Bank of Ireland has been named as the first lender for the SBCI €500m Growth and Sustainability Loan Scheme.
The €500m Growth and Sustainability Loan Scheme (GSLS) will provide eligible SMEs, including farmers, fishers, and Small Mid-Caps with competitively priced loans of between €25,000 and €3m 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 scheme was launched through collaboration by the European Investment Fund, European Investment Bank, the Strategic Banking Corporation of Ireland and the Irish Government.
“SMEs are the main employer in the Irish economy, and have an important part to play in the transition to 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.
Transition to sustainability
This week Minister for Enterprise, Trade and Employment, Simon Coveney, TD, along with the Minister for Agriculture, Food and the Marine, Charlie McConalogue, TD, and Minister for Finance, Michael McGrath, TD, announced Bank of Ireland as the first lender to the market for the €500m 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.
“Long-term investments in sustainability measures are essential for Irish businesses ”
“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,” said the Finance Minister Michael McGrath, TD.
“This initiative will enable SMEs to access lending terms of up to 10 years, on loans ranging from €25,000 to €3m, 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 McGrath said.
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.
“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,” said Gavin Kelly, CEO Corporate and Commercial Banking, Bank of Ireland.
“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.”
“This Scheme will assist SMEs to make investments to enable them to underpin future business sustainability and growth,” Minister Coveney said. “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.”
Food for thought
It is understood that loans for climate action and environmental sustainability purposes will also benefit from an additional interest rate discount.
“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,” said Minister McConalogue.
“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.”
European Investment Bank representative in Ireland Kevin McKeon said the move will strengthen access to finance for businesses, farmers and fishers throughout Ireland.
“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.”
SCBI CEO June Butler added: “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.”
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.
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
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.