Guarantees of the European Guarantee Fund
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These guarantees are available to applicants for Startuok loans only. |
The European Guarantee Fund (EGF) was established in 2020 by the European Investment Bank group and EU member states – financial contributors to the Fund. The purpose of the Fund is to mitigate the effects of the COVID-19 crisis through ensuring that undertakings from contributing member states have access to sufficient liquidity instruments to overcome the crisis and can continue to grow and develop. More about EGF
Who is eligible for EGF guarantee?
- Applicants eligible for Startuok loans;
- Applicants who do not operate in the sectors restricted by the European Investment Bank EIB);
- Applicants who meet the additional requirements of the European Investment Fund (EIF).
EIB Group Restricted Sectors
- Production or activities involving harmful or exploitative forms of forced labour/harmful child labour.
- Production or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements.
- Any business relating to pornography or prostitution.
- Production or trade in wildlife or wildlife products regulated under the Convention on International Trade in Endangered Species or Wild Fauna and Flora (CITES).
- Production or use of or trade in hazardous materials such as radioactive materials (except for medical isotopes and materials for diagnostics and treatment in healthcare provision), unbounded asbestos fibres and products containing PCBs.
- Cross-border trade in waste and waste products unless compliant with the Basel Convention and the underlying national and EU regulations but for the avoidance of doubt, use of waste as a fuel in district heating is not excluded.
- Unsustainable fishing methods (i.e. drift net fishing in the marine environment using nets in excess of 2.5 km in length and blast fishing).
- Production or trade in pharmaceuticals, pesticides/herbicides, chemicals, ozone depleting substances and other hazardous substances subject to international phase-outs or bans.
- Destruction of Critical Habitats, i.e. areas with high biodiversity value that meet the criteria of the World Conservation Union (hereinafter - IUCN) classification, including habitat required for the survival of critically endangered or endangered species as defined by the IUCN Red List of Threatened Species or as defined in any national legislation.
- Production and distribution of racist, anti-democratic and/or neo-Nazi media.
- Production / trade in tobacco, if it forms a substantial part of the applicant’s primary financed business activities or a substantial part of the EGF Borrower Transaction.
- Live animals for scientific and experimental purposes, including the breeding of these animals, unless in compliance with the EU Directive 2010/63/EU as amended by Regulation (EU) 2019/1010 of the European Parliament and of the Council on the protection of animals used for scientific purposes.
- Production, distribution (or processing of, as well as trade in ammunition and weapons, military/police equipment, construction of infrastructure which results in limiting people’s individual rights and freedom (i.e. prisons, detention centres of any form).
- Gambling, casinos and equivalent enterprises or hotels hosting such facilities.
- Commercial concessions over, and logging on, tropical natural forest; conversion of natural forest into a plantation.
- Purchase of logging equipment for use in tropical natural forests or high nature value forest in all regions; and activities that lead to clear cutting and/or degradation of tropical natural forests or high nature value forest.
- Creation and development of new palm oil plantations.
- Any business with a political or religious content.
- Fossil fuel-based energy production and related activities:
– Coal mining, processing, transport and storage;
- Oil exploration & production, refining, transport, distribution and storage;
- Natural gas exploration & production, liquefaction, regasification, transport, distribution and storage;
- Electric power generation exceeding the Emissions Performance Standard (i.e. 250 grams of CO2e per kWh of electricity), applicable to fossil fuel-fired power and cogeneration plants, geothermal and hydropower plants with large reservoirs. - Energy-intensive and/or high CO2-emitting industries:
- Manufacture of other inorganic basic chemicals;
- Manufacture of other organic basic chemicals;
- Manufacture of fertilisers and nitrogen compounds;
- Manufacture of plastics in primary forms;
- Manufacture of cement;
- Manufacture of basic iron and steel and of ferro-alloys;
- Manufacture of tubes, pipes, hollow profiles and related fittings, of steel;
- Cold drawing of bars;
- Cold-rolling of strip;
- Cold forming or folding;
- Cold drawing of wire;
- Aluminium production;
- Manufacture of aircraft and related machinery;
- Passenger air transportation;
- Cargo air transportation. - Financial activity.
Additional EIF requirements for applicants
- The applicant does not operate in the sectors restricted by EIB Group.
- The applicant is established and operates in a state – financial contributor to EGF.
- The applicant is not registered or established in a non-compliant jurisdiction.
- The applicant is not engaged in illegal activity or activity carried out for illegal purposes as defined in applicable laws, in any of the following areas:
- fraud, corruption, coercion, collusion,
- money laundering, financing of terrorism or tax fraud, as defined in the Anti-Money Laundering Directives,
- fraud and other illegal activity directed against EIB, EIF and EU financial interests as defined in the Directive on the Protection of the EU Financial Interests. - The applicant is not subject to sanctions and has not breached restrictive measures. Restrictive measures include:
- EU restrictive measures and/or
- any other economic or financial sanctions imposed by the United Nations or any other agency or person duly designated and authorised by the United Nations to impose, administer, implement and/or enforce such measures; and/or any economic of financial sanctions imposed by the United States Government or any of its departments, units, agencies or offices, including the Office of Foreign Assets Control (OFAC) of the United States Department of Treasury, the United States State Department and/or the United States Department of Commerce. - To the best of its knowledge, the applicant is not in one of the following situations:
- it is not bankrupt, failing or being wound up, or such processes are not administered by a liquidator or by the courts, it has not entered into an arrangement with creditors, it has not suspended its operations or has not entered into an arrangement with creditors for suspension of its operations (or equivalent arrangement) which has been approved by a competent court, where this is required under applicable law, or in any other similar situation resulting from a similar procedure under national law or other laws; (ii) in the past five (5) years, it has not been the subject of a final judgment or final administrative decision for being in breach of its obligations relating to the payment of taxes or social security contributions in accordance with the applicable law and where such obligations remain unpaid unless a binding arrangement has been established for payment thereof;
- in the past five (5) years, it or any of the persons having powers of representation, decision-making or control over it has been convicted by a final judgment or a final administrative decision for grave professional misconduct, where such conduct denotes wrongful intent or gross negligence, which would affect its ability to implement its obligations under the guarantee, and which is for one of the following reasons:
- fraudulently or negligently misrepresenting information required for the verification of the absence of grounds for exclusion or the fulfilment of selection criteria or in the performance of a contract or an agreement;
- entering into agreements with other persons aimed at distorting competition;
- attempting to unduly influence the decision-making process of the contracting authority during the relevant “award procedure” as such term is defined in Article 2 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union;
- attempting to obtain confidential information that may confer upon it undue advantages in the relevant “award procedure” as such term is defined in Article 2 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union; - in the past five (5) years, it or persons having powers of representation, decision-making or control over it has been the subject of a final judgment for:
- fraud;
- corruption;
- participation in a criminal organisation;
- money laundering or terrorist financing;
- terrorist offences or offences linked to terrorist activities, or inciting, aiding, abetting or attempting to commit such offences;
- child labour and other forms of trafficking in human beings; - the applicant is under the published list of economic operators excluded or subject to financial penalty, in each case contained in the early detection and exclusion system database (EDES).
- The applicant is not delinquent (for more than 20 days) or in default in respect of any transaction (in the case of refinancing, including the transaction that is being refinanced) granted by a financial intermediary or by another financial institution, following the checks in accordance with the internal guidelines and credit and recovery policy of the financial intermediary.
What are the benefits?
Advantages of the financing covered with EGF guarantee:
- reduced interest rate on the loan;
- funding of projects presenting a higher risk;
- funding for applicants who have no access to sufficient loan security instruments.
How much?
Maximum guarantee amount: EUR 1,800,000 (provided that state aid is provided under EGF regime by analogy to section 3.1 of the Temporary Framework.
Intensity of the guarantee: 70 %.
Terms
- Minimum maturity of the loan covered by the guarantee: 3 months;
- Maximum maturity of the loan covered by the guarantee: 10 years (where state aid is provided under EGF regime by analogy to section 3.1 of the Temporary Framework);
- Maximum maturity of the loan covered by the guarantee: 6 years (where state aid is provided under EGF regime by analogy to section 3.2 of the Temporary Framework);
- Guarantees for Startuok loans are issued up to 31 December 2022.
INVEGA shall determine whether the loan is eligible for inclusion in the EGF guarantee portfolio after its assessment of the applicant’s information on the granting of loan.
Cases where EGF-guaranteed financing is not provided or is subject to exceptions
- Acquisition of a restricted asset for the purpose of transport.
- Construction of new buildings and major rehabilitation of existing buildings (i.e exceeding 25% of the surface area or 25% of the building value excluding land) any such construction of new buildings and major rehabilitation of existing buildings shall comply with national energy standards defined by the Energy Performance of Buildings Directive (EPBD, 2018/844/EU).
- Heating / cooling of buildings (including combined production of cooling/heat and power (CCHP, CHP)), except where the funding is made available for:
- Investments involving heat production using renewable fuels or “eligible cogeneration”, where “eligible cogeneration” is defined as:
- based on 100% renewable energy, waste heat or a combination thereof, or;
- if based on <100% renewable energy and the remaining part is gas-fired (no other fossil fuel is eligible): overall efficiency shall exceed 85% where efficiency is calculated as: (heat + electricity production) divided by gas fuel consumption; - investments involving small and medium-sized natural gas boilers with a capacity of up to 20 MWth meeting the minimum energy efficiency criteria, defined as A- rated boilers in the EU (applicable to <400kWth) or boilers with efficiencies of >90%;
- investments involving the rehabilitation or extension of existing district heating networks if there is no increase in CO2 emissions as a result of the combustion of coal, peat, oil, gas or non-organic waste on an annual basis; and/or
- investments involving new district heating networks or substantial extensions of existing district heating networks if the network uses at least 50% renewable energy or 50% waste heat or 75% cogenerated heat, or 50% of a combination of such energy and heat.
- Investments involving heat production using renewable fuels or “eligible cogeneration”, where “eligible cogeneration” is defined as:
- Investments in power and/or heat production, using biomass, except where such investments are financed subject to the following sustainability conditions:
- feedstock shall be from non-contaminated biomass or biogenic waste inside the EU, or certified for sustainability when sourced from outside the EU, and shall not consist of food and feed crops;
- forest feedstock certified according to international sustainable forest certification standards;
- no palm oil products or raw material from tropical forest and/or protected sites shall be used.
- Water desalination projects.
