What is the Growth & Environment Scheme?
Following an initiative of the European Parliament, the European Commission and the
European Investment Fund
are working together to facilitate access by SMEs to bank loans for new environmental investments.
This scheme provides for EIF guarantees on investment loans granted by financial institutions (mainly banks) in the Member States. The European Commission is providing budgetary support to pay for the guarantees as well as to help finance technical assistance.
The scheme is directed at smaller companies (no more than 100 employees), with a special focus on those with no more than 50 employees.
What investments are eligible?
- investments by companies producing environmental equipment;
- investments by companies with a direct aim of producing environmental benefits;
- other investments which have a significant environmental impact, but which are not undertaken solely or primarily for environmental reasons.
Examples of eligible new investments include (non exhaustive list): purification equipment, new machinery that reduces significantly the environmental impact or the energy consumption of the production process, the introduction of renewable sources of energy, the recycling of waste materials, waste treatment, treatment and/or protection of soil and ground water, investments aiming at enhanced health and safety measures (for the benefit of the environment, workers, etc.)
The specific conditions of eligible loans will vary from bank to bank according to their own practices. But to qualify for the EIF guarantee the loans must:
- be loans for investment (not working capital);
- have a minimum maturity of 3 years;
- be no larger than the equivalent of euro 1 million in national currency.
On each of these eligible loans the EIF provides the bank with a guarantee covering 50% of the loan.
The selection of borrowers is the full responsibility of the participating banks/financial institutions, who carry out the financial evaluation of the investments according to their normal credit procedures.
No fees are charged either to the intermediary bank or to the borrower for the EIF guarantee.
For the SMEs, there are specific financial benefits (e.g. reduced interest rates) to accompany the guarantees in some cases. The scheme can also cover some of the costs of engaging environmental consultants and providing other environmental services to small companies.
How can SMEs access the Growth & Environment Scheme?
Interested SMEs should approach one of the financial institutions participating in the scheme for more details about how it applies in their own country or they can first seek guidance on innovation financing sources and how to prepare for them from the
List of Financial Institutions participating in the Growth & Environment Scheme
will be kept up to date on this site.