The European Investment Bank (EIB) and the National Bank of Greece (NBG) are expanding their cooperation, with the aim of strengthening Greek businesses' access to financing and particularly supporting those investing in the security and defense sector.
The new financing package, totaling €250 million, is the first specifically targeted cooperation between the EIB and the National Bank in this particular sector. At the same time, it constitutes another step in the long-standing cooperation between the two organizations, which over the past five years has led to transactions totaling approximately €2.5 billion.
Through the new agreement, small and medium-sized enterprises (SMEs) and mid-cap companies (Mid-Caps) will be able to gain access to financing on more favorable terms, in order to implement new investments, develop their activities and strengthen their competitiveness.
At least half of the financing will be directed to eligible investments in the security and defense sector, where access to capital often remains more difficult, especially for smaller businesses.
The financing package consists of €200 million in EIB financing through a covered bond of the National Bank and an EIB guarantee of €50 million. The two transactions will allow the National Bank to channel additional financing to eligible businesses, both for the implementation of new investments and for covering working capital needs.
The €200 million financing constitutes a European first for the EIB, as it is the Bank's first transaction in the security and defense sector carried out through a covered bond. This is an established capital markets instrument, which in this case is being used as a new mechanism for channeling EIB financing to eligible investments in the security and defense sector.
At the same time, it is the EIB's first financing transaction through a covered bond with a Greek bank since 2019. The transaction secures long-term financing for the National Bank, contributes to the diversification of its funding sources and supports the further use of covered bonds in the Greek market.
The €50 million guarantee complements the financing package, as through it the EIB will assume part of the risk from new financing that the National Bank will grant to eligible mid-cap companies in the sector. In this way, the ability to finance businesses operating in a sector of strategic importance for Greece and Europe is expanded.
The EIB Vice-President Yannis Tsakiris stated: “Strengthening European security and defense comes through strengthening the businesses that have the ideas, the technology and the productive capacity to make a difference. With this agreement, we are giving more Greek businesses access to the financing they need to invest, innovate and grow. At the same time, this particular transaction constitutes a European first for the EIB and highlights the role that Greece can play in building a stronger, more competitive and more resilient European security and defense industry”.
The CEO of the National Bank Pavlos Mylonas noted: “This cooperation is fully aligned with Europe's goals of strengthening its security and defense and building greater strategic resilience. By directing financing with the support of the EIB to Greek small and medium-sized enterprises and mid-cap companies, we are helping innovative companies in a strategically vital sector to invest, grow and be competitive. The National Bank is proud to contribute to the broader European effort to strengthen the continent's defense industrial base, while at the same time deepening a long-standing and successful cooperation with the EIB”.