Portugal: EIB and BPI join forces to provide EUR 500 million to finance small and medium-sized companies

The European Investment Bank (EIB) and Banco BPI SA (BPI) have taken new steps to increase their collaboration in order to provide financing for SMEs and Midcaps in Portugal. The EIB has concluded the subscription of a EUR 250 million covered bond, issued by BPI under BPI’s EUR 7 billion covered bond programme. EIB Vice-President Emma Navarro and BPI CFO and Executive Director Ignácio Álvarez-Rendueles have ratified the agreement in Lisbon.

This operation allows the EU Bank to facilitate financing to small and medium-sized investment projects implemented by Portuguese companies. Part of this loan is also aimed at funding projects of public entities and other promoters in different sectors of industry and services. The operation also marks the return of the EIB to the Portuguese covered bond market where the EIB sees high potential and which constitutes an additional alternative for channelling EIB funding to investment projects.

As part of the agreement, this EIB EUR 250 million line will be complemented by financing for the same amount provided by BPI. Therefore, the final funding available for SMEs and midcaps through this agreement will reach EUR 500 million. Thanks to the EU bank’s support, Portuguese companies will benefit from access to long-term financing on favourable terms for their investments, as BPI will pass on to final beneficiaries the EIB’s advantageous financing in terms of both maturity and interest rates. The EIB loan will enable financing of up to 100% of the total project cost for SMEs and midcaps (with a maximum of EUR 12.5 million per project) and up to 50% for other types of projects.

At the signature event held in Lisbon, EIB Vice-President overseeing the Bank’s activity in Portugal, Emma Navarro, stated: “We are glad to support the growth and competitiveness of Portuguese companies, which are essential vehicles for employment creation in Portugal. Thanks to this agreement, they will benefit from the long-term and advantageous financing provided by the EIB. As the EU bank, we are committed to support small business. This is, indeed, one of our key priorities: assuring that SMEs have access to credit is fundamental to foster innovation and economic growth in the EU”’.

Ignácio Álvarez-Rendueles, BPI CFO and Executive Director, stated: “We are very pleased with this transaction which represents the continuation of a long-term relationship between BPI and EIB. We would like to highlight the excellent working relationship that allowed the transaction to be arranged in a most innovative format and within a short period of time. EIB’s cooperation is key to BPI’s commitment with SME’s and midcaps funding in Portugal, which is a core line of business for the Bank”.

The EU bank's relationship with BPI started in 1985 soon after BPI was founded in 1983. Both institutions have signed numerous agreements to provide financial support to a wide array of sectors, including in the areas of agriculture and energy efficiency investments, the latter under an EU-backed investment initiative (PF4EE). In 2016, the EIB provided a EUR 400 million loan to BPI that has benefited over 1.360 Portuguese companies.