Ministers Coveney, McGrath and McConalogue announce first lender to the market for
€500m Growth and Sustainability Loan Scheme
Tuesday 19th September 2023
Minister for Enterprise, Trade and Employment, Simon Coveney, along with the Minister for Agriculture, Food and the Marine, Charlie McConalogue, and Minister for Finance, Michael McGrath, have announced Bank of Ireland as the first lender to the market for the €500 million Growth and Sustainability Loan Scheme. A number of other lenders, including non-bank lenders, are expected to take part in the Scheme in the coming time.
The Scheme will provide eligible SMEs, including farmers, fishers, and Small Mid-Caps with competitively priced loans of between €25k and €3 million for terms of up to ten years, with loans of up to €500k available unsecured, when investing in the growth and resilience of their business, and/or contribute to climate action and environmental sustainability.
The Loan Scheme will target a minimum of 30% of the lending volume for environmental sustainability purposes with the aim of encouraging SMEs to take positive actions in support of the climate change agenda. Up to 70% of lending will be for strategic investments with a view to increasing productivity and competitiveness and thus underpinning future business sustainability and growth.
Bank of Ireland will launch the Scheme in two phases, with climate action and environmental sustainability loan applications to be prioritised initially. It is expected that loans for general long-term investment under the second phase will be available from December 2023.
Loans for climate action and environmental sustainability purposes will also benefit from an additional interest rate discount.
Minister for Enterprise, Trade and Employment, Simon Coveney, T.D, said:
“This Scheme will assist SMEs to make investments to enable them to underpin future business sustainability and growth. More and more, sustainability has become increasingly critical to Irish businesses to remain productive and competitive, and it is good that at least 30% of the lending to SMEs will be targeted in this area.
I welcome Bank of Ireland’s participation in the Growth and Sustainability Loan Scheme and I look forward to the participation of a number of other lenders and financial institutions in the coming weeks.”
Minister for Finance, Michael McGrath TD, said:
“SMEs are the main employer in the Irish economy, and have an important part to play in the transition to environmental sustainability.
I welcome that a minimum of 30% of the Growth and Sustainability Loan Scheme’s €500 million lending volume will relate to investment in environmental sustainability, with preferential interest rates to support investments contributing to the green and sustainable transformation of the Irish economy.
This initiative will enable SMEs to access lending terms of up to 10 years, on loans ranging from €25,000 to €3 million, with amounts of up to €500,000 available on an unsecured basis.
I welcome Bank of Ireland’s participation as an on-lender in this sustainability element of the Growth and Sustainability Loan Scheme, under the SBCI’s on-lending partnership arrangements for risk-sharing schemes”.
Minister for Agriculture, Charlie McConalogue TD, said:
“I welcome the launch of the €500m Growth and Sustainability Loan Scheme today with Bank of Ireland, the first of several lenders going to market, continuing our successful collaboration with the European Investment Bank and building on the successful deployment by the SBCI of the Future Growth Loan Scheme.
The agri-food sector has shown its ability to adapt to the various challenges in recent years and it is important that we continue to provide the necessary support to assist investment, including in climate action and environmental sustainability initiatives, delivering on our Food Vision 2030 ambitions.
I was pleased to ensure that the GSLS will be available to farmers, fishers, foresters, and food businesses, including the seafood sector. This is a viable source of finance for young, new entrant farmers and smaller-scale farmers; those who do not have high levels of security.
Food companies have identified long-term investment finance of up to ten years as a critical need which is otherwise unavailable in Ireland. I am pleased that the Government has been able to deliver this product and its effects will be felt all along the food production chain from primary producer to processor.
I am confident this initiative will play a crucial role in assisting the agri-food sector and businesses generally in achieving both economic and environmental sustainability.”
Kevin McKeon, European Investment Bank Group representative in Ireland, said:
“The European Investment Bank Group is pleased to strengthen access to finance by business, farmers, and fishing across Ireland through the new Growth and Sustainability Fund. The close cooperation between the EIB, EIF, SBCI and Irish government has enabled this new fund to be launched that specifically addresses financing challenges holding back business investment.”
June Butler, SBCI CEO said:
“Long-term investments in sustainability measures are essential for Irish businesses as they can deliver reductions in their carbon emissions, along with significant cost savings. Sustainability initiatives can also improve customer engagement, drive long-term growth, and stimulate innovation, making them a smart and responsible choice from a business perspective.
Irish businesses, including farmers and fishers, prioritising sustainable investments and climate action initiatives, can now access long-term lower cost funding under the Growth and Sustainability Loan Scheme. I welcome today’s announcement of Bank of Ireland’s participation in the Growth and Sustainability Loan Scheme.”
Gavin Kelly, CEO Corporate and Commercial Banking, Bank of Ireland said:
“Bank of Ireland is delighted to be the first Irish bank to make the SBCI Growth and Sustainability Loan Scheme available to our customers, another step in supporting them to make the transition to net-zero.
The new Scheme will provide SMEs with low-cost longer term finance options that will enable them to develop and deploy low-carbon technologies as part of their operations, and it also clearly aligns with Bank of Ireland’s own commitment to help accelerate the shift to a low carbon economy.
Bank of Ireland and the SBCI have successfully worked together on bringing a number of loan schemes to market in recent years, and I would encourage all SMEs to review the details of this new Scheme to see how they can avail of it in order achieve their own sustainability targets.”
For more information and how to apply visit: Growth and Sustainability Loan Scheme - DETE (enterprise.gov.ie)
Ends
Notes for Editors
Key features of the Scheme:
- Loans from €25,000 to €3,000,000.
- Repayment terms from 7 to 10 years.
- Loans unsecured up to €500,000.
- Competitive interest rates.
- Available until 30 June 2026 (or earlier if fully subscribed).
Loans for Climate Action and Environmental Sustainability
These loans are for long-term investment towards climate action and environmental sustainability.
Businesses wishing to invest in climate action and environmental sustainability may be categorised as one of the following:
- Investment in green/sustainable measures
- Any investment by SMEs classified as a Green / Sustainable Enterprise
- Any investment by farmers classified as a holder of a Sustainable Enterprise / Green Eco Label
The Scheme is open for a broad range of investments that can qualify for eligibility as investment in green/sustainable measures. These include but are not limited to:
- Building upgrades and renovations
- Roof and wall insulation
- Replacement windows
- Replacement of existing lighting with energy efficient LEDs
- Electric vehicles and, electric vehicle charging points
- Manufacturing of energy efficient equipment
- Manufacturing of renewable energy equipment
- Minimum tillage equipment
- Tractor and harvester replacement
- Agriculture building renovation or upgrade
Qualifying climate action and environmentally sustainable loans will receive a discounted interest rate when compared to equivalent loans.
For a full breakdown of criteria and more information on how to apply for the Scheme please visit www.sbci.gov.ie.
Loans for Growth
These loans are for long-term investments towards the growth or resilience of the enterprise.
Loans will be allowed – subject to certain conditions - for, but not limited to, the following purposes:
- Investments in tangible or intangible assets
- Machinery or equipment
- Research and development
- Business expansion
- Premises improvement
For a full breakdown of criteria and more information on how to apply for the Scheme please visit www.sbci.gov.ie.
How to apply:
The first step to apply for the Growth and Sustainability Loan Scheme is to submit an eligibility application online through the SBCI Hub.
Interested businesses should visit the SBCI website at www.sbci.gov.ie for further details and information.
About EIF
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.
About the Strategic Banking Corporation of Ireland (SBCI):
The Strategic Banking Corporation of Ireland (SBCI) was set up by the Department of Finance in September 2014 to ensure that SMEs in Ireland have access to stable, lower-cost, long-term funding options. By supporting and helping to develop an effective credit market for SME finance, the SBCI ensures that it is easier for SMEs to get the finance they need to prosper and build economic activity in Ireland.