EIB ready to support ‘dual-use’ technologies and defense SMEs

Brussels – The EIB for defense is beginning to take shape.  As requested by EU leaders, the European Investment Bank will revise its scope by updating the definition of dual-use civilian and military technology in order to provide more loans to support small and medium-sized enterprises in the sector. The Ecofin announced the decision at a meeting in Luxembourg, paving the way for a new paradigm.

The EIB cannot finance the defense sector, with the key being the ‘dual-use’ concept. All civilian-use assets and infrastructure that can be converted to non-civil use (such as valves, pumps, calculators, electronic materials, sensors and lasers, avionics, shipbuilding, aerospace, machinery, vehicles, chemicals, metals, and electrical equipment) can be supported even more from now on. As of May 1 a task force and a ‘one-stop shop’ will be set up to streamline EIB Group processes and speed up investment and access to the €6 billion earmarked for projects in this sector.

At the same time, the EIB will update its rules for financing SMEs in the security and defense sector. “This will open up dedicated credit lines for a large number of small businesses and innovative startups, which need financing for dual-use projects,” pointed out the Luxembourg-based lending institution, on which one begins to think in terms of greater firepower and, therefore, liquidity.

It may be necessary to provide more resources to support all these new initiatives without burdening the EIB’s financial strength and, thereby, its AAA rating. Italy is in favor of this approach. “We do not exclude a recapitalization of the EIB,” Economy Minister Giancarlo Giorgetti said at the end of the Ecofin proceedings. “But there are a lot of us who have to decide,” he adds, hinting that consensus is needed among all Member States, who are the shareholders of the EIB.

In essence, a decision is premature. But the issue arises, and “it will be discussed in June” at the summit of heads of state and government, the Treasury Minster said. On that occasion, the President of the EIB, Nadia Calviño, will present to leaders a plan to “rationalize the use of resources for defense,” Giorgetti explained to the press.