EIB and IKB Join Forces to Unlock €400 Million in Sustainable Financing for Germany’s Mid-Cap Companies
(IN BRIEF) The European Investment Bank (EIB) and IKB Deutsche Industriebank AG have launched a partnership to support sustainable finance for mid-cap companies in Germany, introducing a new loan portfolio of €400 million. This initiative is aimed at firms with up to 3,000 employees, enabling them to access long-term loans to transition towards sustainable business models. The EIB will provide guarantees totaling €200 million to secure this funding, which is designed to promote projects focused on enhancing energy efficiency and reducing carbon emissions. The partnership reflects the EIB’s commitment to fostering economic growth and job security while also addressing the challenges posed by current economic uncertainties.
(PRESS RELEASE) LUXEMBOURG, 10-Oct-2024 — /EuropaWire/ — The European Investment Bank (EIB) and IKB Deutsche Industriebank AG (IKB) have announced a significant new partnership aimed at bolstering investment among Germany’s mid-cap companies. This collaboration introduces a loan portfolio totaling €400 million, specifically designed to provide long-term financing for firms with up to 3,000 employees as they transition to more sustainable business models. The EIB will back this loan initiative with guarantees amounting to €200 million.
This alliance between EIB and IKB is set to streamline the process for mid-sized companies to secure financing under favorable terms for their sustainable investment projects. Beneficiaries of this financing will be able to fully leverage the advantages offered by the EIB’s guarantees.
The impact of this partnership extends beyond mere financial support; it aims to foster long-term economic growth and enhance job security within the sector. Notably, one-third of the loans will be allocated to initiatives that contribute to the green transition, such as enhancing energy efficiency, curbing carbon emissions and air pollution, and facilitating market integration through participation in wholesale markets.
The EIB guarantees are part of a broader EU-linked risk-sharing program designed to mitigate barriers to financing exacerbated by current economic challenges, including inflation, supply chain disruptions, rising interest rates, and energy insecurity.
EIB Vice-President Nicola Beer emphasized the importance of mid-cap companies, stating, “These enterprises are crucial for driving economic growth and play a significant role in both the green and digital transitions. By partnering with IKB to provide long-term financing, we empower mid-caps to plan for their future, fostering innovation, resilience in supply chains, and job security. This ultimately strengthens Germany and Europe as competitive business locations.”
IKB, as a financier committed to the growth of German mid-caps, is enthusiastic about this collaboration with the EIB. The partnership aligns with IKB’s mission to enhance its position as a sustainable financial service provider for medium-sized firms. A substantial portion—30%—of the guarantee framework will specifically support projects aimed at improving carbon footprints and promoting environmental sustainability.
IKB CEO Michael Wiedmann remarked, “This agreement solidifies IKB’s role as a key provider of transformation financing for mid-cap companies. We are excited to expand our financing options for our clients’ sustainability projects, making them even more appealing.”
With a diverse array of sustainable product initiatives, IKB is poised to make a meaningful contribution to the shift toward a green economy. These initiatives encompass syndicated ESG loans, project finance, ESG loans with extended maturities, and ESG advisory services. The bank aims to mobilize between €3 billion and €4 billion in sustainable new business volume by the end of 2025, in alignment with its Sustainable Finance Framework. In the previous financial year, IKB successfully mobilized approximately €1.7 billion in sustainable new business.
Background information
The European Investment Bank is the long-term lending institution of the European Union. It finances sound investments that contribute to EU policy objectives. EIB projects strengthen competitiveness, sustainable development, and social and territorial cohesion. They promote innovation and accelerate the transition to climate neutrality. The EIB Group – which also includes the European Investment Fund – signed a total of €88 billion in new financing for over 900 projects in 2023. These commitments are expected to mobilise around €320 billion in investment, supporting 400 000 companies and 5.4 million jobs.
IKB Deutsche Industriebank AG, headquartered in Düsseldorf, focuses on high-end German mid-caps – mainly firms with an annual turnover of more than €100 million. Since it was founded in 1924, IKB has specialised as an independent private bank, primarily in long-term financing for companies and projects. In its customer business, IKB focuses on structured financing and credit advisory services. The bank also offers financing solutions that can be used independently of customer balance sheets, including assistance for companies on the capital market – for example, in issuing promissory notes or bonds. IKB is also a specialist offering customers access to public funding programmes. It employs around 600 people at six locations, with a sales network that covers all regions of Germany.
Media Contact:
Donata Riedel
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+352 4379 – 86192
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SOURCE: European Investment Bank
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