Deutsche Bank taps EIB to make funding accessible

Deutsche Bank, in tandem with the European Investment Bank (EIB), has embarked on a groundbreaking collaboration aimed at bolstering mid-sized companies in their pursuit of sustainable transformations. Under this initiative, companies ranging from 250 to 3,000 employees within Germany and the European Union will have the opportunity to secure long-term loans through Deutsche Bank, ultimately fuelling their transition towards more sustainable business paradigms.

A substantial portfolio of 400 million euros has been earmarked for this endeavour, with a notable emphasis on financing projects that foster the expansion of renewable energy production. These projects align with the stringent sustainability standards set forth by the European Union’s taxonomy.

The crux of this partnership hinges on the EIB’s commitment to provide guarantees, covering up to 50 percent of the loan amount, in a move designed to alleviate the financial burdens placed on the borrowing entities. This substantial backing from the EIB is set to catalyse sustainable transformation initiatives among mid-sized companies.

The collaborative effort bears significance in the broader context of an EU-wide linked risk-sharing (LRS) program, which strategically employs risk-sharing mechanisms to mitigate some of the financial challenges exacerbated by contemporary economic uncertainties. These uncertainties encompass a spectrum of factors, including supply chain bottlenecks, inflationary pressures, escalating interest rates, and energy supply vulnerabilities.

Hauke Burkhardt, the Global Head of Corporate Bank Lending at Deutsche Bank, underscored the critical role of such partnerships, stating, “The energy transition in particular entails a high need for transformational financing for many companies. Sustaining this significant financing volume requires strong partnerships – especially between promotional and commercial banks. The LRS program serves just this purpose. The new partnership between the EIB and Deutsche Bank provides corporate clients with reliable support for their transformation projects.”

EIB Vice-President Ambroise Fayolle, responsible for bank financing in Germany, echoed the sentiment, emphasising the collaborative’s commitment to fostering sustainable change. He noted, “We are pleased to be working with Deutsche Bank to support Germany’s real economy in its sustainable transformation, by providing medium-sized companies with long-term loans. Together, we are promoting the expansion of renewable energy and greater energy efficiency. This will accelerate the shift away from fossil energy in Germany.”

This strategic alliance between Deutsche Bank and the EIB not only underscores the growing momentum behind sustainability initiatives but also highlights the pivotal role that financial institutions play in propelling such transformations. It signifies a concerted effort to bridge the financing gap for mid-sized companies as they chart their course towards a more sustainable future, making it a noteworthy development in the world of finance and sustainability.