The European Investment Fund (EIF), part of the European Investment Bank Group (EIB and EIF), joins forces once more with Banco Sabadell to support the economic recovery of SMEs (up to 250 employees) and Mid-Caps (between 250 and 500 employees). The EIF has granted Banco Sabadell a €103 million guarantee, which will enable the Spanish bank to mobilise finance amounting to a total of €148 million.
This is the EIF’s first operation in Spain under the Pan-European Guarantee Fund (EGF), which will offer support to early-stage technology venture capital firms and companies in the renewable energy industry.
The EGF, which has been operational since October and was approved by the European Council on 23 April 2020 as part of the package of measures introduced by the European Union (EU) to respond to the economic impact of COVID-19, aims to support companies, focusing particularly on SMEs.
The loans that Banco Sabadell has undertaken to channel via Sabadell Venture Capital and SINIA Renowables, will be used to promote investment and working capital in SMEs and Mid-Caps. Specifically, it will target startups via Venture Debt operations and companies in the renewable energy industry with products such as senior “bridge”/construction loans, loans for photovoltaic and other systems for self-consumption, and long-term subordinated loans for solar power plants.
By taking up to 70% of the risk on the loans granted by Banco Sabadell to SMEs and Mid-Caps, the EIF will promote the granting of new finance and indirectly support the entire ecosystem of startups and renewables.
“The EIF has introduced a number of financial support measures, including the EGF, which, with the backing of most EU member states, will be a key factor in alleviating the devastating effects that the pandemic is having on the economy”, said Alain Godard, Chief Executive of the EIF. “We are delighted to join forces with Banco Sabadell once more to support small and medium-sized enterprises in Spain, which are the backbone of the country’s economy”.
“Small and medium-size businesses are the companies hardest hit by the economic crisis caused by the pandemic. Supporting their economic recovery is one of the EIB main priorities and the EGF will play a key role in achieving this. For this reason, about 50% of the 2020 total EIB Group activity in Spain was dedicated to meeting their funding and liquidity needs. Thanks to our cooperation with Spanish banks, last year we provided nearly €4.2 billion in support to SMEs,” said EIB Vice-President Ricardo Mourinho Félix, responsible for the EIB Group operations in Spain.
Carlos Ventura, General Manager of Banco Sabadell, stated that “startups are the big companies of the future. This agreement with the EIF, under the EGF, enhances our abilities to offer them financing solutions designed to support them even further. Historically, Sabadell has always played a prominent role as the bank of companies in the renewables industry. At this time of considerable growth in the sector, this agreement with the EIF adds to the range of financing options available to medium-sized renewable energy firms at key stages such as the project construction stage”.
Background information
About the European Investment Fund (EIF)
The European Investment Fund is part of the European Investment Bank Group. Its central mission is to support Europe's small and medium-sized enterprises (SMEs) by helping them to access finance. The EIF designs and develops both venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment.
The European Guarantee Fund (EGF) was created by the EIB Group with contributions from all 27 EU Member States to protect companies that are struggling in the crisis caused by COVID-19. With almost €25 billion in guarantees, the EGF allows the EIB and EIF to swiftly offer companies, mostly SMEs and Mid-Caps, access to loans, guarantees, asset-backed securities, capital and other financial instruments. The EGF forms part of the package of recovery measures put in place by the European Union, with the objective of providing a total of €540 billion to support the hardest hit sectors of the EU economy.
About Banco Sabadell
With a history stretching back 139 years, Banco Sabadell is Spain’s fourth largest banking group and one of the best capitalised Spanish financial institutions. Banco Sabadell has assets in excess of €230 billion a network of more than 2,000 branches and has earned the trust of 12 million customers.
Banco Sabadell has gone through a historic period of growth in the last decade, demonstrating its strength and its international footprint, as well as expanding into Mexico and the United Kingdom.
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