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Thursday, 18th April 2024 |
| EIB lending in Ireland to pick from modest 1999 level |
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In 1999, the European Investment Bank (EIB) signed finance contracts worth E87 million for Ireland, down from E263 million in 1998, and just 0.3 per cent of the total loan book for EU countries. Of this, E61.7 million was lent to AIB and E25.4 million was lent to ICC bank.
‘Ireland from an economic point of view is progressing at different rates than some of the other countries and as a result they may or may not need our funding as much. Maybe they are looking for different type of structures at this point in their economic curve,’ according to Catherine Bealin, EIB lending officer for the UK and Ireland. Bealin is based in Luxembourg and is a recent appointment to the position.
She added: ‘I’m actively marketing the EIB in Ireland and hope we will pick-up additional pieces of business in infrastructural initiatives and also inward investment by international companies in Ireland.’
ICC secured their finance under the EIB’s ‘SME venture capital window,’ which is part of the Amsterdam Special Action Programme (ASAP). This was set up in 1997 to support the Amsterdam European Council’s resolution on growth and employment.
‘The EIB actually invested those funds in our private equity fund as an equity investor. The fund invests in a broad range of companies like IT and software development and not just not just SMEs,’ said John Staunton, treasurer at ICC Bank.
Staunton noted: ‘If you go back to the 1970s, ICC’s proportion of lending funded by the EIB was extraordinary high. As the 1980s progressed we were able to access a broader range of funding, so the proportion went down.’
‘It not necessarily the cheapest source of funding but the EIB can provide long-term cash which is very illiquid for banks to borrow. EIB does provide fixed-rate cash. Because they are an EU institution they have a AAA rating and that gives them an added advantage in long-term funding,’ he added.
AIB got their E61.7 million funding under the ‘Global Loans’ scheme for financing SME ventures. An AIB spokesman told Finance: ‘The EIB would approach us from time to time advising us there were global loans available. At that stage our treasury team would look at the package and evaluate each one as it arises.’
‘Subject to SMEs meeting the criteria set by the EIB, the standard lending standards applied by the bank would apply. We would use this EIB funding to finance our general loan book,’ he said. |
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| Article appeared in the June 2000 issue.
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