Nature of Funding
- Aimed to provide Medium to Long Term Financing i.e. min. 2y and up to 7 years
- Supporting SMEs/Midcaps with Capex and Working Capital requirements
- Final Beneficiaries get to enjoy a Financial Advantage in the form of extended tenors on the facility. Longer maturities made available by the EIB are of particular relevance in Zimbabwe. The bank will therefore use the EIB funds to provide loans to Final Beneficiaries that are on average longer than the Borrower's typical loan maturities applicable for a comparable loan without funding from the EIB.
Eligibility of Sub-Projects to be financed by EIB Funds:
- Shall be economically, environmentally, technically, and financially sound;
- If it is part of a larger investment, it must be self-contained and technically and economically viable in itself (not dependent on the realization of the remainder of the investment)
- Protected sites: Sub-Projects in sensitive sectors located in protected sites are not eligible for EIB financing. Protected sites include sites recognized under the Ramsar, Bern (Emerald network), and Bonn Conventions and areas designated or identified for designation as protected areas by national Governments.
Eligibility Criteria for Final Beneficiaries:
- Private Sector enterprises with less than 3000 employees:
- Eligible Final Beneficiaries are small and medium-sized enterprises ("SMEs"), defined as enterprises with less than 250 employees (full-time equivalent), or "MidCaps", defined as enterprises with minimum 250 and less than 3000 employees (full-time equivalent).
- An enterprise is any entity engaged in an economic activity, irrespective of its legal form, thus encompassing also family firms, partnerships, liberal professionals and associations regularly engaged in economic activity. Self-employed persons are eligible Final Beneficiaries if they are recorded in a business registry and bear a VAT number.
- To establish the enterprise's SME/MidCap status, its number of employees is calculated following the European Commission Recommendation 2003/361/EC concerning the definition of micro, small, and medium-size enterprises ("EC Recommendation") that entered into force on 1 January 2005.
- The calculation takes into account (i) direct employees and (ii) the employees of related enterprises in accordance with the EC definitions for Autonomous, Partner, and Linked enterprises, as summarized table below. The relationships between enterprises through natural persons are also taken into account if enterprises are linked (see table below) and if they are active on the same market or in adjacent markets. The total number of employees on a consolidated basis should be less than 250 and 3000 in the case of MidCaps.
- Final Beneficiary to be located and operating in Zimbabwe
- Compliance with National Law and EIB requirements:
- Sub-Projects undertaken with the proceeds of EIB funds must comply with the relevant provisions of National Law and EIB requirements described in the ElBs Environmental and Social Standards and Guide to Procurement.
- Excluded Sub-Projects:
In addition to gambling and tobacco, the following list of activities are not covered by EIB funding (the list is not exhaustive):
- The purchase (or construction or renovation) of real estate with the purpose of selling or renting the building to a third party; except for the construction of social housing, commercial centres and/or offices with the purpose of renting them to third parties which can become exceptionally eligible subject to ElB's pre-approval in each case;
- the provision of consumer finance;
- pure financial transactions which relate to any expenditure that does not lead to additional capital expenditures or operational activity of the enterprise (such as trading public stocks, other securities or any other financial product, refinancing of the enterprise's loans), including change of ownership (e.g. Mergers & Acquisitions);
- undertakings with a political or religious content;
- health sector projects with "secure units", closed psychiatric wards and/or correctional facilities;
- health sector projects which do not respect fundamental principles of sustainable solutions for society based on scientific evidence and equity of access;
- for-profit projects by kindergarten, primary and secondary schools (i.e. up to the 12th grade) in the education sector.
- large gas-fired boilers with a capacity exceeding 20 MWth; Small and medium-sized natural gas-fired boilers with a capacity of up to 20 MWth which do not meet the minimum energy efficiency criteria, defined as A-rated boilers in the EU (applicable to <400kWth) or boilers with efficiencies of >90%;
- coal mining, processing, transport and storage;
- oil exploration & production, refining, transport, distribution and storage;
- natural gas exploration & production, liquefaction, regasification, transport, distribution and storage;
- electric power generation exceeding the Emissions Performance Standard (i.e. 250 grams of CO2e per kWh of electricity), applicable to fossil fuel-fired power and cogeneration plants, geothermal and hydropower plants with large reservoirs ;
- heat production/supply and Combined Cooling/Heat and Power production (CCHP, CHP), to the exception of:
- heat production using renewable fuels or eligible cogeneration9;
- small and medium-sized natural gas boilers with a capacity of up to 20 MWth if meeting the minimum energy efficiency criteria, defined as A-rated boilers in the EU (applicable to <400kWth) or boilers with efficiencies of >90%;
- rehabilitation or extension of existing district heating networks are eligible if there is no increase in CO2 emissions as a result of the combustion of coal, peat, oil, gas or non-organic waste on an annual basis;
- new district heating networks or substantial extensions of existing district heating networks are eligible if the network uses at least 50% renewable energy or 50% waste heat or 75% cogenerated heat, or 50% of a combination of such energy and heat;
- construction of new buildings and major rehabilitation of existing buildings (exceeding 25% of the surface area or 25% of the building value excluding land), which do not comply with national building law;
- biomass sustainability conditions
- for Sub-Projects related to power/heat production using biomass, the following biomass sustainability conditions shall be met:
- feedstock shall be from non-contaminated biofuel inside the EU, or certified for sustainability when sourced outside the EU;
- forest feedstock is to be certified according to international sustainable forest certification standards;
- use of palm oil products or raw material from tropical forest/protected sites are excluded.
For the avoidance of doubt, the above conditions for power/heat/cooling production also apply to primarily non-energy related Sub-Projects, e.g. a flower production facility; For passenger cars and Light Commercial Vehicles, the vehicle shall be primarily used for business purposes.
- EIB's Exclusion Policy
SMEs/MidCaps are excluded as Final Beneficiaries of EIB financing if they are the subject of an EIB's exclusion decision which is effective at the date of signature of the legal documentation regarding the relevant Sub-Financing. EIB's exclusion decisions are taken in accordance with EIB's Exclusion Policy as published on EIB's website (http://www.eib.org/abouUaccountability/anti-fraud/exclusion/index .htm).