The FINANCIAL — The European Investment Fund (EIF) and the German promotional bank KfW Bankengruppe have signed a €1 billion agreement for start-ups in Germany under COSME– an EU funding programme for SMEs – with the support of the Investment Plan for Europe.
The agreement will allow KfW to support €1 billion of loans to start-ups in Germany over the next two and a half years, benefitting over 15,000 start-ups and young small enterprises under KfW’s StartGeld programme. The deal benefits from the support of the European Fund for Strategic Investments (EFSI) through which the Investment Plan for Europe is being deployed by the European Commission and the EIB Group, according to the European Commission.
European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “The agreement being signed today by the EIF and KfW is fantastic news for start-ups across Germany. With the EFSI backing, €1 billion of loans will reach those individuals who want to grow their businesses and boost employment locally. This is exactly what the Investment Plan was created for.”
EIB Vice-President, Ambroise Fayolle said: “This transaction demonstrates the EIB Group’s commitment to make the Investment Plan for Europe operational even before EFSI is officially launched. €1 billion of EU support provides a substantial boost to SMEs in need of finance in order to grow and create jobs. Supporting jobs and growth lies at the heart of the EIB’s mission and we are pleased to be contributing to this aim with KfW. By providing guarantees against the inherent risk in this type of financing, the EIB Group will to act as a key support for German start-ups, helping to strengthen the role of businesses in both in Germany and across the European Union.”
Dr. Ingrid Hengster, member of the Executive Board of KfW Group, said: “Start-ups are the drivers of growth, innovation and job creation. Through the EFSI we can support even more start-ups and young entrepreneurs even better. As a first project under the Investment Plan in Germany, cooperation with the EIF on the basis of proven structures can serve as a model for further projects. KfW, as a promotional bank, is ready and willing to participate in its implementation.”
This is one of the first COSME transactions in Europe signed thanks to EFSI support. The deal reflects the EIB Group’s commitment to respond swiftly to calls from Member States, the European Commission and the European Parliament for a rapid launch of concrete initiatives under EFSI, accelerating lending and guaranteeing transactions capable of boosting jobs and growth in the EU.