Italy: new resources from the EIB-EIF and CDP for natural disasters and social projects
€530 million for families and SMEs for losses caused by natural disasters
€100 million from the Social Impact Italia Programme for social economy projects
Memorandum of Understanding between CDP and EIF extending partnership to support SMEs with innovative tools
Statement by
"
Statement by
“CDP is reaffirming its commitment to impact finance with the launch of the Social Impact Italia Programme, a new tool capable of supporting key market players with capital for social innovation. The agreement, coupled with new measures for families and SMEs, was made possible thanks to CDP's long-standing partnership with the EIB and the EIF and will catalyse further EU resources for
Statement by
“With the agreements between the EIF and CDP signed today, the portfolio of instruments available to smaller Italian companies is becoming increasingly more plentiful. The growth of tools has accelerated decisively with the Investment Plan for
Natural disasters
This agreement involves a loan of €530 million from the EIB to CDP, of which the first tranche of €230 million was signed today. The resources will be channelled into a €1.5 billion fund that CDP has set up to support reconstruction after the losses suffered by households and businesses as a result of 40 natural disasters (floods, landslides, etc.) in the last four years in 16 Italian regions.
The financing will take the form of a tax credit, a mechanism that has already been used with success in the case of the earthquakes in Abruzzo,
Social Impact Italia Programme for the social economy
Collaboration with the
Partnership between the EIF and CDP for new financial products serving SMEs
The framework agreement signed today between the EIB and CDP consolidates and expands the partnership between the two institutions, further enriching the range of tools available to Italian and European SMEs. Since 2015, as part of the “Juncker Plan”, CDP and the EIF have launched a number of joint initiatives in the areas of equity, securitisation, guarantees and, more recently, financial products that efficiently use Structural Funds and promote access to credit through channels that are alternative and complementary to traditional sources of funds, such as debt financing.
Background information:
The tax credit mechanism
The CDP Plafond, partially financed by the EIB via the credit line agreement signed today, is based on the tax credit mechanism and has a twofold advantage: on the one hand, it makes resources immediately available to families and businesses of the communities impacted by natural disasters. On the other hand, it enables the state to share the burden of reconstruction over time, taking advantage of the EIB's favourable conditions as regards interest rates.
Specifically, the structure of the operation involves a number of steps:
the EIB finances the funding that CDP, under an agreement already signed with the
Families/private individuals and SMEs apply to the competent authorities to certify the losses they have incurred and the amounts involved. They then submit the document certifying the need for the reconstruction work and the associated amount to their bank;
On the basis of the certified damages, a tax credit is granted to the injured party (families, businesses) and transferred to the bank in order to reimburse the subsidised loans;
The bank receives the amount indicated from CDP and makes progress payments directly to the professionals and firms hired to design and execute the works;
The bank, on the basis of the tax credit of the injured party, is then reimbursed over the duration of the loans by the state.
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