The European Investment Bank has signed a EUR 50 mln agreement with the Co-operative Central Bank for financing small and medium-sized enterprises in Cyprus.
The EIB increased its total lending volume in 2009 to an unprecedented EUR 79 bln, a 37% rise from EUR 58 bln in 2008, which represents a new milestone in providing financial support for the European economy. Last year, it reinforced its focus on small and medium-sized enterprises (SMEs), economically weaker regions across Europe (“convergence areas”) and the energy sector in the context of the fight against climate change.
The signature ceremony took place in Nicosia in the presence of Finance Minister Charilaos Stavrakis, and was signed on behalf of the EIB by Vice President Plutarchos Sakellaris and for the Co-operative Central Bank by its General Manager, Erotokritos Chlorakiotis.
“In 2009 we reached an unprecedented lending volume, as far as our general activity is concerned, as well as our financing in Cyprus which was double the average annual total over the last four years,” said EIB’s Sakellaris.
“Further to the importance of EIB lending to SMEs emphasised by the Cypriot government, and especially Minister Stavrakis, we inaugurated in 2009 an unprecedented cooperation with the three largest Cypriot banks for the support of smaller entrepreneurial activity in the country. I am pleased to make a further step in this direction, by signing this new agreement with the Co-operative Central Bank. This allows us to reach even more smaller enterprises, which are the backbone of the Cypriot economy, and simultaneously the local financial system. We stand at the service of Europe, and will continue to play a strong and active role in spurring economic recovery.”
In 2009, the EIB provided EUR 13 bln in credit lines to intermediary banks in the European Union for targeted lending to SMEs, an increase of 55% compared to the year before. Lending activities in the convergence areas amounted to EUR 29 bln (+36% from EUR 21 bln in 2008) accounting for 37% of the bank’s total lending volume. The lending was geographically well-balanced across the EU, with the new member states receiving EUR 13 bln. The third priority – the fight against climate change – resulted in almost EUR 17 bln of loans for projects contributing to the reduction of the volume of CO2 emissions, including renewable energy (EUR 4.2 bln), energy efficiency (EUR 1.5 bln), R&D for cleaner transport (EUR 4.7 bln) and investments in urban transport (EUR 5.5 bln).
Stronger support to real economy in Cyprus
In 2009 the EIB provided a total of EUR 202 mln in Cyprus, mainly for SMEs, as well as energy. It joined forces with the major banks – Bank of Cyprus, Marfin Popular Bank and Hellenic Bank – to support the real economy and help counteract the impact of the crisis by easing SME funding in this difficult period. Through these operations, the EIB provided EUR 138 mln to support SMEs and small and medium infrastructure investments carried out by private or public bodies, including local authorities, as well as beneficiaries of any size. This financing is available for investments in the fields of industry, tourism, services, knowledge economy, energy and environmental protection in Cyprus.
The EIB activity in Cyprus was also marked by the funding of Orites, the largest and most advanced wind farm in Cyprus. This paves the way for further developments in the sector and brings the Cypriot government closer to its target and EU’s objective for renewable energy production. The EIB provided EUR 64 mln for the design, construction and operation of an 82 MW wind farm of 41 turbines which represents 27% of the planned installed wind energy capacity of 300MW by 2020.
The EIB was therefore ready to participate in a finance structure taking direct project risk and financing of the Orites project was one of the innovative transactions that led Euromoney to award the “Lender of the Year” title to the EIB.
