European Rules and Regulations relevant to SBCI products
Regulation
A number of European rules and regulations apply to certain SBCI products. These include EU laws governing State aid and products.
European Rules and Regulations relevant to SBCI products
The SBCI sources its funds from the Council of Europe Development Bank (CEB), the European Investment Bank (EIB), the Ireland Strategic Investment Fund (ISIF) and a Guarantee Notes Programme with the National Treasury Management Agency (NTMA). The Minister for Finance has provided a State guarantee in respect of borrowings received from the EIB. In addition, SBCI’s sole shareholder is the Minister for Finance, and SBCI therefore has economic, organisational and functional links with the State.
SBCI products may therefore contain an element of State aid and must comply with EU law governing State aid.
State aid can occur whenever State resources are used to provide assistance that gives certain entities, engaged in economic activity, an advantage over others by virtue of benefiting from those State resources. Generally, State aid is prohibited by the Treaty on the Functioning of the European Union. However, State aid may be given legally by using:
De Minimis Aid exemption under Commission Regulation (EU) No 2023/2831 of 13 December 2023 [1] (“De Minimis Regulation”)
The European Commission has determined that State aid given to undertakings which comply with the De Minimis Regulation has a negligible impact on trade and competition. State aid which remains below a certain ceiling, depending on sector, and otherwise complies with the De Minimis Regulation (De Minimis Aid) is not subject to notification to and approval by the European Commission. The maximum amount of de minimis aid any single recipient can receive is EUR 300,000 (gross grant equivalent) in the previous three years.
For loans, the amount of de minimis aid which is provided to a borrower (by means of a discounted interest rate) is calculated into its “gross grant equivalent” by taking the difference between the discounted interest rate and the reference interest rate prevailing at the time the aid is granted [2]. The de minimis aid is not equal to the total amount of the loan. Applicants for SBCI de minimis loans must be aware that such loans are provided to applicants subject to compliance with the De Minimis Regulation.
A Member State is required to have a mechanism to track De Minimis aid to ensure that the combined amount of De Minimis Aid payments from all sources to any single enterprise in any three year period does not exceed the EUR 300,000 limit. Therefore, applicants for SBCI de minimis loans are required to provide details of all other De Minimis Aid which has been granted to them or their company/organisation within the past three years, including De Minimis Aid granted under the European Commission Regulation on De Minimis Aid in the Agriculture Sector [3] and under the European Commission Regulation on De Minimis Aid in the Fisheries Sector [4].
If your company is part of a wider group of companies, please note that you must provide details of all previous De Minimis Aid within the past three years (applicable to the group) to include general De Minimis Aid, Fisheries De Minimis Aid and Agriculture De Minimis Aid. Please note that aid is cumulative – wherein if the group of companies has received previous aid in respect of Agriculture or Fisheries this must be taken into account in determining the group’s limit of EUR 300,000 under the general De Minimis Aid threshold.
Examples of sources of de minimis State aid include:
Exclusions
Please note the following activities are excluded from SBCI loans offered under the de minimis exemption:
(i) where the amount of the aid is fixed on the basis of the price or quantity of such products purchased from primary producers or put on the market by the undertakings concerned;
(ii) where the aid is conditional on being partly or entirely passed on to primary producers;
This is a summary of the State aid rules and applicants are advised to seek their own State aid advice and read the applicable provisions of the relevant Regulation. Please refer to Commission Regulation (EU) No 2023/2831 for full details on De Minimis State aid rules.
[1] Commission Regulation (EU) 2023/2831 of 13 December 2023 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid, OJ L 2023/2831, 15.12.2023, available here.
[2] The rate used is as specified in the Communication from the Commission on the revision of the method for setting the reference and discount rates, OJ C 14, 19.1.2008, p. 6, available here.
[3] Commission Regulation (EU) No 1408/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid in the agriculture sector, OJ L 352, 24.12.2013, p. 9, available here.
[4] Commission Regulation (EU) No 717/2014 of 27 June 2014 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid in the fishery and aquaculture sector, OJ L 190 28.6.2014, p. 45, available here.
[5] Regulation (EU) No 1379/2013 of the European Parliament and of the Council of 11 December 2013 on the common organisation of the markets in fishery and aquaculture products, amending Council Regulations (EC) No 1184/2006 and (EC) No 1224/2009 and repealing Council Regulation (EC) No 104/2000, OJ L 354, 28.12.2013, p. 1 available here.
[6] An SME is an enterprise which (i) employs less than 250 persons and (ii) whose annual turnover does not exceed EUR 50 million and/or whose annual balance sheet total does not exceed EUR 43 million. If a company is part of a group of companies, the employee, annual turnover and annual balance sheet limits apply to the group, and the group’s consolidated figures should be used to determine whether the enterprise can be classified as an SME or not.
A number of SBCI products and schemes will be offered under the de minimis aid exemption contained in the General De Minimis Aid Regulation (and also under the Agriculture and Fishery De Minimis Aid Regulations). In the event that de minimis aid is granted under one of these SBCI financing arrangements, the SBCI will confirm directly to the applicant the gross grant equivalent after drawdown of the funds.
The SBCI provides its products through its on-lending partners.
For further information on the De Minimis Aid Exemption please refer to General De Minimis Regulation, State aid for Agriculture De Minimis Regulation and State aid for Fishery De Minimis Regulation.
Agricultural Block Exemption Commission Regulation (EU) No 2022/2472 of 14 December 2022 (“ABER”)
1. Aid for investments in agricultural holdings linked to primary agricultural production shall be compatible with the internal market within the meaning of Article 107(3), point (c), of the Treaty and shall be exempted from the notification requirement of Article 108(3) thereof where it fulfils the conditions laid down in this Article and in Chapter I of this Regulation.
2. The investment may be carried out by one or more beneficiaries or concern a tangible asset or intangible asset used by one or more beneficiaries.
3. The investment shall pursue at least one of the following objectives:
(a) improvement of the overall performance and sustainability of the agricultural holding, in particular through a reduction of production costs or the improvement and re-deployment of production;
(b) improvement of the natural environment, hygiene conditions or animal welfare standards;
(c) creation and improvement of infrastructure related to the development, adaptation and modernisation of agriculture, including access to farm land, land consolidation and improvement, energy efficiency, the supply of sustainable energy and saving of water or energy;
(d) restoration of production potential damaged by natural disasters, adverse climatic events which can be assimilated to natural disasters, animal diseases and plant pests, protected animals and the prevention of damages caused by those events and factors; if the damage can be linked to climate change, beneficiaries shall, where appropriate, include in the restoration adaptation measures to climate change;
(e) contributing to climate change mitigation and adaptation, including by reducing greenhouse gas emissions and enhancing carbon sequestration, as well as promoting sustainable energy and energy efficiency;
(f) contributing to sustainable circular bioeconomy and fostering sustainable development and efficient management of natural resources such as water, soil and air, including by reducing chemical dependency;
(g) contributing to halting and reversing biodiversity loss, enhancing ecosystem services and preserving habitats and landscapes.
4. The investment may be linked to the production at farm-level of biofuels or of energy from renewable sources, provided that such production does not exceed the average annual consumption of fuels or energy of the given farm.
Where the investment is made for the production of biofuels, the production capacity of the production facilities shall be no more than the equivalent to the annual average fuel consumption of the agricultural holding and the produced biofuel shall not be sold on the market.
Where the investment is made for the production of thermal energy and electricity from renewable sources on agricultural holdings, the production facilities shall serve only the beneficiary’s own energy needs and their production capacity shall be no more than the equivalent to the combined average annual energy consumption of thermal energy and electricity on the agricultural holding, including the farm household. The selling of electricity into the grid shall only be allowed as far as the annual average self-consumption limit is respected.
Where the investment is carried out by more than one beneficiary with the purpose to serve their own biofuel and energy needs, the annual average consumption shall be accumulated to the amount equivalent to the average annual consumption of all beneficiaries.
Investments in renewable energy infrastructure that consume or produce energy shall comply with minimum standards for energy efficiency, where such standards exist at national level.
Investments in installations, the primary purpose of which is electricity production from biomass, shall not be eligible for aid unless a minimum percentage of heat energy, to be determined by the Member States, is utilised.
Member States shall establish thresholds for the maximum proportions of cereals and other starch rich crops, sugars and oil crops used for bioenergy production, including biofuels, for different types of installations in accordance with Article 26 of Directive (EU) 2018/2001. Aid to bioenergy investment projects shall be limited to bioenergy meeting the applicable sustainability criteria laid down in Union legislation.
5. For investment requiring an environmental impact assessment under Directive 2011/92/EU of the European Parliament and of the Council[1] the aid shall be subject to the condition that such assessment has been carried out and the development consent has been granted for the investment project concerned before the date of granting the individual aid.
6. The aid shall cover the following eligible costs:
(a) the costs for the construction, acquisition, including leasing, or improvement of immovable property, including investments in passive in-house wiring or structured cabling for data networks and, if necessary, the ancillary part of the passive network on the private property outside the building, with land purchased only being eligible to an extent not exceeding 10 % of the total eligible costs of the operation concerned;
(b) the purchase or lease purchase of machinery and equipment up to the market value of the asset;
(c) the general costs linked to the expenditure referred to in points (a) and (b), such as architect, engineer and consultation fees, fees relating to advice on environmental and economic sustainability, sustainable energy, energy efficiency and the production and use of renewable energy, including feasibility studies; feasibility studies shall remain eligible expenditure even where, based on their results, no expenditure under points (a) and (b) is incurred;
(d) the acquisition, development or usage fees of computer software, cloud and similar solutions, and the acquisition of patents, licences, copyrights and trademarks;
(e) expenses for non-productive investments linked to the specific environmental and climate-related objectives referred to in paragraph 3, points (e), (f) and (g);
(f) in the case of irrigation, the costs for investments that fulfil the following conditions:
(i) a river basin management plan, in accordance with Directive 2000/60/EC of the European Parliament and of the Council[2], has been notified to the Commission for the entire area in which the investment is to take place, as well as for any other areas where the environment might be affected by the investment; the measures taken under the river basin management plan in accordance with Article 11 of that Directive and of relevance to the agricultural sector shall be specified in the relevant programme of measures;
(ii) water metering enabling measurement of water use at the level of the supported investment is in place or shall be put in place as part of the investment;
(iii) an investment in an improvement of an existing irrigation installation or element of irrigation infrastructure shall be assessed ex ante for offering water savings reflecting the technical parameters of the existing installation or infrastructure;
(iv) if the investment affects bodies of ground- or surface water whose status has been identified as less than good in the relevant river basin management plan for reasons related to water quantity, or if state-of-the-art climate vulnerability and risk assessments determined[3] that the affected water bodies in good status could lose their status for reasons related to water quantity caused by climate change impacts, an effective reduction in water use must be achieved contributing to the achievement and maintenance of good status of those water bodies, as laid down in Article 4(1) of Directive 2000/60/EC. The conditions laid down in the previous sentence shall not apply to an investment in an existing installation which affects only energy efficiency or to an investment in the creation of a reservoir or to an investment in the use of recycled water which does not affect a body of ground or surface water;
(v) the Member State shall set percentages for potential water savings and effective reduction in water use as an eligibility conditions, to ensure that there is an effective reduction of the amount of water flowing through the equipment as compared to the 2014-2020 levels and therefore to avoid a regression in the level of environmental ambition:
— the percentage of potential water savings shall be at least 5 %, where the technical parameters of the existing installation or infrastructure already ensure a high degree of efficiency (prior to investment), and at least 25 %, where the current degree of efficiency is low and/or for investments that take place in areas where water savings are most needed to ensure the achievement of good water status;
— the percentage of effective reduction in water use shall be, at the level of the investment as a whole, at least 50 % of the potential water saving made possible by the investment in the existing irrigation installation or element of infrastructure;
— such water savings must reflect the needs set out in the river basin management plans emanating from the Directive 2000/60/EC;
(g) support may be granted to investments in the use of reclaimed water as an alternative water supply only if the provision and use of such water is compliant with Regulation No (EU) 2020/741 of the European Parliament and of the Council[4];
(h) in the case of investments aimed at the restoration of agricultural production potential damaged by natural disasters, adverse climatic events which can be assimilated to natural disasters, animal diseases, plant pests or protected animals, the eligible costs may include the costs incurred for restoring the agricultural production potential up to the level it was at before the occurrence of those events;
(i) in the case of investments aimed at the prevention of damage caused by natural disasters, adverse climatic events which can be assimilated to natural disasters, animal diseases, plant pests or protected animals, the eligible costs may include the costs of specific preventive actions.
7. Costs, other than those referred to in paragraph 6, points (a) and (b), connected with leasing contracts, such as lessor’s margin, interest refinancing costs, overheads and insurance charges shall not be considered to be eligible costs.
Working capital shall not be considered to be an eligible cost.
8. As regards irrigation, aid shall be paid only by Member States which ensure, in respect of the river basin district in which the investment takes place, a contribution of the different water uses to the recovery of the costs of water services by the agricultural sector consistent with Article 9(1), second subparagraph, first indent, of Directive 2000/60/EC having regard where appropriate, to the social, environmental and economic effects of the recovery as well as the geographic and climatic conditions of the region or regions affected.
9. Aid shall not be granted in respect of the following:
(a) the purchase of payment entitlements;
(b) the purchase and the planting of annual plants with exception of aid covering the costs referred to in paragraph 6, point (h);
(c) drainage works;
(d) the purchase of animals, with exception of aid covering the costs referred to in paragraph 6, point (h) and the purchase of guard dogs;
(e) wiring or cabling for data networks outside the private property.
10. The aid referred to in paragraph 1 shall not be granted in contravention of any prohibition or restriction laid down in Regulation (EU) No 1308/2013, even where such prohibitions and restrictions only refer to the Union support provided for in that Regulation.
11. The aid intensity shall not exceed 65 % of the eligible costs.
12. The aid intensity may be increased to a maximum of 80 % for the following investments:
(a) investments linked to one or more of the specific environmental- and climate-related objectives referred to in paragraph 3, points (e), (f) and (g), or to animal welfare;
(b) investments by young farmers;
(c) investments in the outermost regions or the smaller Aegean islands.
13. The aid intensity referred to in paragraph 12 point (c), may be increased to a maximum of 85 % for investments of small farms within the meaning of Article 28 of Regulation (EU) 2021/2115.
14. The aid intensity may be increased to a maximum of 100 % for the following investments:
(a) non-productive investments linked to the objectives referred to in paragraph 3, points (e), (f) and (g);
(b) investments for the restoration of production potential referred to in paragraph 3, point (d), and investments related to prevention and risk mitigation of damage caused by natural disasters, exceptional occurrences, adverse climatic events which can be assimilated to a natural disaster, or protected animals.
15. The aid intensity for irrigation under paragraph 6, point (f), shall be limited to one or more rates not exceeding:
(a) 80 % of the eligible costs for irrigation on-farm investments made under paragraph 6, point (f)(iii);
(b) 100 % of the eligible costs for investments in off-farm infrastructure in agriculture to be used for irrigation;
(c) 65 % of the eligible costs for other irrigation on-farm investments.
Notification thresholds
1. This Regulation shall not apply to any individual aid, the gross grant equivalent of which exceeds the following thresholds:
a) aid for investments in agricultural holdings linked to primary agricultural production as referred to in Article 14: EUR 600 000 per undertaking per investment project.
Definitions for aid for investments in agricultural holdings linked to primary agricultural production
Agricultural holding means a unit comprising of land, premises and facilities used for primary agricultural production.
Aid means any measure fulfilling all the criteria laid down in Article 107(1) of the Treaty.
Aid intensity means the gross aid amount expressed as a percentage of the eligible costs, before any deduction of tax or other charge.
Gross grant equivalent means the amount of the aid if it had been provided in the form of a grant to the beneficiary, before any deduction of tax or other charges.
Intangible assets means assets that do not have a physical or financial embodiment such as patents, licences, know-how or other intellectual property.
Non-productive investment means investment which does not lead to a significant increase in the value or profitability of the holding.
Primary agricultural production means the production of products of the soil and of stock farming, listed in Annex I to the Treaty, without performing any further operation changing the nature of such products.
Tangible assets means assets consisting of land, buildings and plant, machinery and equipment.
This is a summary of the State aid rules and applicants are advised to seek their own State aid advice and read the applicable provisions of the relevant Regulation.
[1] Directive 2011/92/EU of the European Parliament and of the Council of 13 December 2011 on the assessment of the effects of certain public and private projects on the environment (OJ L 26, 28.1.2012, p. 1).
[2] Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy (OJ L 327, 22.12.2000, p. 1).
[3] Technical guidance on the climate proofing of infrastructure in the period 2021-2027 (OJ C 373, 16.9.2021, p. 1).
[4] Regulation (EU) 2020/741 of the European Parliament and of the Council of 25 May 2020 on minimum requirements for water reuse (OJ L 177, 5.6.2020, p. 32).
Agricultural Block Exemption Commission Regulation (EU) No 2022/2472 of 14 December 2022 (“ABER”)
1. Aid for investments in connection with the processing or marketing of agricultural products shall be compatible with the internal market within the meaning of Article 107(3), point (c), of the Treaty and shall be exempted from the notification requirement of Article 108(3) thereof where it fulfils the conditions laid down in this Article and in Chapter I of this Regulation.
2. The investment shall concern tangible or intangible assets in connection with the processing of agricultural products or the marketing of agricultural products.
3. Investments in connection with the production of food based biofuels shall not be eligible for aid under this Article.
4. For investment requiring an environmental impact assessment under Directive 2011/92/EU the aid shall be subject to the condition that such assessment shall have been carried out and the development consent shall have been granted for the investment project concerned before the date of granting the individual aid.
5. The aid shall cover the following eligible costs:
(a) the construction, acquisition, including leasing, or improvement of immovable property, including investments in passive in-house wiring or structured cabling for data networks and, if necessary, the ancillary part of the passive network on the private property outside the building, with purchase of land only being eligible to an extent not exceeding 10 % of the total of the eligible costs of the operation concerned;
(b) the purchase or lease purchase of machinery and equipment up to the market value of the asset;
(c) general costs linked to expenditure referred to in points (a) and (b), such as architect, engineer and consultation fees, fees relating to advice on environmental and economic sustainability, including feasibility studies; feasibility studies shall remain eligible expenditure even where, based on their results, no expenditure under points (a) and (b) is incurred;
(d) acquisition, development or usage fees of computer software, cloud and similar solutions, and acquisitions of patents, licenses, copyrights, trademarks.
6. Costs, other than those referred to in paragraph 5, points (a) and (b), connected with leasing contracts, such as lessor’s margin, interest refinancing costs, overheads and insurance charges shall not be considered to be eligible costs.
7. Working capital shall not be considered to be an eligible cost.
8. Wiring or cabling for data networks outside the private property shall not be considered to be an eligible cost.
9. Aid shall not be granted in respect of investments to comply with Union standards in force.
10. The aid referred to in paragraph 1 shall not be granted in contravention of any prohibition or restriction laid down in Regulation (EU) No 1308/2013, even where such prohibitions and restrictions only refer to the Union support provided for in that regulation.
11. The aid intensity shall not exceed 65 %, except in the cases indicated in paragraph 12.
12. The aid intensity may be increased to a maximum of 80 % for the following investments:
(a) investments linked to one or more of the specific environmental- and climate-related objectives referred to in Article 14(3), points (e), (f) and (g), or to an improvement in animal welfare;
(b) investments by young farmers;
(c) investments in the outermost regions or the smaller Aegean islands.
Notification thresholds
1. This Regulation shall not apply to any individual aid, the gross grant equivalent of which exceeds the following thresholds:
(c) aid for investments in connection with the processing of agricultural products and the marketing of agricultural products as referred to in Article 17: EUR 7.5 million per undertaking per investment project.
Definitions for aid for investments in connection with the processing or the marketing of agricultural products
Marketing of agricultural products means holding or displaying with a view to sale, offering for sale, delivery or any other manner of placing on the market, except the first sale by a farmer to resellers or processors and any activity preparing a product for such first sale; a sale by a farmer to final consumers is considered as marketing of agricultural products if it takes place in separate premises or facilities reserved for that purpose.
Processing of agricultural products means any operation on an agricultural product resulting in a product which is also an agricultural product, except on-farm activities necessary for preparing an animal or plant product for first sale.
Union standard means mandatory standard laid down in Union legislation setting the level which individual undertakings must achieve, in particular as regards the environment, hygiene and animal welfare; however, standards or targets set at Union level which
Young farmer means a farmer as determined by a Member State in its CAP Strategic Plan in accordance with Article 4(6) of Regulation (EU) 2021/2115.
This is a summary of the State aid rules and applicants are advised to seek their own State aid advice and read the applicable provisions of the relevant Regulation.
General Block Exemption Commission Regulation (EU) No 651/2014 (“GBER”)
1. Investment aid to SMEs operating inside or outside the territory of the Union shall be compatible with the internal market within the meaning of Article 107(3) of the Treaty and shall be exempted from the notification requirement of Article 108(3) of the Treaty, provided that the conditions laid down in this Article and in Chapter I are fulfilled.
2. The eligible costs shall be one or several of the following:
(a) the costs of investment in tangible and intangible assets, including one-off non-amortizable costs linked directly to the investment and its initial installation;
(b) the estimated wage costs of employment directly created by the investment project, calculated over two years;
(c) a combination of part of the costs referred to in points (a) and (b) but not exceeding the amount of point (a) or (b), whichever is higher.
3. In order to be considered an eligible cost for the purposes of this Article, an investment shall consist of the following:
(a) an investment in tangible and intangible assets related to the setting-up of a new establishment; the extension of an existing establishment; the diversification of the output of an establishment into products or services not previously produced in or provided from the establishment; or a fundamental change in the overall production process of the product(s) or overall provision of the service(s) concerned by the investment in the establishment; or
(b) an acquisition of assets belonging to an establishment that has closed or would have closed had it not been purchased. Sole acquisition of the shares of an undertaking does not qualify as investment. The transaction shall take place under market conditions. In principle, only the costs of buying the assets from third parties unrelated to the buyer shall be taken into consideration.
However, if a member of the family of the original owner, or one or more employees, takes over a small enterprise, the condition that the assets shall be bought from third parties unrelated to the buyer does not apply.
A replacement investment thus does not constitute an investment in the meaning of this paragraph.
3a. Costs related to the lease of tangible assets may be taken into account under the following conditions:
(a) for land and buildings, the lease must continue for at least three years after the expected date of completion of the investment;
(b) for plant or machinery, the lease must take the form of financial leasing and must contain an obligation for the aid beneficiary to purchase the asset at the expiry of the term of the lease.
4. Intangible assets shall fulfil all of the following conditions:
(a) they shall be used exclusively in the establishment receiving the aid;
(b) they shall be amortisable;
(c) they shall be purchased under market conditions from third parties unrelated to the buyer;
(d) they shall be included in the assets of the undertaking that receives the aid for at least three
years.
5. Employment directly created by an investment project shall fulfil the following conditions:
(a) it shall be created within three years of completion of the investment;
(b) there shall be a net increase in the number of employees in the establishment concerned,
compared with the average over the previous 12 months;
(c) it shall be maintained during a minimum period of three years from the date the post was first
filled.
6. The aid intensity shall not exceed:
(a) 20 % of the eligible costs in the case of small enterprises;
(b) 10 % of the eligible costs in the case of medium-sized enterprises.
Article 4
Notification thresholds
This Regulation shall not apply to aid which exceeds the following thresholds:
(c) for investment aid to SMEs: EUR 8.25 million per undertaking per investment project;
Definitions for investment aid to SMEs
Aid means any measure fulfilling all the criteria laid down in Article 107(1) of the Treaty.
Small and medium-sized enterprises or SMEs means undertakings fulfilling the criteria laid down in Annex I.
Aid intensity means the gross aid amount expressed as a percentage of the eligible costs, before any deduction of tax or other charge.
Tangible assets means assets consisting of land, buildings and plant, machinery and equipment.
Intangible assets means assets that do not have a physical or financial embodiment such as patents, licences, know-how or other intellectual property.
Wage cost means the total amount actually payable by the beneficiary of the aid in respect of the employment concerned, comprising over a defined period of time the gross wage before tax and compulsory contributions such as social security, child care and parent care costs.
Net increase in the number of employees means a net increase in the number of employees in the establishment concerned compared to the average over a given period in time, after deducting from the number of jobs created any job losses during that period. The number of persons employed fulltime, part-time and seasonal has to be considered with their annual labour unit fractions.
Employment directly created by an investment project means employment concerning the activity to which the investment relates, including employment created following an increase in the utilisation rate of the capacity created by the investment.
General Block Exemption Commission Regulation (EU) No 651/2014 (“GBER”)
1. Aid for process and organisational innovation shall be compatible with the internal market within the meaning of Article 107(3) of the Treaty and shall be exempted from the notification requirement of Article 108(3) of the Treaty, provided the conditions laid down in this Article and in Chapter I are fulfilled.
2. Aid to large undertakings shall only be compatible if they effectively collaborate with SMEs in the aided activity and the collaborating SMEs incur at least 30 % of the total eligible costs.
3. The eligible costs shall be the following:
(a) personnel costs;
(b) costs of instruments, equipment, buildings and land to the extent and for the period used for the project;
(c) costs of contractual research, knowledge and patents bought or licensed from outside sources at arm's length conditions;
(d) additional overheads and other operating costs, including costs of materials, supplies and similar products, incurred directly as a result of the project.
4. The aid intensity shall not exceed 15 % of the eligible costs for large undertakings and 50 % of the eligible costs for SMEs.
Article 4
Notification thresholds
1. This Regulation shall not apply to aid which exceeds the following thresholds:
(m) for aid for process and organisational innovation: EUR 12.5 million per undertaking, per project;
Definitions for aid for research and development and innovation
Organisational innovation means the implementation of a new organisational method at the level of the undertaking (at group level in the given industry sector in the EEA), workplace organisation or external relations, including for instance by making use of novel or innovative digital technologies. Excluded from this definition are changes that are based on organisational methods already in use in the undertaking, changes in management strategy, mergers and acquisitions, ceasing to use a process, simple capital replacement or extension, changes resulting purely from changes in factor prices, customisation, localisation, regular, seasonal and other cyclical changes and trading of new or significantly improved products.
Process innovation means the implementation of a new or significantly improved production or delivery method, including significant changes in techniques, equipment or software, at the level of the undertaking (at group level in the given industry sector in the EEA), including for instance by making use of novel or innovative digital technologies or solutions. Excluded from this definition are minor changes or improvements, increases in production or service capabilities through the addition of manufacturing or logistical systems which are very similar to those already in use, ceasing to use a process, simple capital replacement or extension, changes resulting purely from changes in factor prices, customisation, localisation, regular, seasonal and other cyclical changes and trading of new or significantly improved products.
Personnel costs means the costs of researchers, technicians and other supporting staff to the extent employed on the relevant project or activity;
Effective collaboration means collaboration between at least two independent parties to exchange knowledge or technology, or to achieve a common objective based on the division of labour where the parties jointly define the scope of the collaborative project, contribute to its implementation and share its risks, as well as its results. One or several parties may bear the full costs of the project and thus relieve other parties of its financial risks. Contract research and provision of research services are not considered forms of collaboration.
This is a summary of the State aid rules and applicants are advised to seek their own State aid advice and read the applicable provisions of the relevant Regulation.
The Ukraine Credit Guarantee Scheme currently operates under the EU “Temporary Crisis Framework” (TCF) for State aid measures to support the economy following the outbreak of the conflict in Ukraine.
Eligible Loan Purposes
Participating enterprises must self-declare that the loan is being sought specifically as a result of difficulties being experienced due to the Ukraine war and meet the specific criteria as set out in this section.
The finance must be used for one or both of the following purposes:
As part of the finance agreement application, the SME/ Small Mid-Cap must sign a declaration (which is subject to audit) that they meet the eligibility criteria and the State aid rules applying.
Loans cannot be used for: -
Loan Amount Criteria
The overall amount of guaranteed Loans granted under UCGS per borrower shall not exceed:
i. 15% of the beneficiary’s average total annual turnover over the last three closed accounting periods[1]; or
ii. 50% of energy costs over the 12 months preceding the month when the application for aid is submitted[2]; or
iii. (1) in relation to a participating enterprise that is a Microenterprise and (2) where such Microenterprise does not have the requisite financial information available or does not have the requisite financial information available in the form required, an amount equal to the amount required to cover the liquidity needs of the participating enterprise from the date on which the terms of a loan agreement becomes binding on an On-Lender for the following 12 months, and provided always that such liquidity needs have not been financed by any other measure taken in reliance on the applicable State aid framework or on any of the following measures:
(A) The Credit Guarantee Scheme;
(B) The Covid-19 Credit Guarantee Scheme;
(C) The Temporary Framework for State Aid Measures to Support the Economy in the Current Covid-19 outbreak;
(D) The Brexit Impact Loan Scheme;
(E) The European Guarantee Fund (the “EGF”); or
(F) Any national guarantee scheme or loan scheme operated under:
or
up to €1,000,000
Criterion (iii) is to be used only on an exceptional basis and only in relation to Microenterprises. It is expected that On-Lenders should be able to determine loan amounts based on criteria (i) and (ii).
[1] When the borrower is a newly established enterprise that does not hold three closed annual accounts, the applicable point provided by criterion (i) will be calculated based on the enterprise’s duration of existence at the moment of the loan application.
[2] When the borrower has not been in existence long enough to have 12 months’ trading history, its energy costs for this purpose will be calculated based on the duration of its existence at the moment of the loan application.
The Agriculture Investment Loans supported by the SBCI are subject to the provisions of the Agriculture Investment Loan Scheme 2023. This scheme has been published by the SBCI in conjunction with the Department of Agriculture under Commission Regulation (EU) No.2022/2472, which declares that certain categories of aid in the agricultural sector are compatible with the internal market and permissible under this EU Regulation by means of a block exemption. The Agriculture Investment Loan Scheme operates within the State aid rules by virtue of this block exemption.
Full details of the Regulation can be found at Commission Regulation (EU) No.2022/2472.
The SBCI provides its products through its on-lending partners.
A scheme to provide discounted loans and credit facilities to agricultural SMEs in Ireland
The objective of this scheme is to provide investment aid in the form of discounted loans and credit facilities to SMEs involved in the agricultural sector. Funding for the Scheme will be provided by the Strategic Banking Corporation of Ireland (“SBCI”) through third party banks and credit institutions (“on-lenders”)1. The SBCI is a company that is wholly owned by the Minister for Finance of Ireland. SBCI funding under this Scheme meets the criteria laid down in Article 107(1) of the Treaty; SBCI is competent to provide aid in accordance with Commission Regulation (EU) No.2022/2472.
The operation of this scheme is subject to the provisions of Commission Regulation (EU) No 2022/2472 of 14 December 20222 and in particular Chapter III, Section 1 (Articles 14 and 17) (the “Regulation”) and the enabling legislation of the Strategic Banking Corporation of Ireland (“SBCI”) the Strategic Corporation of Ireland Act 2014, as may be amended from time to time). Unless otherwise stated, terms defined in the Regulation shall have the same meaning in this Scheme.
The average annual budget of this Scheme shall not exceed EUR 150 million.
Loan applicants must be micro, small and medium sized enterprises (“SMEs”) as defined in in Commission Recommendation 2003/361/EC3.Loan applicants must be active in the agricultural sector, namely primary agricultural production, the processing of agricultural products or the marketing of agricultural products.
Loan applicants will be eligible to apply for loans once the project concerned meets the criteria set out below. The right to apply does not impose any obligation on an on-lending institution to provide funding to an applicant.
1 Loan applicants may select any on-lender for an SBCI loan. On-lenders are banks and other financial institutions that have applied to the SBCI to act as on-lenders, subject to the SBCI’s lending requirements.
Commission Regulation (EU) 2022/2472 of 14 December 2022 declaring certain categories of aid in the agricultural and forestry sectors and in rural areas compatible with the internal market in application of Articles 107 and 108 of the Treaty on the Functioning of the European Union (Text with EEA relevance) “..
3 Commission Recommendation 2003/361/EC concerning the definition of micro, small and medium-sized enterprises (OJ L 124, 20.5.2003, p. 36).
Loans may be advanced to support investments in tangible assets or intangible assets on agricultural holdings linked to primary agricultural production or in connection with the processing of agricultural products and the marketing of agricultural products.
Where the loan is to support investments in tangible assets or intangible assets on agricultural holdings linked to primary agricultural production, the investment should pursue at least one of the following objectives:
1. The improvement of the overall performance and sustainability of the agricultural holding4, in particular through a reduction of production costs or the improvement and re-deployment of production;
2. The improvement of the natural environment, hygiene conditions or animal welfare standards;
3. The creation and improvement of infrastructure related to the development, adaptation and modernisation of agriculture, including access to farmland, land consolidation and improvement, energy efficiency, the supply of sustainable energy and saving of energy or water;
4. The restoration of production potential damaged by natural disasters, adverse climatic events which can be assimilated to natural disasters, animal diseases and plant pests, protected animals and the prevention of damages caused by those events and factors; if the damage can be linked to climate change, beneficiaries shall, where appropriate, include in the restoration adaptation measures to climate change;
5. Contributing to climate change mitigation and adaptation, including by reducing greenhouse gas emissions and enhancing carbon sequestration, as well as promoting sustainable energy and energy efficiency;
6. Contributing to sustainable circular bioeconomy and fostering sustainable development and efficient management of natural resources such as water, soil and air, including by reducing chemical dependency; or
7. Contributing to halting and reversing biodiversity loss, enhancing ecosystem services and preserving habitats and landscapes
Investments shall be in conformity with EU legislation and with Irish law on environmental protection under the Protection of the Environment Act 2003. For investment requiring an environmental impact assessment under Directive 2011/92/EU the aid shall be subject to the condition that such assessment shall have been carried out and the development consent shall have been granted for the investment project concerned before the date of granting the individual aid.
This Scheme shall not apply to the following: -
a) Loans to support export related activities towards third countries or other EU Member States, namely aid directly linked to the quantities exported, to the establishment and operation of a distribution network or to the other current expenditure linked to export activity;
b) Loans contingent upon the use of domestic over imported goods;
4 ‘agricultural holding’ means a unit comprising of land, premises and facilities used for primary agricultural production.
c) Loans to an undertaking which is subject to an outstanding recovery order following a previous Commission Decision declaring an aid illegal and incompatible with the internal market;
d) Loans to undertakings in difficulty;
e) Loans to support the purchase of payment entitlements
f) Loans to support the purchase and planting of annual plants;
g) Loans to support drainage works
h) Loans to support wiring or cabling for data networks outside the private property; and
i) Loans to support the purchase of animals.
Investments which are linked to the production on farm-level of biofuels or energy from renewable sources are permitted provided production is limited to the average annual consumption of fuel or energy of the farm. Investments in installations, the primary purpose of which is energy production from biomass, shall not be eligible unless a minimum percentage of heat energy is utilised. Investments in connection with the production of food-based biofuels are ineligible.
The maximum amounts of aid that may be generated through the form of discounted interest rates on loans supporting investment under the Scheme are:
• €600,000 per undertaking per investment project on agricultural holdings linked to primary agricultural production.
• €7.5 million per undertaking per investment project in connection with the processing of agricultural products and the marketing of agricultural products.
These limits shall not be circumvented by artificially splitting up an aid project.
Only transparent forms of aid (i.e. in which it is possible to calculate precisely the gross grant equivalent as a percentage of eligible expenditure ex ante without need to undertake a risk assessment) may be provided under this Scheme.
This Scheme shall apply only to aid which has an incentive effect.
Aid shall be considered to have an incentive effect if the beneficiary has submitted a written loan application for the aid to the SBCI or its on-lenders / agents before work on the project or activity starts. The loan application shall contain at least the following information:
(a) undertaking's name and size;
(b) description of the project, including its start and end dates;
(c) location of the project;
(d) list of project costs;
(e) the loan amount / amount of public funding needed for the project/ activity; and
(f) declaration of any other Aid obtained for the specific project.
If work begins before the applicant has submitted a written application to the relevant development agency the whole project will be ineligible for aid.
The aid shall cover the following eligible costs:
a) the construction, acquisition, including leasing, or improvement of immovable property, including investments in passive in-house wiring or structured cabling for data networks and, if necessary, the ancillary part of the passive network on the private property outside the building, with land purchase only being eligible to an extent not exceeding 10% of the total eligible costs of the operation concerned;
b) the purchase or lease purchase of machinery and equipment up to the market value of the asset;
c) the general costs linked to expenditure referred to in points a) and b) listed above, such as architect, engineer and consultation fees, fees relating to advice on environmental and economic sustainability, sustainable energy, energy efficiency and the production and use of renewable energy, including feasibility studies; feasibility studies shall remain eligible expenditure even where, based on their results, no expenditure under the categories listed above is incurred;
d) the acquisition, development or usage fees of computer software, cloud and similar solutions and acquisitions of patents, licenses, copyrights, and trademarks;
e) Expenses for non-productive investments linked to the specific environmental and climate-related objectives referred to in section 5 (e) (f) (g) above;
f) In the case of irrigation, the costs for investments that fulfil certain detailed conditions (see ABER 14).
g) In the case of investments aimed at the restoration of agricultural production potential damaged by natural disasters, adverse climatic events which can be assimilated to natural disasters, animal diseases, plant pests or protected animals, the eligible costs may include the costs incurred for restoring the agricultural production potential up to the level it was at before the occurrence of those events.
h) In the case of investments aimed at the prevention of damages caused by natural disasters, adverse climatic events which can be assimilated to natural disasters, animal diseases, plant pests or protected animals, the eligible costs may include the costs of specific preventive actions.
Costs, other than those referred to in paragraph (a) and (b), connected with leasing contracts, such as lessor's margin, interest refinancing costs, overheads and insurance charges shall not be considered to be eligible costs.
Working capital shall not be considered to be an eligible cost.
VAT shall not be considered an eligible cost (except where it is non-recoverable under Irish law).
The aid intensity or total Aid resulting from the loan shall not exceed 65 % of the amount of the eligible costs.
For the purposes of calculating aid intensity and eligible costs under this Scheme, all figures used shall be taken before any deduction of tax or other charge. The eligible costs shall be supported by documentary evidence which shall be clear, specific and contemporary.
Aid provided in the form of a discounted loan shall be discounted to its value at the moment it is granted. The eligible costs shall be discounted to their value at the moment the aid is granted. The interest rate to be used for discounting purposes shall be the discount rate applicable at the moment the aid is granted.
Aid under this Scheme shall not be cumulated with any de minimis aid in respect of the same eligible costs if such cumulation would result in an aid intensity exceeding those laid down in the Regulation.
The information referred to in Appendix 1 to this Scheme will be published on the Strategic Banking Corporation of Ireland’s State Aid Website on each individual aid award where they exceed the following:
(i) €10,000 for beneficiaries active in the primary agricultural production;
(ii) €100,000 for beneficiaries active in the sectors of the processing of agricultural products and the marketing of agricultural products.
This scheme shall operate from 1 November 2023 until 31 October 2028.
Appendix 1 – Information to be published for Aid awards exceeding the relevant thresholds.
Information shall be published in a spread sheet data format, which allows data to be searched, extracted and easily published on the Internet, such as CSV or XML format. Access to the State aid website shall be allowed to any interested party without restrictions. No prior user registration shall be required to access the State aid website.
The following information on individual aid award shall be published:
a. Reference of the identification number of the aid;
b. Name of the beneficiary or beneficiary’s identifier;
c. Type of enterprise (SME/large) at the date of granting the aid;
d. Region in which the beneficiary is located, at NUTS level II;
e. Sector of activity at NACE group level;
f. Aid element, expressed as full amount in national currency;
g. Aid instrument - Interest rate subsidy
h. Date of granting the aid;
i. Objective of the aid – investment.
j. Granting authority - SBCI
Eligibility
The borrower must comply with the following:
The Borrower must confirm to the bank that it satisfies one of the following conditions:
As at the date of the letter of sanction entered into by the customer in relation to the facility in question, it must accept that it satisfies the eligibility criteria for the scheme and that it undertakes that it shall at all times comply with those eligibility criteria.
The loan received by the customer is exclusively for working capital purposes.
Details to be Published
The Department of Agriculture, Food and the Marine and the SBCI will comply with the reporting requirements as set out in Commission Delegated Regulation (EU) 2016/1613 in respect of loans to livestock and dairy farmers, and with de minimis state aid reporting requirements in respect of loans to other farmers.
Data Protection
The rights of data subjects and how they may be exercised are laid down in the Data Protection Acts, 1988 and 2003. The Office of the Data Protection Commissioner publishes a guide to your rights as a data subject.
For further information about Data Protection, click here.
Publication of CAP Beneficiaries Data
In accordance with EU Regulation 1306/2013, the Department of Agriculture, Food and the Marine is obliged to ensure annual ex-post publication of all of the beneficiaries of CAP funding, both legal and non-legal persons.
Further information is available on the Department of Agriculture, Food and the Marine website: www.agriculture.gov.ie
The State aid amount for a loan is arrived at by selecting the term of the loan in years (horizontal blue axis) and the value of the loan in Euro (vertical yellow axis) in the State Aid Matrix below. Where the term and/or loan amount(s) falls between two values the higher figure(s) should be selected. This is illustrated in the following example of a loan of €41,000 for 4.5 years:
See the State Aid Matrix (indicative) for further details*.
*Source: SBCI.
Note: The State Aid Matrix provided is for indicative purposes only.
The SBCI offers certain Scheme loans to enterprises active in the primary production of agricultural products under the Agriculture De Minimis Aid exemption contained in Commission Regulation (EU) 1407/2013[1]. This Regulation provides that small amounts of State aid are regarded as too small to significantly affect trade or competition in the internal market. Such amounts are regarded as falling outside the category of State aid that is banned by the Treaty on the Functioning of the European Union and may be awarded by the SBCI without notification to the and approval by the European Commission. A Member State is required to have a mechanism to track such aid (called “De Minimis Aid”) to ensure that the combined amount of De Minimis Aid payments from all sources to any single enterprise active in the production of agricultural products in any three rolling fiscal-year period does not exceed the EUR 20,000 limit. Therefore, you are required to provide details of all other De Minimis Aid which has been granted to you or your company/organization within the past three fiscal years, including De Minimis Aid granted under the European Commission Regulation on De Minimis Aid[2] and under the European Commission Regulation on De Minimis Aid in the Fisheries Sector.[3]
If your company is part of a wider group of companies please note that you must provide details of all previous De Minimis Aid within the past three fiscal years (applicable to the group) to include general De Minimis Aid, Fisheries De Minimis Aid and Agriculture De Minimis Aid. Please note that aid is cumulative – wherein if the group of companies has received previous aid in respect of Agriculture this must be taken into account in determining the group’s limit of 30,000 in respect of Fisheries and both Agriculture and Fisheries aid must be cumulated in determining the group’s limit of 200,000 under the general De Minimis Aid threshold.
Rules applying to Agriculture De Minimis State aid:
Exclusions
Certain types of aid are ineligible as de minimis aid:
Please refer to Commission Regulation (EU) No 1408/2013 for comprehensive details on specific exclusions.
[1] Commission Regulation (EU) No 1408/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid in the agriculture sector, available here
[2] Commission Regulation (EU) No 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid, available here.
[3] Commission Regulation (EU) No 875/2007 of 24 July 2007 on the application of Articles 87 and 88 of the EC Treaty to de minimis aid in the fisheries sector, available here.
[4] An SME is an enterprise which (i) employs less than 250 persons and (ii) whose annual turnover does not exceed EUR 50 million and/or whose annual balance sheet total does not exceed EUR 43 million. If a company is part of a group of companies, the employee, annual turnover and annual balance sheet limits apply to the group, and the group’s consolidated figures should be used to determine whether the enterprise can be classified as an SME or not.
The SBCI offers certain Scheme loans to enterprises active in the primary production of fishery and aquaculture products under the Fisheries De Minimis aid exemption contained in Commission Regulation (EU) 875/2007.[1] This Regulation provides that small amounts of State aid are regarded as too small to significantly affect trade or competition in the internal market. Such amounts are regarded as falling outside the category of State aid that is banned by the Treaty on the Functioning of the European Union and may be awarded by the SBCI without notification to the and approval by the European Commission. A Member State is required to have a mechanism to track such aid (called “De Minimis Aid”) to ensure that the combined amount of De Minimis Aid payments from all sources to any single enterprise active in fisheries in any three rolling fiscal-year period does not exceed the EUR 30,000 limit. Therefore, you are required to provide details of all other De Minimis Aid which has been granted to you or your company/organization within the past three fiscal years, including De Minimis Aid granted under the European Commission Regulation on De Minimis Aid[2] and under the European Commission Regulation on De Minimis Aid in the Agriculture Sector.[3]
If your company is part of a wider group of companies please note that you must provide details of all previous De Minimis Aid within the past three fiscal years (applicable to the group) to include general De Minimis Aid, Fisheries De Minimis Aid and Agricultural De Minimis Aid. Please note that aid is cumulative – wherein if the group of companies has received previous aid in respect of Agriculture this must be taken into account in determining the group’s limit of 30,000 in respect of Fisheries and both Agriculture and Fisheries aid must be cumulated in determining the group’s limit of 200,000 under the general De Minimis Aid threshold.
Rules applying to Fisheries De Minimis State aid:
Exclusions
Certain types of aid are ineligible as de minimis aid:
Please refer to Commission Regulation (EU) 875/2007 for comprehensive details on specific exclusions.
[1] Commission Regulation (EU) No 875/2007 of 24 July 2007 on the application of Articles 87 and 88 of the EC Treaty to de minimis aid in the fisheries sector, available here.
[2] Commission Regulation (EU) No 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid, available here.
[3] Commission Regulation (EU) No 1408/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid in the agriculture sector, available here
[4]An SME is an enterprise which (i) employs less than 250 persons and (ii) whose annual turnover does not exceed EUR 50 million and/or whose annual balance sheet total does not exceed EUR 43 million. If a company is part of a group of companies, the employee, annual turnover and annual balance sheet limits apply to the group, and the group’s consolidated figures should be used to determine whether the enterprise can be classified as an SME or not.
[5] Regulation (EU) 2021/1139 of the European Parliament and of the Council of 7 July 2021 establishing the European Maritime, Fisheries and Aquaculture Fund and amending Regulation (EU) 2017/1004 (OJ L 247, 13.7.2021, p. 1); available here.