EIB providing €100m to North Macedonia to support SMEs affected by COVID-19

The financing is part of the Team Europe initiative and the EIB’s financial package to help the Western Balkans as the region recovers from COVID-19.

To support a faster recovery from the COVID-19 pandemic, the European Investment Bank (EIB) is providing €100 million to the Development Bank of North Macedonia JSC Skopje (DBNM). These funds will be available under more favourable conditions as immediate support for small and medium-sized enterprises (SMEs) and mid-caps. The financing is part of the Team Europe initiative and the EIB’s financial package to help the Western Balkans as the region recovers from COVID-19.

The scheme supports small businesses in North Macedonia that operate in labour-intensive sectors such as manufacturing and services so that they can recover quickly from the COVID-19 crisis. New sources of more affordable financing for both working capital and longer-term investments are being provided, with longer maturities and lower interest rates. The EIB loan will help SMEs and mid-caps maintain business continuity and sustain jobs while increasing productivity and expanding their activities. This loan is part of a €1.7 billion financial package adopted by the EIB in May 2020 under the Team Europe initiative to assist the socio-economic recovery of the region.

Lilyana Pavlova, EIB Vice-President responsible for the Western Balkans, said: “As the main financier and a long-standing partner both for the country and DBNM, the EIB is proud to be able to provide this substantial support for the recovery of small businesses in the Republic of North Macedonia. Our fruitful cooperation was strengthened by the visit of Prime Minister Zaev and Finance Minister Besimi to the EIB headquarters earlier this year. This loan testifies to our efforts to help the country’s transition to a stronger, more competitive and sustainable economy that is integrated into regional and EU markets. We are confident that we will further enhance our investment support for North Macedonia.”

CEO of the Development Bank of North Macedonia Kire Naumov said: “I am pleased to say that the collaboration between the EIB and the Development Bank is both strategic and successful. In the last 13 years, we have implemented five financing contracts and are now introducing the sixth, providing €550 million in total for economic development in North Macedonia. In the period ahead of us, when we will focus on economic recovery and faster growth, it is essential that we utilise companies’ potential for growth, development and adaptation. To do so, a strong partnership is needed between companies and financial institutions. As a Development Bank, we will continue to follow the needs of the private sector closely and strive to provide a portfolio of products and services so that companies’ full potential can be utilised. With this €100 million in investment, we expect to provide financial support for at least 300 projects conducted by domestic small and medium businesses.”

Minister of Finance of North Macedonia Fatmir Besimi, said: "We have signed today exceptionally significant agreements with the European Investment Bank for a credit line worth €100 million aimed at small and medium-sized enterprises in the Republic of North Macedonia. In other words, we have agreed on significant liquidity support geared towards the recovery from the effects of the COVID-19 pandemic. For our economy, these funds will mean job creation and new investments, and therefore boosted economic activity and accelerated economic growth. As a Government, we are committed to continuing to provide a fiscal stimulus for the economy until it gets back on a sound footing. Prior EIB credit lines, made available through the Development Bank, have yielded genuinely good results. These five credit lines, amounting to €450 million, have been fully deployed, supporting 2 090 company projects in the fields of production, services, construction, trade, hotels and restaurants, transport, health and education. Around 75% of the funds have been used for investments, with more than 8 000 jobs created as a result."

The Head of the EU Delegation in North Macedonia, Ambassador David Geer, said: “Head of the EU Delegation, Ambassador David GEER said: “Through a wide range of recovery packages and relief measures, the EU continues to provide support for small and medium-sized enterprises that are still facing many unprecedented challenges due to the Covid-19 pandemic. This additional MEUR 100 investment, coming right after the implementation of the EU for Resilience Programme MEUR 40 and the Macro-Financial Support MEUR 160, will provide additional liquidity and structural support for private companies. SME’s will help drive a stronger economic recovery and allow us to build back better, together. “