7 banks ben­e­fit so far, Hel­lenic Bank to­tal reaches

Financial Mirror (Cyprus) - - FRONT PAGE -

The Euro­pean In­vest­ment Bank (EIB) signed two fi­nance agree­ments on Mon­day worth EUR 115 mln that aim to fund pub­lic in­fras­truc­ture and to boost SMEs in or­der to achieve eco­nomic re­cov­ery and the cre­ation of new jobs.

The pair of agree­ments were signed in Ni­cosia by Fi­nance Min­is­ter Har­ris Ge­or­giades, EIB Vice Pres­i­dent Jonathan Tay­lor and Hel­lenic Bank Chair­woman Irena Ge­or­giadou.

The first agree­ment is for a EUR 100 mln frame­work loan sup­port­ing EU Co-Fi­nanc­ing Funds for strate­gic in­fras­truc­ture projects to be im­ple­mented dur­ing the 2014-2020 pe­riod, while the sec­ond loan was with Hel­lenic Bank for EUR 15 mln, with the com­mer­cial lender match­ing the amount from own funds for a to­tal dis­tri­bu­tion to SMEs of EUR 30 mln

Present at the sign­ing cer­e­mony was EIB Pres­i­dent Werner Hoyer who ex­pressed his op­ti­mism that “def­i­nitely the worst is be­hind.”

“Since my last visit, Cyprus has made se­ri­ous progress and fis­cal de­vel­op­ments con­tinue to ex­ceed ex­pec­ta­tions, the financial sit­u­a­tion of the banks is show­ing signs of im­prove­ment and we have seen im­por­tant growth en­hanc­ing re­forms,” he said.

“Here in Cyprus we cur­rently co­op­er­ate with seven banks and I am con­fi­dent that we will be able to an­nounce ad­di­tional co­op­er­a­tions be­fore the end of this year”, he noted. This ap­proach, he added, “is per­form­ing well and is de­liv­er­ing real ben­e­fits to the Cypriot econ­omy.”

He added that “we will con­tinue the fi­nanc­ing of large scale in­vest­ment projects.”

“We are sup­port­ing sev­eral in­vest­ments in the trans­port sec­tor, in­clud­ing the road link be­tween the Li­mas­sol port and the Li­mas­solPaphos high­way; in the en­ergy sec­tor we are fi­nanc­ing sev­eral large in­vest­ments in­clud­ing the Vas­si­likos pow­er­plant”, he added. The EU bank is “very keen to sup­port the coun­try’s switch from (crude) oil fuel to a more en­vi­ron­men­tal friendly nat­u­ral gas or to re­new­able sources of en­ergy.”

To­gether with fis­cal con­sol­i­da­tion and putting pub­lic fi­nances in or­der, this agree­ment al­lows for a timely im­ple­men­ta­tion of all those which have been planned for the next three years, said Fi­nance Min­is­ter Har­ris Ge­or­giades.

There is no ex­cuse, no fis­cal lim­i­ta­tion and it is up to the author­i­ties in charge, the gov­ern­ment de­part­ments, the lo­cal ad­min­is­tra­tions and all the other ac­tors to im­ple­ment what has been planned, he added.

Re­fer­ring to the sec­ond agree­ment for a EUR 15 mln loan by Hel­lenic Bank with the gov­ern­ment guar­an­tees for fund­ing small and medium size com­pa­nies, Ge­or­giades said that the agree­ment ex­tends a fund­ing pro­gramme for SMEs, which he called of “strate­gic im­por­tance.”

On his part Jonathan Tay­lor re­called that in 2014 the EIB to­gether with the Min­istry of Fi­nance and sev­eral lo­cal banks im­ple­mented a new scheme for fi­nanc­ing smaller com­pa­nies and projects.

Less than 12 months af­ter the start of the scheme al­most half of the EUR 185 mln agreed with the seven par­tic­i­pat­ing banks has al­ready been al­lo­cated to vi­able and el­i­gi­ble financial ben­e­fi­cia­ries, he said.

“The first agree­ment with the Hel­lenic Bank for EUR 35 mln was signed in late 2014 and has been fully al­lo­cated,” he added, rais­ing the bank’s fund­ing to­tal to EUR 50 mln.

Such partnerships, Tay­lor noted, are nec­es­sary for the EIB to con­tinue sup­port­ing SMEs which are the back­bone of the Cypriot and the Euro­pean econ­omy.

Be­fore the end of this year we have to be in a po­si­tion to make new an­nounce­ments ex­tend­ing the scheme both in terms of part­ner banks and ad­di­tional in­vest­ments, he said.

Hel­lenic bank Chair­woman Irena Ge­or­giadou said that un­der the agree­ment, which is guar­an­teed by the gov­ern­ment, EUR 30 mln will be made avail­able in low in­ter­est loans to SMEs and mid-cap or­gan­i­sa­tions, of which the bank is putting up EUR 15 mln from own funds.

Irena Ge­or­giadou said that the agree­ment con­sti­tutes an­other step for­ward to­wards the re­cov­ery of the Cyprus econ­omy and the achieve­ment of vi­able growth rates, adding that within the next 15 months, the co­op­er­a­tion with the EIB will have re­sulted in EUR 100 mln in low in­ter­est loans to busi­nesses; EUR 50 mln from the EIB and EUR 50 mln matched by Hel­lenic.

The ma­jor­ity of loans from the first phase were ab­sorbed by busi­nesses and or­gan­i­sa­tions in the ed­u­ca­tion, tourism and trade sec­tors.

Ge­or­giadou said that the aim of the co­op­er­a­tion be­tween Hel­lenic and the EIB is to add real value to the econ­omy, which has been suf­fer­ing over the past two years from a liq­uid­ity crunch and slug­gish busi­ness growth.

She em­pha­sised that he bank con­tin­ues to sup­port the Cypriot econ­omy and is con­fi­dent that a po­ten­tial ex­ists, as proven by the dou­bling of loans granted to house­holds and busi­nesses com­pared to last year, while at the same time the Group has pro­ceeded to cre­ate 200 new jobs.

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