EIB in further credit talks with two banks

THE EUROPEAN Investment Bank has said it is in talks with Bank of Ireland and AIB about providing further credit to the banks to be loaned on to small- and medium-sized businesses.

The European Union’s lender provided €100 million to each of the banks and €60 million Ulster Bank for SME lending in 2009.

Plutarchos Sakellaris, the bank’s vice-president responsible for Ireland, said the EIB was in discussions with Bank of Ireland and AIB about providing similar amounts again for SME lending.

“We are speaking to AIB and Bank of Ireland and I would say that we would aim for that ballpark again,” Mr Sakellaris said.

He was speaking to The Irish Times before the EIB announced it had agreed to provide €235 million in loans for the ESB’s investment programme and €90 million to fund redevelopments at University College Dublin.

The EIB will set conditions on the SME loans – that the money is loaned on to businesses as quickly as possible and that the benefit of the cheaper credit provided by the bank is passed on to companies.

Mr Sakellaris said the bank would not “micro-manage” to ensure loans were provided to particular firms. “We can’t go to the banks and get them to change their credit models – it would not be right.” The EIB banker and his officials yesterday met the Ministers for finance, transport, energy and public expenditure and reform in Dublin plus the National Treasury Management Agency.

The loan to the ESB will finance half the cost of €470 million investment plan to enhance transmission and distribution of electricity from wind farms in the west of the State to consumers in the east.

It will improve the efficiency and capability of the electricity networks to integrate more renewable energy into the network.

The loan to UCD will fund six buildings including the second phase of a science centre, the construction of a school of law, and the refurbishment and construction of student accommodation.

The EIB has provided loans of €500 million a year to projects and businesses in Ireland over the past five years.