- European Investment Fund (EIF) and UniCredit sign umbrella guarantee agreement under the Pan-European Guarantee Fund to support SMEs affected by COVID-19 in Bulgaria, Croatia and Slovakia
- Guarantees fall under Pan-European Guarantee Fund (EGF), a EUR 25 billion guarantee fund established by the EIB Group to accelerate post-COVID recovery of European companies.
- The uncapped guarantee provided by the European Investment Fund covers 70% of the loan exposure up to a total of EUR 300 million, has been signed with local banks in Bulgaria, Croatia and Slovakia to support working capital and investment finance under the EGF.
European Investment Fund and UniCredit entered into an umbrella guarantee agreement in response to the COVID-19 pandemic, offering support to companies in Bulgaria, Croatia and Slovakia under the Pan-European Guarantee Fund (EGF).
The guarantee will allow UniCredit to offer working capital and investment loans to SMEs guaranteed by the EIF at a rate of 70%. The portfolio of such lending is expected to reach up to EUR 300 million.
Gianfranco Bisagni, Head of Central Europe at UniCredit said: "We are offering continuous support to businesses through this initiative in order to manage the liquidity issues caused by COVID-19. This new agreement seeks to guarantee cash flow availability to companies, especially SMEs, which are the backbone of the European economy and generally lack access to capital markets. We thus allow them to finance working capital and investment programs, ensuring proper functioning of production and supply chains. At UniCredit, we work with our countries and engage in decisive and concrete measures to be part of the solution, helping companies and the local economies especially in light of the emergency we are living."
Roger Havenith, Deputy Chief Executive of the EIF said: "The EIF operation with UniCredit is good news for SMEs in Croatia, Slovakia and Bulgaria as it unlocks urgently needed financing for COVID-19 recovery, the protection of jobs and livelihoods of European citizens. In response to the COVID-19 pandemic, the EIB Group created the European Guarantee Fund to mobilize up to EUR 200 billion in investments and accelerate the recovery of the European economy. Today, five months after its launch, the EGF is half way to meeting this ambitious goal and I would like to thank UniCredit for contributing and partnering with us in this effort to support European businesses."
As of March 31st 2021 UniCredit in the CEE countries had 37 established guarantee schemes from IFIs and local development banks in total capacity of about EUR 5,1 billion, out of which EUR 2,7 billion was already utilized, and EUR 2,4 billion available for lending support in the region within the next 2-3 years.
Since the start of the COVID-19 pandemic UniCredit has been providing quick response to the market and doubled its risk sharing capacity, continuing to finance its clients in this unprecedented time. The main increase in the support solutions, about EUR 2 billion, was achieved thanks to the new local COVID-19 related governmental programs, that UniCredit successfully channeled through its network in CEE.
As for the cooperation with IFIs, UniCredit extended the support solutions with EIB Group, implementing upgrades to the existing facilities (InnovFin, COSME) and designing new ones, such as this new EGF uncapped guarantee umbrella facility.
The UniCredit banks in Bulgaria, Croatia, and Slovakia will benefit from this new guarantee scheme, the protection shield for EU businesses and one of the financial pillars of the EU economy recovery.