Hoyer: EIB aiming for a record performance with lending of up to 2 bln euros

epa02773679 An exterior view of the European Investment Bank (EIB) Headquarters in Luxembourg, where Tajikistan's President Emomali Rahmon and Philippe Maystadt, the President of the European Investment Bank, withe their delegations met for talks, on 10 June 2011. EPA/NICOLAS BOUVY

The European Investment Bank is aiming to increase its lending to record levels in Greece this year, EIB president Dr Werner Hoyer said on Thursday, in an exclusive interview with the Athens-Macedonian News Agency.

“We have transformed our investment activity in Greece, both in terms of how much we lend, and what we lend for. With three months to go, I can’t yet be precise about how much we will lend this year, but we are aiming for a record performance with lending of up to 2 billion euros,” he said.

It is in the area of private sector lending, however, and in particular lending supported by EFSI, that we have had the biggest turnaround, he said. Today, the Bank signed an important financing agreement with Piraeus Bank that took us through the 1 billion euros mark for EFSI backed operations in Greece, he added.

Only six large countries (France, Germany, Italy, The United Kingdom, Spain and Poland) have achieved as much, the president said: “Looking at how much investment has been catalysed through EFSI relative to the size of the Greek economy, Greece is in bronze medal position in the EU league table! This is a remarkable performance in an economy where investment has been so limited, for so long. Taken together with the EFSI transactions of our subsidiary, the EIF, we are set to mobilise 5 billion euros of new investment across the country under the Investment Plan for Europe.”

Hoyer said that he is visiting Athens to participate in the signing of an important financing operation with Piraeus Bank, to update senior ministers and others on the progress being made by the European Investment Bank’s Investment Team for Greece and to open the EIB Group’s new and expanded office in the city.

The full interview follows:
Mr. President you are a quite frequent visitor to Athens. What is the purpose of your trip to Greece this time?
– I am visiting Athens for three reasons: firstly to participate in the signing of an important financing operation with Piraeus Bank, secondly to update senior ministers and others on the progress the European Investment Bank’s Investment Team for Greece is making, and last, but by no means least, to open the EIB Group’s new and expanded office here in the city.

What is the Investment Team for Greece, and why was it established?
– I announced the establishment of the European Investment Bank’s Investment Team for Greece in December 2015. The purpose was simple: to reinforce the contribution that the Bank was already making to financing investments in Greece, with a dedicated team and with a new focus on private sector investments. Because the Team was to focus on private sector investments, there was a perfect synergy with the Investment Plan for Europe, the so-called Juncker Plan, and its financial instrument, the European Fund for Strategic Investments (EFSI). And so a second objective was to make sure that Greece made the best possible use of opportunities for higher risk financing supported by EFSI.

What has been achieved so far?
– We have transformed our investment activity in Greece, both in terms of how much we lend, and what we lend for. With three months to go, I can’t yet be precise about how much we will lend this year, but we are aiming for a record performance with lending of up to 2 billion euros.

But it is in the area of private sector lending, and in particular lending supported by EFSI, that we have had the biggest turnaround. Today, the Bank signed an important financing agreement with Piraeus Bank that took us through the 1.0-billion-euro mark for EFSI backed operations in Greece. Only six large countries (France, Germany, Italy, The United Kingdom, Spain and Poland) have achieved as much.

Looking at how much investment has been catalysed through EFSI relative to the size of the Greek economy, Greece is in bronze medal position in the EU league table! This is a remarkable performance in an economy where investment has been so limited, for so long. Taken together with the EFSI transactions of our subsidiary, the EIF, we are set to mobilize 5.0 billion euros of new investment across the country under the Investment Plan for Europe.

Would you please give more details about the operation with Piraeus Bank?
– This is an important transaction with an innovative financial structure that represents the EIB’s largest ever support for SME investment in Greece. With the support of the Juncker Plan, EIB will invest 350 million euros in the covered bond programme of Piraeus Bank. This will be the first covered bond issuance for Piraeus Bank since the onset of the financial crisis. As a result, Piraeus will commit to using the EIB financing for some 700 million euros additional lending to Greek SMEs and Mid-Caps. Given the importance, we have joined forces with our colleagues in the European Investment Fund, who will additionally be providing a 50-million-euro investment to Piraeus Bank as part of the transaction structure. The deal continues the successful implementation of alternative, innovative financing structures, through the use of capital market instruments, which we have been developing in Greece with the support of EFSI. The greatest significance of these landmark capital market operations is in paving the way for other investors, including private investors, to re-engage with the Greek market. Private investors consider the EIB Group’s participation a seal of approval and quality for investment projects. This is precisely the role that Bank and the EIF have been asked to play in delivering the Juncker Plan.

What more are you doing for SMEs and smaller companies?
– Support for Greek SMEs is at the heart of the EIB Group’s operations in Greece. We have talked about our transaction with Piraeus Bank. This follows on from the successful implementation of other innovative financing operations, using capital market instruments, with Alpha Bank and the National Bank of Greece. And late last year, we agreed a 1.0-billion-euro programme with all four systemic banks, as well as Pancretan Bank. All of these operations are designed to provide funding to channeled to SMEs and mid-caps.

But this is not all – our subsidiary, the European Investment Fund, is doing great work in Greece, providing guarantee programmes to Banks, again to support SMEs. The EIF is also working, at record speed, to put in the place the Equifund initiative, which will provide, in partnership with the Government of Greece and other financial institutions, much needed equity for smaller Greek companies that want to grow.

Can you lend directly to companies in Greece?
– Yes – where companies meet our credit criteria and have investment plans large enough to justify a direct loan (our lower limit is around 7.5 million euros), we can and do finance them. Where companies have smaller investments in mind, we finance them through our partner banks in the way I have described.

The EIB is known for lending to major infrastructure projects and the public sector – will this continue? Or will it become less important since you are concentrating on supporting corporate lending?
– Certainly it will! This year we have already financed investments to take place in the 14 newly privatised regional airports, and we continue to finance important projects in education, transport and energy. But it is not only concrete – I was pleased to learn that our 180-million-euro investment in the Hellenic Institute for Research and Innovation (surely, a ‘game changer’ in the quest to attract and retain the most able scientific researchers to Greece) is beginning to bear fruit with the announcement of the first round of PhD scholarships that will benefit from EIB money. I shall be following this project with particular interest.

The Bank has been in Greece for many years – why are you opening a new office in Athens?
– Quite simply, we had outgrown our old premises. With an expanded lending and advisory team in place, we now need more space. And I am delighted that in finding it, we are breathing new life into a well-known building in Athens city centre. To me, this is another very tangible example of the EIB Group investing for the future in Greece.