Release date: 10 July 2024
Promoter – Financial Intermediary
IKB DEUTSCHE INDUSTRIEBANK AGLocation
Description
Operation, with a 30% Climate Action and Environmental Sustainability (CAES) window, to support midcaps in Germany and potentially other EU Member States in sectors that are in line with the EIB's long-term mission.
Additionality and Impact
This Linked risk sharing operation is designed to provide support to Mid-Caps in order to foster access to finance and contribute to long-term economic growth. The operation addresses the underlying market failure in access to finance faced by Final Beneficiaries due to information asymmetries and credit considerations on the side of the Financial Intermediaries. Given the economic uncertainty exacerbated by elevated interest rates and core inflation, muted domestic consumption, energy security constraints and war in Europe's vicinity, the proposed risk sharing operation may alleviate some of the pressures faced by the real economy. Specifically, the operation will support social objectives such as employment via the provision of eligible transactions such as loans for working capital and investment purposes to mid-caps. The operation also supports, to a lesser degree, projects that will contribute to the reduction in carbon and air pollution, improving the energy markets and general market efficiency and integration through participation in the wholesale markets.
The Financial Intermediary is an established player in the target market and has sufficient track record of implementing EIB products and allocations, including the CAES component. The guarantee may alleviate capital- and credit related concerns of the Financial Intermediary and thereby free up additional lending capacity. The operation is expected to carry a signalling effect, thereby crowding in other parties. The product is not readily available on markets and an alternative means to promoting lending to the real economy compared to other promotional schemes available.
The financing of this project contributes towards the Bank's lending priority objectives on Energy (Renewable Energy and Energy Efficiency) with a 30% contribution on Climate Action and Environmental Sustainability (Climate Action) as transversal objectives. The Climate Action components concern the financing of energy efficiency and renewable energy investments located in Germany.
The projects are expected to lead to a broader social benefit. The EIB is providing capital relief, thereby contributing to financing in terms of volume and longer maturities. In addition, the FI expressed interest in receiving technical assistance support as part of the EIB Green Gateway Advisory programme.
Objectives
By freeing up capital and decreasing the credit risk, the operation aims to enable additional lending by the Intermediary and trigger growth and employment. 30% of the lending will be dedicated to financing green projects.
Sector(s)
- Credit lines - Credit lines
Proposed EIB finance (Approximate amount)
EUR 200 million
Total cost (Approximate amount)
EUR 560 million
Environmental aspects
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Procurement
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Status
Signed - 31/07/2024
Disclaimer
Before financing approval by the Board of Directors, and before loan signature, projects are under appraisal and negotiation. The information and data provided on this page are therefore indicative.
They are provided for transparency purposes only and cannot be considered to represent official EIB policy (see also the Explanatory notes).