Projects supported by the EIB since 1979 represent nearly one billion euros – EIB Vice-President

The European Investment Bank Group, which includes the European Investment Bank (EIB) and the European Investment Fund (EIF), has supporting the Maltese economy since 1979 and supporting projects in the country for almost €1 billion since then, said EIB Vice-President Gelsomina Vigliotti.

In an interview with The Malta Independent on Sunday, Vigliotti spoke about the help the EIB has provided to Malta, how it has helped Malta in the energy sector and how it helps countries facing the current challenges posed by the situation. in Europe.

Vigliotti was in Malta earlier this week to participate in a hybrid conference titled Funding the transition towards a carbon neutral economy”, organized in collaboration with the Central Bank of Malta. She also attended an event where it was announced that the EIB will finance a 20 million euro project from Epic to accelerate the company’s network program.

Could you start by giving a brief overview of what the InvestEU fund is and what it finances?

Sure. Let me start by saying that the EIB is the lending arm of the European Union, the bank of the European Union. We are the largest multilateral financial institution in the world, the biggest funder of climate action and, among other things, the main implementing partner of the InvestEU programme.

The InvestEU programme, which builds on the successful model of the Investment Plan for Europe, better known as the Juncker Plan, operates through four policy strands which reflect the main political priorities of the European Union, namely: sustainable infrastructure; research, innovation and digitization; SMEs and, last but not least, social investment and skills.

In addition to the financial products made available under InvestEU, the EIB, through the Advisory Hub, will provide advisory support across a wide range of sectors to bring more and more projects to the stage. financing and ensuring the achievement of InvestEU’s strategic objectives.

What are you trying to achieve from your investments under InvestEU?

With an EU budget guarantee of €26.2 billion, InvestEU aims to mobilize more than €372 billion in the real economy over the period 2022-2026. The program is an instrument at the service of all EU countries, regardless of the size of their economy, to support new green and digital sectors while strengthening the EU’s leadership in RDI and stimulating the dynamic start-up ecosystem, both in Malta and in Europe.

Another crucial element of this program is that it will focus on operations with a higher risk profile than the average of operations financed by the EIB Group, focusing on projects that would be difficult to realize without the InvestEU guarantee. .

What have been the most significant Maltese projects you have funded since operations began in 1979?

The EIB Group, which includes the European Investment Bank (EIB) and the European Investment Fund (EIF), has supported the Maltese economy since 1979, having supported projects in the country for almost 1 billion euros since.

If we talk about flagship and visible projects, we are probably the proudest of having financed with 40 million euros the construction in Valletta of a new city gate, a new parliament building and a open-air arena on the site of the former Royal Opera House destroyed in World War II. Improving and modernizing urban infrastructure is a key area for the EIB Group, as it contributes to city regeneration and long-term economic growth, especially in a country heavily dependent on tourism. More recently, the EIB provided nearly EUR 25 million for the construction and renovation of nearly 600 social housing units in Malta.

However, we must not forget to mention the support for small and medium-sized enterprises, the backbone of the Maltese economy. To give you an idea of ​​the impact figures, the EIB Group, mainly through the SME Initiative, has supported the business needs of over 2,000 SMEs in the country, supporting over 13,000 jobs.

In addition, over the past seven years we have strengthened our commitment to the Maltese telecommunications sector by supporting three projects with €68 million in EIB financing and mobilizing around €165 million in the economy. real. Just this week we are supporting EPIC with a €20 million loan, which will help the company roll out its 5G network to achieve nationwide coverage in the country by 2024. Broadband connections are essential to take full advantage of economic digitalisation. sectors such as agriculture, tourism and trade, helping the economy to thrive.

Could you provide a clearer overview of the process a business in turnaround should go through to apply for funding?

It is very simple. Project promoters and financial intermediaries can submit their financing requests to the EIB Group. They can contact us directly without going through a local or governmental authority. However, let me stress that projects must be economically and technically viable and correspond to the eligible policy areas mentioned above in order to receive funds via InvestEU.

Under this program, we can finance SMEs and RDI projects whose overall total cost is at least 15 million, whereas for infrastructure projects, we are considering larger projects in terms of volume.

The EIB has had the most activity in the energy sector, why is this the case?

Between 2008 and 2010, we financed two major energy projects in Malta to 250 million euros, representing approximately 25% of the EIB Group’s overall activity in the country. These two operations made it possible to upgrade and reinforce the Maltese electricity production capacity and supply network and to set up a cable link linking Malta and Sicily across the Mediterranean Sea. As the EU climate bank, we believe that energy investments are key to securing Europe’s future as a sustainable yet prosperous economy. We stand ready to help Malta undertake the investments and reforms needed to promote its green transition.

Since we are talking about investments in energy, I would also like to point out that the The EIB was the first international financial institution to end funding for fossil fuel projects.

How important is it to support SMEs, as opposed to large companies?

The EIB is a project-oriented bank and finances both large and small companies and public sector entities.

As far as SMEs are concerned, these companies are of paramount importance because they are an engine of global economic development. They create new jobs, products and services, contributing significantly to economic growth. Europe’s 23 million small businesses represent 99.8% of non-financial businesses and provide around two-thirds of all jobs in this segment.

In addition, SMEs are also key drivers of innovation. They are generally more flexible and can accept change more quickly than larger companies, as has been the case during the pandemic. Many small businesses offer new ideas and exciting new products or services while offering high growth potential.

However, unlike larger companies, SMEs often fail to find the financing they need to invest in their future. This is where the EIB Group comes in to fill this financial gap.

In 2021 alone, the EIB Group supported more than 430,000 SMEs and ETIs with 45 billion euros invested. The commitment to small and medium-sized enterprises continued to be the EIB Group’s top priority in terms of lending volume.

Given the current crisis in Europe, how important is EIB financing to help Member States such as Malta?

Small states tend to be more vulnerable to economic shocks and climate change, which threatens Maltese water supplies and coastlines due to sea level rise and extreme heat waves. EIB Group financing for small states like Malta is essential to cope with bbarriers to sustainable and sustainable growth while creating new jobs. We offer favorable financing terms in the form of lower interest rates and/or longer maturities.

Do you see a situation where, in the long term, SMEs will need more financial support?

Additional resources would be needed to help SMEs embark on the path of digital transformation in order to improve their competitiveness and performance, stimulate innovation and increase productivity. Moreover, in the current circumstances, SMEs are facing various challenges including rising inflation as well as rising fuel and energy prices. It is therefore crucial to rely on the support of SMEs to enable them to promote their green transition by investing in energy efficiency, which can meet the challenges of competitiveness and improve energy security by reducing dependence on energy imports. fossil fuels.

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