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Institution for Growth in Greece (IfG): Establishment of the first sub-fund
Frankfurt (ots) -
- The first of three planned sub-funds was established on 7 May 2014 in Luxembourg - Greece and KfW are to each provide financing of EUR 100 million - IfG will distribute the funds to small and medium-sized enterprises (SMEs) in Greece with the help of accredited Greek banks - Key objective is to provide Greek SMEs with improved access to investment loans and working capital to help foster economic growth
The first of three planned IfG sub-funds was founded on 7 May 2014 in Luxembourg. The Hellenic Republic and KfW - on behalf of the German Federal Government - will each contribute EUR 100 million in funding debt to this sub-fund. These funds will be lent to small and medium-sized enterprises in Greece in the form of loans from Greek on-lending banks. The IfG will thus make it easier for Greek SMEs to access investment loans and working capital, thereby contributing towards the recovery of the Greek economy.
The Greek Minister of Finance Yannis Stournaras, the Greek Minister of Development and Competitiveness Kostis Hatzidakis and the Chief Executive Officer of KfW Dr Ulrich Schröder are meeting today in Athens to officially give the project the "green light" and to discuss how to best implement the agreed measures.
The establishment of the first sub-fund is an important milestone; it is a key prerequisite for the start of the operational phase of this project, which is supported by the German Federal Ministry of Finance.
In the first round of discussions, various Greek banks were informed of the project and of their potential role as sales partners.
The next steps now involve the conclusion of contracts between IfG and Greek on-lending banks, as well as the commencement of business activity in the third quarter of 2014.
About the Institution for Growth (IfG)
In May 2012, a European working party was appointed to develop a concept for the foundation of an institute to promote the Greek economy. The working party includes representatives of the European Investment Bank, the European Commission, the French Ministry for Finance and KfW.
In February 2013, the Greek Minister of Development and Competitiveness Kostis Hatzidakis approved the proposed concept for an IfG umbrella fund with three different sub-funds to be founded according to their specific promotional purpose: one sub-fund that will provide borrowed funds to Greek SMEs, one sub-fund that will provide equity capital to Greek SMEs and one sub-fund for financing infrastructure projects.
As part of a delegation trip by Federal Minister Dr Schäuble to Athens in July 2013, a memorandum of understanding was signed to implement the first sub-fund (borrowed funds for small and medium-sized companies).