activities and investment projects and securing the jobs that they provide”. He underlined the EIB’s commitment in this sense and pointed to the resources mobilised and actions taken by the institution in a very short space of time.

The Heads of State or Government of the EU countries asked the EIB last autumn to update and diversify its loan offer to the SME sector to help it weather the financial storm. The Bank responded immediately by setting up a programme that will be further expanded in the months ahead.  “In under a year we have made this new type of loan for SMEs available in 22 different EU countries and I am particularly pleased to be able to announce this first partnership in the EIB’s host country, the Grand Duchy of Luxembourg”. 

With this agreement, BNP Paribas will now contribute to the development projects of its customers in four of its European domestic markets. The BNP Paribas group has already benefited from EIB refinancing agreements in France through BNP Paribas, in Italy through BNL and in Belgium through BNP Paribas Fortis. In October 2008, for example, BNP Paribas introduced in France the first “EIB loan for SMEs” under the programme to support SME funding initiated by the EIB. And now through its subsidiary BGL BNP Paribas, Luxembourg is the fourth European domestic market to benefit from access to an EIB loan.

In total, in partnership with the banking sector, the EIB has now made EUR 8 billion available to SMEs in the EU countries since October 2008 through 74 operations under its programme of “EIB loans for SMEs”, significantly improving the way in which the EU’s long-term lending institution supports small and medium-sized firms.

Background information:

About the EIB

The EIB is the long-term lending arm of the European Union, and is wholly owned by the 27 EU member states. Its mission is to support through its activities the development of EU policies. It borrows funds on the capital markets (with an AAA rating) in order to finance on the keenest terms projects that are in line with EU strategies. In 2008 the EIB signed loans totalling EUR 57.6 billion; EUR 51.5 billion was for projects within the European Union. The EIB loans contribute chiefly to economic and social cohesion, environmental protection, research and innovation, support for SMEs, the development of trans-European transport and energy networks, and sustainable, competitive and safe energy.

About BGL BNP Paribas

BGL BNP Paribas (www.bgl.lu) is one of the largest banks in the Grand Duchy of Luxembourg, with a balance sheet totaling EUR 52.8 billion at 30 June 2009. Now a leader on its domestic market, it offers an especially wide range of financial products to individuals, professionals, private banking clients and businesses. BGL BNP Paribas is Luxembourg’s number-one provider of banking services to professionals and small- and medium-size companies, and number two in services for individuals. It is also the leader for bancassurance.

About BNP Paribas

BNP Paribas (www.bnpparibas.com) is one of the 6 strongest banks in the world according to Standard & Poor's. With a presence in 85 countries and more than 205 000 employees, 165 200 of which in Europe, BNP Paribas is a global-scale European leader in financial services. It holds key positions in its three main activities: Retail Banking, Investment Solutions and Corporate & Investment Banking. The Group has four domestic retail banking markets in Europe: Belgium, France, Italy and Luxembourg. BNP Paribas also has a significant presence in the United States and strong positions in Asia and the emerging markets.