Investment Plan for Europe: €170m of financing for Romania’s students and smaller companies

The European Investment Fund (EIF) today concluded four financing agreements in Romania, under which the country will benefit from over €170m of financing on favourable terms:

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  First Erasmus+ guarantee agreement of €4.5m to help some 450 Master's students finance their studies abroad
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  Investment Plan for Europe: three guarantee agreements under the COSME Loan Guarantee Facility to support small and medium-sized companies (SMEs):

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    €25m with CEC Bank S.A.
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    €80m with Deutsche Leasing Romania IFN S.A.
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    €63m with Libra Internet Bank

The EIF and a non-banking financial institution FINS signed the first Erasmus+ guarantee agreement in Romania, enabling FINS to offer a new loan product to Master’s students who would like to study abroad. Thanks to the guarantee, about 450 students will be able to get more favourable conditions when they apply for a loan to study in another EU country, Iceland, Liechtenstein, North Macedonia, Norway or Turkey. The €4.5m agreement comes under the Erasmus+ loan guarantee scheme financed by the European Union and managed by the European Investment Fund.

In addition, the EIF signed three COSME agreements with CEC Bank S.A., Deutsche Leasing Romania IFN S.A. and Libra Internet Bank S.A. The agreements will allow these institutions to provide some €168m of new debt financing to small and medium-sized Romanian businesses. They are backed by the European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe - the Juncker Plan - and will facilitate access to loans and leases for almost 3,000 SMEs. The COSME support enables the EIF financial partners to go beyond their credit policy: for instance, they can offer debt financing with substantially reduced collateral requirements or target higher-risk SMEs.

European Commissioner for Internal Market, Industry, Entrepreneurship and SMEs, Elżbieta Bieńkowska said: “I welcome these agreements under the Juncker Plan, which will help 3,000 Romanian small and medium-sized businesses get better access to finance. In addition, 450 Romanian students will receive financial support under one of Europe’s most emblematic programmes, Erasmus+, to live and study abroad. These four agreements signed today are good examples of Europe’s value in Romania.”

European Commissioner Tibor Navracsics, responsible for Education, Culture, Youth and Sport, said: "The European Commission is pleased with this agreement with FINS, which puts funding for studying abroad at the centre of its activities. Thanks to this new EU-guaranteed agreement, some 450 talented Romanian students will be able to fulfil their ambition of obtaining a Master’s degree at a university in another European country."

Commenting on the agreements EIF Deputy Chief Executive Roger Havenith said: “For the first time in Romania EIF operations will support enhanced access to finance for 450 students to obtain loans to cover their study and living costs, hence extending study possibilities to a broader student audience. In parallel, via our new COSME transactions, we will also improve conditions for almost 3,000 SMEs in financing their projects. This will strengthen the competitiveness of this important segment of the Romanian economy which serves as an engine for economic growth, job creation and innovation.”

Alexandru Ghita, President of FINS, noted: “The guarantee offered by the EIF enables for the first time a study loan that really meets the actual financial needs of Romanian students: covering both tuition fees and living costs, cognisant of the lack of employment history of many students and using as the main evaluation criteria their academic and professional background and potential. The financial solutions offered by FINS and enabled by the EIF truly support the vocation of higher education as a social mobility mechanism, providing equal opportunities to students from all walks of life, irrespective of their wealth.”

Laurentiu Mitrache, CEO and President of the Executive Committee of CEC Bank, said: "The guarantee agreement signed today with the European Investment Fund confirms CEC Bank's strategy to support business development for small and medium-sized enterprises. Our bank is constantly aiming to facilitate companies' access to modern financial products and services and we believe that the financial instrument developed at European level and implemented by CEC Bank satisfies the current needs of the private sector and contributes to medium and long-term economic growth".

Laurentiu Zaharia, Managing Director of Deutsche Leasing Romania IFN S.A., stated: “Bearing in mind that our core business is equipment finance for SMEs, the EIF became a strategic partner for us in making our finance products available to a broader range of small and medium-sized enterprises. Besides that, this cooperation with the EIF in setting up the COSME structure is very constructive and will foster broader collaboration.”

Representative of Libra Internet Bank, Emil Bituleanu (CEO) said: “Supporting small businesses with financing set-up in partnership with European Investment Fund has proved to be a winning formula both for our bank and our customers. Therefore, we are delighted to participate in this new investment plan for Europe”.

About the EIF

The European Investment Fund is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments, which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. More information on the EIF's work under EFSI is available here.

About the Investment Plan for Europe

The Investment Plan for Europe, known as the Juncker Plan, is one of the European Commission’s top priorities. It focuses on boosting investment to generate jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment, and providing visibility and technical assistance to investment projects.

The European Fund for Strategic Investments (EFSI) is the main pillar of the Juncker Plan and provides first loss guarantees, enabling the EIB to invest in more projects that often come with greater risks. EFSI has already yielded tangible results. The projects and agreements approved for financing under EFSI are expected to mobilise about €390bn in investments, including €2.6bn in Romania, and support 929,000 SMEs in the 28 EU countries.

More information on the results of the Investment Plan for Europe is available here.

About COSME

COSME is the EU programme promoting the competitiveness of small and medium-sized businesses (2014- 2020) with a total budget of €2.3bn. At least 60% of the programme will be devoted to easing access to finance for SMEs in Europe, with two financial instruments. The COSME Loan Guarantee Facility supports guarantees and counter-guarantees to financial institutions to help them provide more loans and lease finance to SMEs. This facility also includes securitisation of SME debt finance portfolios. The COSME programme also invests through the COSME Equity Facility for Growth in equity funds that provide risk capital to SMEs, mainly in the expansion and growth stages. The COSME programme builds on the success of the Competitiveness and Innovation Framework Programme (CIP) (2007-2013), which helped to mobilise almost €21bn of loans and more than €3bn of venture capital supporting over 384,000 SMEs in Europe.

Businesses can contact selected financial institutions in their country to access EU financing: http://www.access2finance.eu/.

About Erasmus+ Master Loans

The Erasmus+ programme, of which the Erasmus+ Master Student Loan Guarantee Facility is part, is the biggest mover of students in the EU, with around 300,000 higher education students and staff studying, working or undertaking a traineeship in another European country every year. It is managed by the European Commission's Directorate-General for Education, Youth, Sport and Culture (DG EAC) and its executive agency. The DG's activities in education are also framed by the Education and Training 2020 strategy (ET2020), which contributes on education to the Europe 2020 strategy, designed to promote growth and jobs in Europe.