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EIF and BPI to leverage €250 million for Portuguese companies

Christian Fernsby |
The European Investment Fund (EIF) and Banco BPI have signed today an agreement for an uncapped guarantee aimed at backing the liquidity and investment needs of small and medium-sized companies (SMEs).

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The agreement, backed by the Pan-European Guarantee Fund (EGF), aims at leveraging up to €250 million financing for eligible companies in Portugal, including those in sectors particularly exposed to the COVID-19 pandemic.

The EIF support under the EGF will enable BPI to provide additional debt financing to SMEs on favourable terms, providing eligible companies with the liquidity needed to finance their recovery and growth plans and thus ensuring their development in the medium to long term. Thanks to the EGF, the EIF will assume up to 70% of the risk of the loans that BPI grants to SMEs.

The EGF, operational since October and approved by the European Council as part of the package of response measures of the European Union (EU) to the economic impact caused by COVID-19, aims to support companies affected by COVID-19, with great emphasis on SMEs.

Alain Godard, EIF Chief Executive, said: “On top of the dramatic damage to people's health, the COVID-19 crisis is also affecting the financial health of companies worldwide. Among them, SMEs tend to be the most vulnerable.

"The EIF mission to support SMEs across Europe to stimulating growth, employment and innovation in Europe is now more crucial than ever.

"We are glad to build on our longstanding partnership with Banco BPI, this time under the pan-European Guarantee Fund. This is one of the largest EIF operations signed with Banco BPI and it aims at enabling Portuguese companies to continue investing in their future and growth.”

Ricardo Mourinho Félix, EIB Vice-President, responsible for the Bank’s operations in Portugal, added that: “The European Guarantee Fund was created in the context of the EU response to the immediate economic impacts of the economic crisis caused by COVID-19, in particular on investments and liquidity needs of small and medium-sized companies. Thanks to this agreement signed by the EIF and Banco BPI, Portuguese companies will benefit from EGF support in a critical moment for the economy.”

João Pedro Oliveira e Costa, BPI CEO, stated: “This agreement sets a new milestone in our longstanding relationship with EIF, which has been instrumental in BPI’s commitment to financing SMEs in Portugal. BPI has been at the forefront of relief measures to support companies in Portugal and this agreement will further strengthen our position in this segment. In 2020, BPI granted more than 4.2 billion in loans to companies, reinforcing its main role in the support of the Portuguese economy in the COVID-19 period”.

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