EIB Group

Manager of the EIB Infrastructure Loans

In 2000, the Government of the Czech Republic decided to transform the state-owned Consolidation Bank Prague (CBP). This financial institution was established in 1991 to deal with the legacy of loans from the era of centrally planned communist economy. These loans were an immense burden for private enterprises undergoing transformation as well as they increased credit risk for commercial banks. In the mid-1990s, the CBP enlarged the scope of its activities and started to finance transport and water management infrastructure using seven European Investment Bank loans. In 2001, these assets totalling EUR 950 million were transferred to the National Development Bank. Since then, the NDB became an important partner of the EIB in the Czech Republic as an administrator of EIB credit lines on behalf of the state.

Between 2001 and 2005, the NDB managed one loan worth of EUR 100 million (CZK 3.1 billion) designed to finance water infrastructure and provided 145 loans to municipalities and municipal utility companies. Total investments reached almost CZK 7.3 billion. Between 2001 and 2014, the NDB managed five loans worth of EUR 650 million designed to finance transport infrastructure. The remaining loan worth of EUR 200 million was signed in 1997 and was designed to finance post-flood recovery of the country, including roads, municipal infrastructure and flood protection measures. The NDB continues to finance transport infrastructure with the resources coming from the State Fund for Transport Infrastructure.

Up to now, the NDB financed different infrastructure projects with total costs exceeding CZK 150 billion. Most of this financing was realized using the EIB loans, which served as a leverage tool for additional public and private financing.

SME Financing

In December 2007, the NDB signed a loan agreement with the EIB worth of EUR 22 million to co-finance loan programs funded from the European Structural and Investment Funds, Operational Programme Enterprise and Innovation.

JESSICA – Urban Development Fund Manager

Moravian-Silesian Region as a Managing Authority of the M-S regional operational programme in the period 2007-2013 decided to use part of its allocation through financial instruments. In February 2010, it created JESSICA (Joint European Support for Sustainable Investment in City Areas) holding fund managed by the EIB, with a total allocation of EUR 20 million (CZK 500 million). The following year, two Urban Development Funds had been created with the aim to revitalise the degraded urban areas and strengthen business environment in the region. Brownfield revitalisation, development of tourism, development of sports and recreational facilities and improvement of public service infrastructure were among eligible activities.

NDB was selected as a manager of one of the two funds. It provided one loan to the city of Bohumín enabling a total reconstruction of the National House. Reconstruction cost CZK 52 million, with JESSICA loan covering CZK 37 million.

In 2014, management of the holding fund was taken by the region itself. Subsequently, unused allocation from the NDB-managed urban development fund was reallocated to the second fund.

Loan for Municipal and Regional Development

In July 2021, the EIB and the NDB signed the so-called “Multi-beneficiary intermediated loan”, which will enable the NDB to offer EUR 191 million (CZK 5 billion) for public infrastructure projects across the Czech Republic.

Multi-Annual Programme for Enterprise and Entrepreneurship (MAP)

In 2003, the NDB signed its first counter-guarantee with the European Investment Fund. This counter-guarantee enabled to increase capacity of our flagship GUARANTEE programme, offering loan guarantees, equity guarantees and tender guarantees for small and medium-sized enterprises. Agreement with the EIF was amended twice and ended in November 2006, when the guarantee capacity was fully exhausted.

Competitiveness of Enterprises and Small and Medium–sized Enterprises (COSME)

In July 2015, the NDB signed a counter-guarantee agreement under the COSME Loan Guarantee Facility. It was the first use of the European Fund for Strategic Investments (EFSI, the so-called Juncker plan) in the Czech Republic. This counter-guarantee enabled to increase capacity of our successor flagship programme GUARANTEE 2015-2023 offering loan guarantees for SMEs. This agreement was amended four times, prolonging expiration until December 2023.

Sharing the risk with the EIF through COSME LGF helped the NDB to significantly increase the number of supported projects of Czech SMEs. As of September 2022, this counter-guarantee enabled the NDB to offer almost 13 500 guarantees in total volume of CZK 25 billion (EUR 1 billion). We expect to support more than 15,000 projects during the COSME implementation period 2015-2023.

Central Europe Fund of Funds (CEFoF)

CEFoF is a fund-of-funds initiative created by the European Investment Fund in close co-operation with five governments in the CEE region and their promotional institutions. This initiative was launched in December 2017 with the target amount of EUR 97 million. Its aim is to boost later stage and growth equity investments into SMEs and small mid-caps via venture capital funds, private equity funds, mezzanine funds and other investment vehicles. The Czech contribution, managed by the Ministry of Industry and Trade and the NDB, is EUR 8.2 million.

The CEFoF is very beneficial for the Czech Republic. As of 1Q/2022, the fund has already invested in three Czech venture capital and private equity funds and through them it supported thirteen companies based in Czechia. This represents the biggest part of the support among all participating countries, with more than one third of the total volume of the Fund being invested in Czechia.

Shareholder of the European Investment Fund

With the aim to actively participate in the EU SME policy goals with a direct positive impact on Czech enterprises, the NDB bought three shares and became an EIF shareholder in February 2017. With regard to the pro-rata participation in the EIF capital increase, the NDB bought another two shares in 2021 and currently holds five EIF shares.