InvestEU: The first operation under the new facility set up by the Government of Malta and EIF, aimed at stimulating €86 million of investment to improve the competitiveness of SMEs

• As a first implementation step of the facility, the European Investment Fund is deploying today €10.5 million from Malta’s ERDF resources and €19.5 million from its own resources for a guarantee of €30 million to unlock investments for €60 million to be implemented through BoV.
• More than 140 companies are expected to benefit from new loans terms from this first operation, including lower interest rates, reduced collateral requirements, and decreased down-payment requirements.
• The initiative is supported by the InvestEU Member State Compartment in Malta, made possible by an EU budgetary guarantee funded by an overall contribution of EUR 16.55m of ERDF and national budget resources from the Government of Malta.

The European Investment Fund (EIF) has signed a €30 million agreement with Bank of Valletta following a selection process to support small and medium-sized businesses (SMEs) as the first phase of a joint facility to stimulate the competitiveness of SMEs in Malta. The new funds are expected to contribute to activate investments for €60 million in the real economy, providing over 140 businesses with access to favorable financing conditions tailored to their needs. The partnership was announced today in Malta by EIB Vice-president Kyriacos Kakouris, and Bank of Valletta CEO Kenneth Farrugia during a launch event presided by Permanent Secretary Jonathan Vassallo from the Office of the Prime Minister (EU Funds, Equality, Reforms and Social Dialogue).

This initiative falls under the umbrella of the InvestEU Member State Compartment in Malta, which is allocating part of its EU budgetary guarantee, amounting to €10.5 million funded by a contribution from Malta’s European Regional and Development Fund resources (“ERDF”), as well as the national budget, and an €19.5 million contribution by the EIF to enable Bank of Valletta to strengthen the competitiveness of Maltese businesses while fostering economic growth and resilience through this instrument.

The EIF SME Competitiveness Guarantee will enable Bank of Valletta to facilitate the financing of investment needs for SMEs. This guarantee allows for loan terms that would not be available otherwise, including lower interest rates, reduced collateral requirements, and decreased down-payment requirements for investment loans.

Permanent Secretary Jonathan Vassallo remarked that “today, under the InvestEU programme, we are launching a new phase in our collaboration with EU institutions. The Malta Member State Compartment will continue addressing SME financing challenges, immediately unlocking €60 million in loans to support growth and competitiveness. As we look forward, this partnership will remain vital for ensuring that Maltese SMEs have the financial backing necessary to thrive, innovate, and contribute to both the local and European economies. With continued collaboration, we can ensure that our SMEs remain resilient, competitive, and prepared for the future”.

EIB Vice President Kyriacos Kakouris commented: "Supporting small and medium-sized companies is essential for driving innovation and competitiveness. This partnership with the Maltese government and Bank of Valletta showcases how the EIB Group, through the EIF, can provide tailored financial products that empower entrepreneurs to scale up their operations and create jobs, ensuring Malta's long-term economic growth."

Bank of Valletta CEO, Kenneth Farrugia reiterated the Bank’s commitment to keep supporting local SMEs and the wider business community in Malta. “Our role as the leading Bank in Malta also requires us to be partners in business with local SMEs. Thanks to our ongoing collaboration with the European Investment Bank we are able to offer additional advantageous lending schemes that enhance our vast product suite. With the portfolio that we are securing today, we continue to reaffirm our commitment to the local business community and to being the Bank of Choice in Malta for all small and medium enterprises.”

Background information

The European Investment Fund (EIF) is part of the EIB Group. It supports Europe's small and medium-sized enterprises (SMEs) by improving their access to finance through a wide range of selected financial intermediaries. The EIF designs, promotes and implements equity and debt financing instruments targeting SMEs. In this role, EIF fosters EU objectives in support of entrepreneurship, growth, innovation, research and development, the green and digital transitions and employment. In 2023, the EIF mobilized over €134 billion for the European economy, enhancing competitiveness, supporting innovative entrepreneurs, promoting social impact, fostering sustainability, and advancing the green transition. Going forward, EIF aims to strengthen financing access for European entrepreneurs, focusing on key sectors to drive sovereignty, competitiveness, and a greener, more inclusive future.

About the InvestEU Member State Compartment

The InvestEU Member State Compartment enables the Member States to contribute part of their shared management funds, resources from the Recovery and Resilience Facility, and national resources to the InvestEU Fund by setting up a dedicated Member State Compartment. With this voluntary contribution, Member States can leverage on the InvestEU guarantee to support specific national priorities. Under the Member State Compartment, loans, guarantees or equity investments can be offered as a complement to other public and private investments.

The InvestEU Fund's Malta Member State Compartment (Malta MS-C), backed by an overall contribution of €16.55 million from the Maltese government, is expected to leverage public resources, creating a total investment of up to €86 million to support Maltese enterprises, with up to €60 million to be generated by Bank of Valletta. The SME Competitiveness Guarantee product is designed to improve access to finance for Maltese businesses. This initiative, detailed in the Contribution Agreement between the European Union and Malta, signed in January 2023, aims to restore blocked lending channels. The product will be implemented through Uncapped Guarantees, forming the Malta MS-C Uncapped Portfolio and, overall, this initiative plays a key role in supporting Maltese SMEs by improving access to finance, contributing to economic recovery and growth.

Press contacts

EIF: Lorenzo Squintani | l.squintani@eib.org, tel.: +39 366 57 90 312

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