Czech Republic: Investment Plan for Europe: landmark EUR 100 million risk-sharing deal to support small and medium-sized businesses

The European Investment Bank (EIB) and Česká spořitelna, a.s. (CSAS) have joined forces in the first risk-sharing operation in the Czech Republic and the whole Central Europe region guaranteed by the European Fund for Strategic Investments (EFSI) in order to provide EUR 100 million in funding to small and medium-sized businesses for climate action and research-related projects.

The loan-by-loan guarantee of EUR 50 million from the EIB will provide 50% credit risk protection on a portfolio of new loans extended by CSAS. The aim of the transaction is to catalyse and/or accelerate new investment primarily in the areas of energy efficiency, small renewable energy sources and innovation. The transaction will benefit from an EU budgetary guarantee under EFSI.

“This is a landmark deal for the region concluded with our trusted partner Česká spořitelna. Facilitating access to long-term finance for riskier projects contributing to climate action or RDI is the key aim of EFSI, and I am glad we have managed to sign this transaction in a region where such a transaction will provide maximum value added”, said Vazil Hudák, the EIB-Vice President responsible for operations in the Czech Republic.

European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: "The Investment Plan is working to empower small and medium-sized businesses across Europe to take their next steps. I am delighted that this transaction will facilitate climate action, innovation, expansion and job creation by medium and small-sized businesses in the Czech Republic. I wish those businesses that will benefit from this transaction every success in the future.”

“Credit risk protection often represents a major hurdle in financing new projects, innovations and other projects. Our risk-sharing operation with the EIB could make the difference for a great deal of loan requests”, said Ladislav Dvořák, manager of strategic projects at Česká spořitelna.

The two banks have a solid track record of mutual cooperation dating back to 2002. The EIB has so far provided 11 loans and guarantees in excess of EUR 1.1 billion to CSAS to spur long-term SME and midcap financing in the Czech Republic under favourable terms. The EFSI is already expected to trigger financing of around EUR 1.9 billion in the Czech Republic as of January 2017.

EFSI is the central pillar of the European Commission’s Investment Plan for Europe aimed at boosting investment levels across the EU, better known as the "Juncker Plan".