The European Commission has approved a €125 million Estonian scheme to support the liquidity needs of companies across sectors in the context of Russia's invasion of Ukraine.
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Estonia notified to the Commission, under the Temporary Crisis Framework, a €125 million scheme to provide support to companies active across sectors in the context of Russia's invasion of Ukraine.
Under the scheme, which will be co-financed by the European Regional Development Fund (ERDF), the aid will take the form of guarantees on loans with different levels of subsidised premiums.
In light of the high degree of economic uncertainty caused by the current geopolitical situation, the scheme is aimed at ensuring that sufficient liquidity is available for the companies in need.
Under the scheme, the eligible beneficiaries will be entitled to receive new loans that will be covered by a State guarantee not exceeding 80% of the loan amount to address their investment and/or working capital needs.
The maximum loan amount per eligible beneficiary is equal to either 15% of the beneficiary's average total annual turnover over a predefined time period; or 50% of the company's energy costs incurred over a predefined twelve-month period.
In addition, eligible beneficiaries will benefit from lower guarantee premiums if: a relevant share of their turnover is linked to the Russian, Belarussian and Ukrainian markets; or they have experienced a significant increase in the prices of their main raw materials, or they have a relatively high share of energy costs compared to their turnover over the last three years.
For companies affected by the crisis but not falling within any of the above categories, the guarantee premiums will be higher and determined on a case-by-case basis.
The scheme will be open to companies active across all sectors, with a number of exceptions, among them the financial sector, the primary production of agricultural products, fisheries and aquaculture sectors.
The Commission found that the Estonian guarantee scheme is in line with the conditions set out in the Temporary Crisis Framework.
In particular: the maturity of the guarantees and the loans will not exceed six years; the guarantee premiums respect the minimum levels set out in the Temporary Crisis Framework; and the aid will be granted no later than 31 December 2022.
Furthermore, the public support will come subject to conditions to limit undue distortions of competition, including safeguards to ensure a link between the amount of aid granted to companies and the scale of their economic activity; and that the advantages of the measure are passed on to the largest extent possible to the final beneficiaries via the financial intermediaries. ■