The Future Growth Loan Scheme currently makes up to €300 million of loans available with a term of 8-10 years and is operated by the Strategic Banking Corporation of Ireland (SBCI) though participating lenders. Funding made available by the scheme facilitates long-term, strategic investment.
As at 8 May 2020, the scheme has received 3,502 eligibility applications, with 3,327 approved, 160 currently in process and 16 deemed ineligible. The scheme has seen significant uptake and the initial €300m funding has been almost fully subscribed, supporting a significant level of strategic investment by businesses. On 2 May, I announced an expansion to the Future Growth Loan Scheme of €200m. Officials of my Department, the Department of Agriculture, Food and the Marine, the Department of Finance, and the SBCI are working to ensure this is available as soon as possible.
The scheme is underpinned by a 64% counter-guarantee from the European Investment Fund. This counter-guarantee provides significant risk protection to the Exchequer against potential losses from the loan guarantee scheme. The FGLS was established using the European Investment Fund Agreement Act 2018. This Act allows for the Minister for Business, Enterprise and Innovation and the Minister for Agriculture, Food and the Marine to enter into agreements with the European Investment Fund (EIF) to facilitate access to finance for qualifying enterprises.
There is a limit of €75 million set out in the Act on the total value of agreements (for First Loss payments) that the relevant Ministers can enter into with the EIF. Capacity currently remains within the aggregate limit set out in the Act to allow for an agreement with the EIF in relation to the planned €200m expansion of the FGLS.
However, the European Investment Bank (EIB) Group recently announced, as part of the European Union response to COVID-19, that it would be providing €25 billion in guarantees to underpin €200 billion in funding for member States to mitigate the impact of COVID-19. For Ireland to be able to enter into additional agreements with the EIF, so as to leverage these EIB guarantees, will require an amendment to the aggregate limit set out in the European Investment Fund Agreement Act 2018.
Officials of my Department have been working urgently alongside the Office of Parliamentary Counsel on the drafting of legislation to amend the aggregate limit for agreements within the European Investment Fund Agreement Act 2018. The intention is that it will be progressed through the Oireachtas as a matter of urgency once a new Government is formed.