The European Investment Bank (EIB) signed today an agreement for EUR 75 million with Intesa Sanpaolo, which joins as Confirming Bank in the up to EUR 500 million Trade Finance Facility in Greece, established in June 2013.
The agreement was signed in Milan today by Luca Lazzaroli, EIB Deputy Secretary General and Stefano Stangoni, Intesa Head of Global Banking and Transaction.
Intesa Sanpaolo will join the other Confirming Banks (i.e. Citi, Commerzbank and HSBC) extending the geographic coverage of the Facility and supporting in particular the trade flows between Greece and Italy.
The Facility is geared to support foreign trade activities of Greek SMEs and Mid-Caps. Under this innovative instrument EIB is providing its guarantee on a portfolio of Letter of Credit (LCs), Letter of Guarantees (LGs) and other trade Finance instruments confirmed by international banks. This will both alleviate cash collateral constraints otherwise imposed on most SMEs and increase access to international trade instruments at a time when trade has a significant role to play in economic development. Ultimately the Facility would have a positive impact on the Greek SMEs and Mid-caps, preventing viable enterprises from failing for lack of access to working capital and trade finance. By mitigating the risks involved in trade financing, the Facility should contribute to re-ignite trade flows with Greece, favouring an export-led recovery promoted in particular by SMEs and mid-caps.
The Facility received by the renowned Trade Finance Magazine (TF) yesterday in a public ceremony in London, the "Deals of the Year 2013 award" In a competition that saw more than 150 deals submitted around the world. The EIB Facility was selected for "providing a lifeline for Greece".
On this occasion, Mihai Tanasescu, EIB Vice-President stated: "Under the innovative trade finance facility the EIB will play a critical role in mitigating the risk perception of the commercial banks at a time when Greece needs trade finance in order to pursue export-led growth for its economic recovery. I am happy to see that international press appreciates our initiative, by presenting to us an award".
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