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EIB and EIF partner with NBG to unlock more than EUR 1 billion for Greek businesses impacted by COVID-19

 
24/06/2021

· First transactions in Greece under the European Guarantee Fund to help businesses recover from the pandemic and grow

· Joint EIB Group engagement to support SMEs, MidCaps and, for the first time, large corporates

· First EIB direct guarantee operation in Greece and first EIF guarantee operation in Greece to cover factoring

· Follows recent EIB and EIF support for EUR 4.5 billion Greek business financing by NBG

Small, medium and large businesses across Greece impacted by COVID-19 will benefit from EUR 1.125 billion of new financing from the National Bank of Greece supported by the first signatures of the European Guarantee Fund (EGF) products in the country.

The European Investment Bank and European Investment Fund will guarantee business financing provided by NBG to enable companies of all sizes access advantageous financing, better withstand business challenges posed by the pandemic and invest for the future.

The first operations supported by the European Guarantee Fund in Greece were formally agreed at the National Bank of Greece headquarters in Athens earlier today. Pavlos Mylonas, Chief Executive Officer of National Bank of Greece, Werner Hoyer, President of the European Investment Bank, Christian Kettel Thomsen, European Investment Bank Vice President responsible for Greece and Alain Godard, Chief Executive Officer of the European Investment Fund attended the signature ceremony.

“COVID-19 has created unprecedented challenges for business across Greece and demanded rapid response to help businesses adapt and protect jobs. NBG has responded to the needs of our clients during these challenging times and welcomes the significant new support from the EIB and EIF available by the first use of the European Guarantee Fund in our country. Today’s agreements will enable NBG to channel EUR 1.125 billion of financing to hundreds of companies across Greece.” said Pavlos Mylonas, Chief Executive Officer of National Bank of Greece.

“The European Investment Bank Group is committed to helping entrepreneurs and businesses across Europe and around the world to withstand the impact of COVID-19. Today’s first use of the European Guarantee Fund by our long-standing local partner NBG will unlock new financing that will help companies to overcome tough times and build a better future.” said Werner Hoyer, President of the European Investment Bank.

“The EIB’s latest cooperation with NBG comes at a crucial time for the Greek economy and together we will help Greek companies to contribute to national recovery. Deployment of the European Guarantee Fund marks the first time that the EIB has provided guarantees for business financing in the country and the first ever EIB support for financing for larger companies in Greece through a local banking partner.” said Christian Kettel Thomsen, European Investment Bank Vice President responsible for Greece.

“The European Investment Fund is scaling up engagement to support companies across Europe most impacted by the pandemic strengthening and providing equity, debt funds and guarantee products to reflect the precise business financing needs. The new EIF guarantee facility with NBG will complement the EIB guarantee and ensure that Greek companies of all sized can access targeted finance at this crucial time.” said Alain Godard, Chief Executive of the European Investment Fund.

Greek businesses benefiting from EUR 25 billion pan-European COVID response

The EUR 25 billion European Guarantee Fund was created by the European Investment Bank Group and EU Member States in the weeks after the onset of the pandemic to protect European companies that have been hit hard by the COVID-19 crisis, but are deemed viable in the long run.

By helping cover losses and free up capital for financial intermediaries, the EGF guarantees enable financial intermediaries to lend more money to companies under better conditions, helping businesses access rapid and advantageous financing and overcome the economic fallout of the COVID-19 pandemic.

Transaction combining NBG, EIB and EIF support for Greek business resilience

The European Guarantee Fund will enable both the EIB and EIF to guarantee business loans provided to companies across Greece by NBG.

The EIB transaction involves a guarantee in favour of NBG covering losses potentially incurred on a EUR 200m portfolio of new loans to companies (MidCaps and large corporates) that have been affected by the COVID-19 pandemic, but are deemed viable in the long term. Taking into account the leverage commitment undertaken by NBG towards SMEs and the contributions of final beneficiaries from other sources, the transaction is expected to mobilise almost EUR 500 million worth of financing for the benefit of enterprises in Greece.

The EIF transaction consists of direct guarantee support for lending to both SMEs and Midcaps through a EUR 775 million loan portfolio, covering a wide range of business financing products including liquidity, factoring and investment loans.

Building on EUR 4.5 billion NBG and EIB Group recent support for private sector in Greece

Over the past 5 years, the EIB has committed more than EUR 1.65 billion to NBG for both on-lending to businesses across Greece and trade finance that has unlocked more than EUR 3bn of new business financing.

This represents the largest engagement with any Greek bank during this period and includes dedicated support for youth employment, female empowerment, climate action, as well as trade finance. In recent months, the EIB has signed EUR 200 million worth of loans in response to COVID-19 with NBG.

In recent years the EIF has unlocked a total of EUR 1.44 billion of new business financing through NBG under 8 targeted guarantee programmes,

The new NBG financing was launched during a three-day visit to Athens by the EIB President, Vice President and EIF Chief Executive.

Background information

About the National Bank of Greece

“National Bank of Greece S.A. is one of the four systemic banks in Greece and one of the largest financial institutions in Greece, providing a wide range of financial products and services.  It has a strong presence throughout the country with leading market shares in most of its main business areas, including retail and corporate lending.”

About the European Investment Bank

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.

About the European Investment Fund

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. The EIF designs and develops 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.