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SID Bank and the Ministry of the Economy set up a new loan fund of EUR 100 million

Slovenian companies directly or indirectly affected either by the crisis brought on through Russia's aggression against Ukraine or the energy crisis are offered new loans with favourable interest rates from SID Bank for investment and day-to-day business purposes.

The EUR 100 million-loan fund is intended to finance technological development and other investments, or to finance liquidity (working capital) in companies affected by the Ukraine and energy crises.

From this fund, favourable financing under the ORMG2 Programme is once again available to Slovenian businesses to resolve liquidity and support investments to counteract the direct or indirect effects of the crisis wrought by Russia’s aggression against Ukraine. The programme aims to make it easier and cheaper for affected companies to access debt financing, thereby facilitating business operations, maintaining and strengthening competitiveness and enabling further development. The loans offer benefits to the final recipients in terms of maturity, collateral, moratoriums and interest rates, which are generally lower than market rates. Loans are granted under state or 'de minimis' aid rules.

The programme provides loans of up to EUR 100,000 to companies, cooperatives and sole traders, financing up to 85% of the value of the investment or eligible costs. The loans have a minimum maturity of 2 years and a maximum maturity of 15 years for investments and 8 years for working capital. The amount of the loan must be consistent with the conditions laid down in the investment strategy.

This is a joint measure of the Ministry of the Economy, Tourism and Sport and SID Bank. The loan fund’s (also known as the PS6 or ORMG2 loan fund) running costs were financed by the Ministry of the Economy in the amount of EUR 25 million and by SID Bank in the amount of EUR 75 million based on the Agreement on the financing and implementation of the Financial Engineering Measure referred to in paragraph two of Article 50 of the Act Governing Aid to Businesses to Mitigate Impact of Energy Crisis, signed on 4 October 2023.

Matjaž Han, Minister of the Economy, Tourism and Sport, underlines the importance of the cooperation between the Ministry and SID Bank, especially at a time when the economy is forecast to cool down in some of the key partner export markets, due to several large-scale crises (COVID-19, the energy crisis or the Ukraine crisis, supply chain disruptions) and after this year's catastrophic floods. Cooperation between the two institutions is especially necessary in view of the simultaneous need for the radical transformation and strengthening of the economy’s added value.

In this context, Minister Han highlights the advantages of repayable financing, which combines the public financial resources of the state and SID Bank: “In these times, it is a challenge for companies, especially small and medium-sized enterprises, to obtain affordable loans at market conditions. The cost of borrowing is generally expensive at this time due to high market interest rates, and the situation is partly unpredictable. In order to remain competitive, it is crucial that we, together with SID Bank, provide affordable and accessible liquidity and investment funds to the economy in times of crisis. In practice, this means that we can support risky transactions, lower interest rates, longer maturities or moratoriums on principal repayments, and lower collateral. Many of the companies affected by the energy crisis or the Ukraine crisis were also affected by the August 2023 floods, so the new measure can also indirectly help in dealing with the consequences of the floods.”

Presenting the new programme, Borut Jamnik, President of the Management Board of SID Bank, added: “This is another in a series of successful collaborations between SID Bank and state institutions, which pleases us greatly, as such collaborations contribute the most to companies, which will obtain favourable sources of financing for their business through the new loan fund. Such financing is indispensable for companies to grow competitively, and SID Bank is thus also fulfilling its stimulating role in the Slovenian economy.”