* First ‘Juncker plan’ transaction for Cypriot businesses *
The European Investment Fund (EIF) and RCB Bank have signed the first EFSI agreement in Cyprus which will provide EUR 10 mln to innovative small and medium-sized enterprises (SMEs).
The agreement benefits from the support of the European Fund for Strategic Investments (EFSI), an initiative dubbed the ‘Juncker Investment Plan’ launched jointly by the EIB Group and the European Commission to help overcome the current investment gap in the EU by mobilising private financing for strategic investments.
Under the new agreement, RCB will provide attractive loans to innovative small and medium–sized enterprises (SMEs) and mid-caps over the next two years.
The EIB also signed a second financing contract for a further EUR 40 mln with RCB Bank, further enhancing competition in the banking sector and benefiting local companies, along with a state guarantee signature between the EIB and the Republic of Cyprus. The second loan with RCB Bank to support local companies follows an initial EUR 20 mln loan signed in February 2016, which has already been fully allocated supporting more than ten new investments.
The agreements were signed in a public ceremony on Friday at the Finance Ministry in Nicosia attended by Minister Harris Georgiades, EIB President Werner Hoyer and European Commission representative Georgios Markopouliotis and Kirill Zimarin, CEO of RCB Bank.
The first financing agreement in Cyprus under the framework of “InnovFin” and the EFSI will allow RCB to develop new financial products, with its main characteristic being the significantly reduced collateral requirements on behalf of SMEs, so that it can support many SMEs, which, under different circumstances, may not have been in a position to find sufficient financing, Georgiades said during the signature ceremony.
“This financing agreement being signed by the European Investment Fund and RCB, with the support of the European Fund for Strategic Investments, signals new loans with favourable terms for many Cypriot small and medium sized businesses. This important agreement –the first being signed in Cyprus- became reality with the support of the Investment Plan for Europe and is further proof that the Juncker Plan is bearing fruit,” he noted.
EIB President Werner Hoyer said that “the EIB’s continued engagement in Cyprus, especially during the recent challenging years, is a sign of our absolute confidence in the country’s economy and at the same time pays tribute to the excellent investment projects that are coming out of Cyprus.”
“The EIB agreements signed today will provide continued support to private sector investments crucial for boosting economic growth and creating quality new jobs” said Hoyer, reaffirming the EU Bank’s strong support for Cyprus.
RCB Bank CEO Kirill Zimarin underlined the bank’s commitment in working closely with the EIB, the EIF and the government in providing the necessary liquidity to the market and thus fulfilling its role in enhancing the real economy.
“Through such agreements, we are fulfilling an important part of our role. The role of the banking system in Cyprus is to provide the much needed liquidity to the healthy businesses that want to materialise their investment and growth plans. This is how we help the efforts of the government to achieve viable growth”.
George Markopouliotis, head of European Commission Representation in Cyprus noted that the EFSI is now helping to boost investment, support jobs and spur growth in all 28 Member States.
“The Investment Plan is working to attract private investment across the EU as well as providing a guarantee to public investments in a time of constrained national budgets. It helps to create confidence and therefore helps European companies get the investment they need so urgently to get back on their feet after the economic crisis” he said.
