Portugal: CEB signs €100 million loan agreement with Instituição Financeira de Desenvolvimento (IFD) to support MSMEs
1 April 2019
LISBON – The Governor of the Council of Europe Development Bank (CEB) Rolf Wenzel was in Lisbon today for meetings with senior officials and to sign a €100 million framework loan agreement with Instituição Financeira de Desenvolvimento (IFD) to support Portuguese micro, small and medium-sized enterprises (MSMEs).
MSMEs are vital for the Portuguese economy. Yet they face constraints when it comes to accessing financing, including a high financing cost. The funds provided by the CEB will be on-lent by IFD to MSMEs to finance their productive investments and working capital and strengthen their sustainability and energy efficiency. Special attention will be given to MSME investments in innovation, technology and renewable energy as well as to businesses in densely-populated regions. By targeting specific sectors and geographical areas, the on-lending programme aims to reduce the income gap between urban and rural areas thus reinforcing social and economic cohesion across the country.
Established in 2014, IFD is a state-owned financial company mandated with designing and implementing financing solutions to facilitate access to funding for Portuguese MSMEs and help them to develop, thus contributing to job creation and economic growth. IFD also provides consulting services to small businesses in relation to capital structure, corporate strategy as well as corporate mergers and acquisitions.
The signing ceremony was opened by the Portuguese Minister Assistant to the Prime Minister and Minister for the Economy Pedro Siza Vieira at the Ministry of Economy in Lisbon. Signing on behalf of IFD was the Chief Executive Officer of IFD Henrique Cruz.
Earlier on the day, Governor Wenzel met with the Deputy Mayor of Lisbon José Sá Fernandes in Lisbon City Hall. The Governor provided information on CEB operations in the country and discussed with the Deputy Mayor the prospect of future cooperation.
CEB Governor Rolf Wenzel said: “As high unemployment rates in Europe persist, particularly among young people, supporting MSMEs as a way of promoting job creation is crucial. The CEB has been active in this area and, thanks to this first collaboration with IFD, we will be able to reach a large number of small businesses and local entrepreneurs across the country with little or no access to financing. We look forward to continuing and expanding our partnership with IFD in the future.”
“At the same time,” continued Governor Wenzel, “with this loan, the CEB is strengthening its operational presence in, and excellent relations with, Portugal. We are very pleased that Lisbon will be hosting the CEB’s annual Joint Meeting in July this year,” he concluded.Portugal has been a CEB member since 1976. The Bank has been contributing to the implementation of the country’s social policies, financing investments in the areas of social housing, urban development, environmental protection, health and education infrastructure, support for small and medium-sized businesses, and assistance to the victims of natural disasters. The CEB is also supporting the social integration of migrants and refugees in the country.
Set up in 1956, the CEB (Council of Europe Development Bank) has 41 member states. Twenty-two Central, Eastern and South Eastern European countries, forming the Bank's target countries, are listed among the member states. As a major instrument of the policy of solidarity in Europe, the Bank finances social projects by making available resources raised in conditions reflecting the quality of its rating (AAA with Standard & Poor's, outlook stable, AA+ with Fitch Ratings, outlook stable and Aa1 with Moody's, outlook stable). It thus grants loans to its member states, and to financial institutions and local authorities in its member states for the financing of projects in the social sector, in accordance with its Articles of Agreement.