First EGF agreements in Portugal: EIF and CGD boost the economic recovery of Portuguese companies affected by the COVID-19 crisis

• EIF & CGD sign the first two agreements in Portugal under the Pan-European Guarantee Fund (EGF)
  • Uncapped guarantee of up to €400 million
  • Capped guarantee of up to €650 million

The European Investment Fund (EIF), part of the European Investment Bank Group, and Caixa Geral de Depósitos, SA (CGD) signed the first two agreements in Portugal under the Pan-European Guarantee Fund (EGF) for a total of €1.050 billion.

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.

Thanks to EGF, the EIF and CGD will provide debt financing to SMEs to mitigate the economic impacts of the COVID-19 crisis and to promote their growth and development in the medium to long-term. 

The two institutions signed an uncapped guarantee of up to €400 million and a capped guarantee of up to €650 million.  The capped guarantee will focus on the support of SMEs with  liquidity needs and investments in sustainable urban regeneration, while the uncapped guarantee will provide the liquidity needed by companies aiming to adapt their business models, facing refinancing needs, or investing in green and sustainable projects. The EIF will assume 70% of the risk of debt financing granted by CGD to Portuguese SMEs.

Alain Godard, EIF Chief Executive, said: “Thanks to the EGF guarantee, the EIF and CGD will be able to provide Portuguese companies with longer grace periods, reduced collateral requirements and extended maturity, supporting SMEs that have been particularly exposed to the COVID-19 pandemic.”

Ricardo Mourinho Felix, EIB Vice-President, responsible for the EIB Group operations in Portugal, added that: “Small and medium-size businesses are the hardest hit by the economic crisis caused by the pandemic. Portugal is benefitting from the EGF to support these companies in such a critical moment. The EIF and CGD are working together to extend financing to Portuguese firms, providing the needed liquidity to support their recovery. Supporting Portuguese SMEs is one of the EIB Group main priorities for 2021 and this operation shows our strong commitment in achieving this objective.

Paulo Moita de Macedo, CEO of Caixa Geral de Depósitos, “This crisis has a highly asymmetric impact on the various sectors. But there is a need to renew and increase investment in transversal areas, like digitization and environmentally responsible investment.”

Background information:

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments that specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research, and development, entrepreneurship, growth, and employment.

The European Guarantee Fund (EGF) was set up by the EIB Group with contributions from Portugal and other EU Member States to shield companies suffering from the COVID-19 crisis. Using nearly €25 billion in guarantees, the EGF allows the EIB and the EIF to quickly make loans, guarantees, asset-backed securities, equity, and other financial instruments available to mostly small and medium-sized enterprises. The EGF is part of the European Union’s recovery package aiming to provide a total of €540 billion to boost those parts of the EU economy that have been hit the worst.

Caixa Geral de Depósitos, is the Portuguese leading financial group with more than 143 years and sound international presence. It is committed to its leading role in the recovery and internationalization of the Portuguese economy.

Press contacts:

EIF

Lorenzo Squintani, tel.: +352 691 285 772, l.squintani@eib.org

Website: www.eif.org – Press office: +352 4379 21000 – press@eib.org

Follow us on Twitter @eif_eu  

Caixa Geral de Depósitos

Luís Goldschmidt, Tel: +351 963 001 680 - Luis.Goldschmidt@cgd.pt