Business News

SID Providing Additional EUR 250M for Slovenian Businesses (adds)

Ljubljana, 10 December (STA) - The SID export and development bank announced on Thursday it would start providing the Slovenian businesses with another EUR 250m in loans as of next week. The money will be channeled through commercial banks, SID bank chairman Sibil Svilan told the press in Ljubljana.

The funds will be available to companies and sole proprietors and are intended for international deals and economic cooperation, economic incentives, R&D projects, environmental protection and boosting of energy efficiency, economic and public infrastructure and local development.

According to Svilan, SID decided for new loans because the credit crunch persists and because the Slovenian economy is entering the second, key part of the crisis, which will show whether it is capable to make the necessary development breakthrough.

The scheme will be carried out through commercial banks because this is usual practice of development banks and because SID is a relatively small player on the financial market, he added.

Commercial banks will have to add at least 20% of their own funds, which means that the EUR 250 credit line would generate about EUR 310m of new loans.

The 13 participating banks will have to transfer the funds to final users within nine months after they sign loan contracts, and at least half of funds will have to be distributed within six months.

Svilan is convinced that SID has played one of the key roles in helping the Slovenian economy fight with the credit crunch and the economic crisis, making available EUR 2.3bn to businesses in 2009 in cooperation with commercial banks.

The bank also announced a new scheme for reinsurance of claims, which is expected to be launched next year. The scheme was confirmed on Wednesday by the bank's commission for enhancement of international trade, but it has to get approval from the European Commission.

SID management board member Jozef Bradesko told the press that the purpose of the scheme is to offer to Slovenian companies insurance coverage for claims for which they are currently unable to get coverage on the insurance and reinsurance markets.

Svilan added that the crisis trends will continue for a few years and that further tools for boosting development have to be prepared also for the coming years.

The bank's plans for 2010 include funding of exports to emerging markets, such as India, China and Brazil, project funding at home and abroad and creation of a special development platform.

SID is also considering adding a mechanism for the funding of energy efficiency projects and a special investment fund to the existing credit lines of the European Investment bank for car industry, SMEs, environmental investments and infrastructure.

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