A new €300 million lending agreement between the European Investment Bank (EIB) and BNG Bank will facilitate low-cost financing for Dutch public sector entities.
The loan follows a memorandum of understanding between the two financial institutions, which stipulates that they will exchange knowledge and experience with the goal of stimulating public investments in the Netherlands. Under the agreement, the EIB is making €300 million available to BNG Bank, which commits itself to on-lend the amount on favourable terms mainly to healthcare and educational institutions.
Since the EIB typically only finances up to 50% of the total cost of a project, a total of €600 million worth of loans can be generated together with BNG Bank. The EIB’s support also means that the interest rates for BNG Bank clients will be even lower than the rates on regular loans.
“As market leader in public sector finance, BNG Bank aims to have an impact on society by helping its clients solve their key transition challenges by providing financing at the lowest possible rates. This EIB loan enables BNG Bank to offer competitive rates to clients in the healthcare and education sectors, in particular. This lending agreement thus fits perfectly with our strategy,” said Thomas Eterman, CCO of BNG Bank.
EIB Vice-President Kris Peeters added: “BNG Bank is very well-placed to help local authorities with competitive financing. The EIB uses its entire arsenal of financial instruments to provide financial support to as many parties as possible, and we’re very glad that we can count on the partnership with BNG Bank to, for example, support the middle-sized segment in the Dutch public sector.”
A first collaboration agreement between the EIB and BNG Bank signed in 2016 saw the signature of a €250 million loan, which ultimately led to €500 million worth of investments in the public sector. This financing mainly went towards social housing cooperations, in support of the Dutch real estate construction sector.
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