Funding Sources
During 2016, the SBCI secured two additional sources of long-term, lower cost funding to the total value of €450 million, from the Council of Europe Development Bank (CEB) and the NTMA. These new sources bolstered the three initial funding agreements that totalled €790 million, in place with the European Investment Bank (EIB), Kreditanstalt für Wiederaufbau (KfW) and the Ireland Strategic Investment Fund (ISIF). This brought the total funding to €1.2 billion at end-2016.
Council of Europe Development Bank - €200 million
The Council of Europe Development Bank was founded as a multilateral development bank in 1956 with an initial mandate for the repatriation of refugees, post World War II and to address the resulting resettlement and social issues. This mandate has broadened since to address emerging general social and environmental issues in Europe, including the provision of support to micro, small and medium sized enterprises with a view to both job preservation and job creation, through low cost funding and guarantee mechanisms. Ireland has been a member of the CEB since 2004.
Kreditanstalt fur Wiederaufbau - €150 million
KfW is the German state promotional bank, with a strong and respected brand in capital markets providing it with stable, low cost access to long-term financing. KfW’s primary mandate is to support and develop its own domestic retail, commercial and corporate base. KfW uses an on-lender model using local banks to deliver this mandate through its product range and enhancements to competition in the markets. Additionally, KfW also provides its longer term, lower cost funding to other EU States through their respective promotional institutions such as SBCI, to support their complementary mandates.
Ireland Strategic Investment Fund - €240 million
The ISIF was established in December 2014 to invest on a commercial basis in a manner designed to support economic activity and employment in Ireland. The assets of the National Pensions Reserve Fund (NPRF), the ISIF’s predecessor fund, transferred to the ISIF. Funding has been provided to the SBCI on foot of a direction from the Minister for Finance to the NPRF Commission. The ISIF funding is a ten-year revolving facility.
NTMA - €250 million
The NTMA is responsible for borrowing on behalf of the Government and managing the National Debt in order to ensure liquidity for the Exchequer and to minimise the interest burden over the medium term. The NTMA facility to the SBCI is in the form of a Guaranteed Notes Programme where NTMA will invest in Guaranteed Notes issued by the SBCI on agreed terms with a maximum ten-year maturity.
European Investment Bank - €400 million
The European Investment Bank is the European Union’s (EU) bank, supporting both credit and equity market failures across Europe. A key priority of the EIB’s mandate is to provide financing and enhance access to finance for the European Small and Medium Enterprise community. Provision of funding to the SBCI has been under this objective of SME financing support.
Equity Financing
In addition to the €10 million shares issued to the Minister for Finance on incorporation, the Minister subscribed for a further €25 million of SBCI share capital in February 2017. The additional capital raised will enable the SBCI to support its current activities, and the development and delivery of new products to support its mandate of improving access to finance in the Irish credit markets. The shares were paid for by conversion of a portion of the SBCI loan facility from the ISIF.