EIB set to reveal a record €1.08bn support package for Irish organisations from EU investment bank in 2019

The European Union’s investment bank is expected next week to announce a package of measures to help small and medium-sized businesses deal with coronavirus.

The European Investment Bank (EIB) Group’s vice-president, Andrew McDowell, told The Irish Times that the big challenge for SMEs will be that banks will become increasingly risk averse to businesses in sectors that are most exposed to an economic downturn.

“For a lot of otherwise solvent SMEs, working capital shortage could be an issue,” he said after the bank announced a record year for financing Irish organisations.

“In terms of providing supports for SME credit availability we expect to make announcements as early as next week on a package of measures the EIB can put in place pan-Europe,” he said.

Both the EIB and European Investment Fund financed a record €1.08 billion worth of projects in the Republic last year, with the finance covering social, infrastructure and business projects.

Asked whether that result would be repeated, Mr McDowell said the EIB’s pipeline remained very strong, although he noted that this assessment was made at the beginning of this year.

“Like every institution we are reassessing our business plans,” he said, adding: “It’s quite clear that the provision of financing for SMEs is going to become a particular priority.”

Among the projects on track to receive backing this year are the National Broadband Plan and a community nursing public-private partnership.

The EIB typically finances projects over long periods, and Mr McDowell said that it is too early to take a view on how the coronavirus crisis would impact its portfolio. He noted that the EIB is a counter-cyclical investor and would step up activity where necessary if European economic conditions worsened.

New investments

Last year the bank made 13 new investments in housing, transport, education, agribusiness, climate action and regional development. Commitments made in 2019 bring total EIB financing in the Republic since it joined in 1973 to €19 billion.

The project which received the largest financing package last year was Dublin Airport’s resilience upgrade which got €350 million. A social and affordable housing project received €200 million and one private-sector company that received funding was the Carbery Group, which won a package of €35 million for its investment programme.

“For the EIB what is even more important than the business volumes has been the impact: a cleaner environment; more and better social housing; small businesses better prepared for Brexit; and Irish-owned and managed exporters driving economic growth and job creation,” Mr McDowell said.

The EIB last year also signed a €40 million loan to An Post to roll out electric delivery vehicles and agreed a €35 million package with Cork County Council to accelerate investment to expand sustainable transport, improve flood protection and upgrade community facilities.

“Last year’s record EIB financing for Irish projects reflects the close relationship across government, business and private-sector partners that has enabled high-impact projects to be supported,” said Minister for Finance Paschal Donohoe.