EIB and CGD partner to support economic recovery of Portuguese companies

The agreement is backed by the European Guarantee Fund, approved by the European Council as part of the €540 billion packages of EU measures deployed in response to the economic impact caused by COVID-19.

The European Investment Bank (EIB) is joining forces with Caixa Geral de Depósitos S.A. (CGD) to support the liquidity and investment needs of Portuguese companies affected by the economic crisis caused by the pandemic. To this end, the EIB will provide a €112.5 million guarantee, which will enable CGD to grant a total of €150 million of working capital, finance leases, and investment loans with the objective of facilitating the financing of up to €367.5 million in support of mid-caps, large companies, as well as public sector and other entities operating in the health sector.

The agreement is backed by the European Guarantee Fund, approved by the European Council as part of the €540 billion packages of EU measures deployed in response to the economic impact caused by COVID-19.

The operation, a risk-sharing guarantee, aims to facilitate access to finance at favourable conditions to mid-caps and large companies, as well as to the public sector and other entities operating in the health sector. This is achieved by increasing CGD’s lending capacity to eligible companies by providing capital relief and loss protection on newly originated transactions. The European Guarantee Fund guarantee will offer credit risk protection for up to 75% of each individual underlying corporate exposure.

EIB Vice-President Ricardo Mourinho Félix said: "The economic impact of the current healthcare crisis has highlighted the need to support investment and liquidity needs of companies across Europe. Operations from the European Guarantee Fund like this one with CGD are essential to complement the extraordinary measures adopted by the National Authorities to solve the liquidity challenges faced by many companies, thereby safeguarding jobs in Portugal and Europe.”

Paulo Moita de Macedo, CEO of CGD, said: “Medium and large companies are generators of wealth and employment and are equally fundamental to the success of small companies.”