PATRIA BANK LOAN FOR SMES & MIDCAPS

Promoter – Financial Intermediary

PATRIA BANK SA

Location

• Romania

Description

The operation consists of a Multi-Beneficiary Intermediated Loan (MBIL) to finance eligible investments promoted by small and medium sized enterprises (SMEs) and mid-caps in Romania.

Additionality and Impact

Operation aims to help mitigate market failure of SMEs' and Mid-caps' insufficient access to long term funding and thereby contributing to long-term economic growth. By addressing this market gap, which is more acute in Romania compared to the EU average, operation in particular supports strengthening of EU's economic, social and territorial cohesion (66.5% of it is expected to be implemented in cohesion regions). The Small size of SMEs makes them more vulnerable to economic cycles and more constrained in opportunities for growth. Most important contributions of EIB loan will be: long term funding, diversification of external funding, and signalling effect for other financiers to provide similar long-term loans to Borrower.

The green window of the operation concerns the financing of small-scale renewable energy (mostly small-scale solar PV) projects in Romania. It contributes to supporting the Bank's priority objectives in the energy sector and the EIB's climate action and environmental sustainability objectives. The operation will contribute to energy production from low-carbon sources and reduction of energy demand in Romania, which is key to meeting the mid/long term national objectives, as outlined in the Romanian National Energy and Climate Plan (NECP). The operation is also aligned with the REPowerEU strategy. By using an intermediated approach, the Bank will be able to support smaller projects that would otherwise not be reached directly.

 

Moreover, the operation supports the FI's sustainability strategy, by facilitating its lending in the targeted sectors and diversifying its financing sources. The operation addresses a number of market failures, from contributing to the reduction in carbon and air pollution to improving the efficiency and integration of energy markets.

 

The FI is financially sound and has sufficient track record in financing these kinds of projects. The operation enhances access to finance for final beneficiaries at advantages financing conditions, and thereby aims to preserve and create jobs.

Objectives

The aim is to enhance access to finance to the target beneficiaries, with a partial dedication to climate action projects.

Sector(s)

• Credit lines - Credit lines

Proposed EIB finance (Approximate amount)

EUR 50 million

Total cost (Approximate amount)

not applicable

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 - 23/07/2024