InvestEU-backed Partnership to Stimulate SME Growth and Digitalization in Slovenia

InvestEU-backed Partnership to Stimulate SME Growth and Digitalization in Slovenia

(IN BRIEF) The European Investment Fund (EIF) and SID Bank have signed a guarantee agreement worth €42 million to unlock €72 million in new loans for micro, small, and medium-sized enterprises (SMEs) in Slovenia. The agreement, backed by InvestEU, will provide favorable financing options for businesses focusing on innovation, digitalization, and the green transition. SID Bank will offer loans under two programs: SID GREEN, which will provide sustainable and green transition loans with a 70% guarantee, and SID DIGITAL, which will support innovation and digitalization with a 40% guarantee. This collaborative effort aims to promote SME growth and economic development in Slovenia.

(PRESS RELEASE) LUXEMBOURG, 8-Jun-2023 — /EuropaWire/ —  The European Investment Fund (EIF), part of the European Investment Bank Group and established to support Europe’s micro, small and medium-sized enterprises (SMEs), and SID Bank have entered into a €42 million guarantee agreement, supported by InvestEU, to unlock €72 million in new loans for micro, small, and medium-sized enterprises (SMEs) in Slovenia. This collaborative effort between the country’s prominent promotional institutions aims to provide businesses investing in innovation, digitalization, and the green transition with enhanced access to financing, including lower interest rates and collateral requirements.

“At SID Bank, we successfully follow European guidelines and establish frameworks for identifying and financing environmentally sustainable activities, as well as innovation and development. Signing this guarantee agreement with the EIF will bring companies a very favourable source of financing for the necessary green economic development,” said President of the Management Board of SID Bank Borut Jamnik. “These are two new financing programmes for companies, SID GREEN and SID DIGITAL, which also fulfil the strategic goals of the Republic of Slovenia in the field of sustainable development and digitalisation, as such investments are crucial for the long-term survival and development of companies. In doing so, we are also implementing the strategy of the Republic of Slovenia in the areas of innovation, digitalisation, and green transition.”

EIF Chief Executive Marjut Falkstedt added: “ We are very happy to continue our very fruitful cooperation with SID Bank aimed at supporting Slovenian SMEs. This agreement, made possible by the InvestEU programme, will make financing more accessible for innovation and digitalisation-driven Slovenian companies as well as those investing in environmentally friendly, green and inclusive projects, supporting a green and sustainable transformation of the Slovenian economy.”

Under the guarantee agreement, the EIF will offer two types of portfolio guarantees to facilitate favorable loans from SID Bank.

The first type, utilizing the EIF’s InvestEU Sustainability Guarantee, will enable SID Bank to provide a total of €44.3 million through a newly established program called SID GREEN. These loans will be covered by a 70% guarantee and will be accessible to companies that qualify as sustainable or engage in projects contributing to the green transition or sustainability. Typically, each beneficiary can obtain up to €2 million in favorable loans, with the possibility of extending to €7.5 million or €15 million, and a maximum repayment period of 12 years.

In addition, the EIF’s InvestEU Portfolio Guarantee for innovation and digitalization will empower SID Bank to allocate €27.5 million through another program named SID DIGITAL. These loans will be covered by a 40% guarantee and will target fast-growing or innovative companies, supporting innovation in processes, products, or organization, as well as investment in intellectual property and digitalization. Similar to SID GREEN, the maximum amount of favorable loans will typically be €2 million, with the potential for expansion up to €7.5 million or €15 million, and a maximum maturity of 12 years.

This collaborative initiative between the EIF and SID Bank aims to stimulate SME growth in Slovenia by providing crucial financial support to businesses investing in key areas such as sustainability, digitalization, and innovation. The favorable loan terms offered through these programs will enable SMEs to drive economic development and contribute to Slovenia’s long-term prosperity.

Background information

The EIF is part of the European Investment Bank Group. The EIF has provided financing worth €359 million through 19 contracts in Slovenia since its inception. These investments have leveraged approximately €1.5 billion in financing and supported more than 8 000 companies and 78 000 jobs. The EIF supports Europe’s small businesses by improving their access to finance through a wide range of selected financial intermediaries, such as banks, guarantee and leasing companies, micro-credit providers and private equity funds. The EIF designs and offers equity and debt financing instruments fostering EU objectives in support of entrepreneurship, growth, innovation, research and development, the green and digital transitions and employment.

SID Bank is a promotional, development and export bank fully owned by the Slovenian state, whose key task is to promote economic and social development. In accordance with legislation, it supports economic, structural, social and other policies through the provision of financial services and works towards long-term social benefits. SID Bank’s products effectively complement the offerings of commercial banks, thus addressing market failures that occur when there is no adequate supply of financial and insurance services in the private sector (especially in the areas of developing a competitive economy, developing a knowledge-based society and innovative entrepreneurship, developing an environmentally friendly society and production, and regional and social development). SID Bank can provide financing at prices below market or reference interest rates published by the European Commission. The state aid granted to companies through SID Bank programmes is defined as benefits arising from the possibility of accessing lower interest rates than those offered by potential financial intermediaries for the same transaction.

SID Bank and the EIF have been working together successfully for many years. In cooperation with the Slovenian Ministry of Economy, Tourism, and Sports (METS), SID Bank has been providing companies with favourable direct credit financing for research, development and innovation with state aid since 2011. In 2018, SID Bank expanded its measures to promote this area with cohesion financial instruments implemented itself and through financial intermediaries. In partnership with the EIF, within the Slovenian Growth Equity Investment Programme (SEGIP), SID Bank has established a platform and provided funds for equity financing of innovative startup companies and for financing the transfer of technologies from public research institutions to the economy through venture capital funds.

The InvestEU programme seeks to strengthen economic resilience and promote innovation and job creation in Europe. The initiative aims to support more than €372 billion in investment between 2021 and 2027 using an EU budget guarantee. The projects receiving assistance are aligned with EU policy priorities, including competitiveness and the European Green Deal. The European Investment Bank Group, including the European Investment Fund, is the main implementing partner of InvestEU.

Press contacts

EIB Group

Eva De Francesco, eva.defrancesco@eib.org, tel.: +352 4379 86637, mobile: +352 691 289 150

Website: www.eib.org/press — Press Office: +352 4379 21000 — press@eib.org

SID Bank

Saša Podpeskar

Director of the Marketing and Public Relations Department

sasa.podpeskar@sid.si

+386 1 200 72 64

SOURCE: European Investment Fund