Saint Lucia: EIB announces new support for businesses impacted by Covid-19

(Source: European Investment Bank)

  • Team Europe finance to help businesses in Saint Lucia get access to finance
  • First EIB agreement in the Eastern Caribbean since the launch of EIB Global 
  • Financing and technical advice contributes to the EU’s response to the Covid-19 pandemic

The European Investment Bank (EIB) and the Saint Lucia Development Bank (SLDB) are partnering to deliver XCF 13.5m (USD 5m) in financing for Covid-impacted businesses.

The funding will provide micro, small and medium sized enterprises (MSMEs), which can struggle to get financing through the traditional financial sector, with short and medium-term loans. The short-term financing would support working capital and liquidity needs of the MSMEs affected by the Covid-19 breakout, while the medium-term financing would help them invest to expand their business, thereby creating and sustaining jobs.

During a signature event in Saint Lucia, the EU and SLDB today signed an agreement for training and consulting services to help promote responsible financial inclusion to reduce poverty and encourage entrepreneurship, targeting in particular women and youth. The training and consulting services, which will benefit SLDB and its clients, will help improve the quantity and quality of financial services on offer in Saint Lucia, and is being paid for by an EU grant.

Hon. Emma Hippolyte, Minister for Commerce, Manufacturing, Business Development, Cooperatives and Consumer Affairs, said: “At this time, when we have faced such unprecedented economic hardship, we recognise that the private sector is key to allowing our economy to grow and flourish again. Therefore, we are providing support to the businesses of Saint Lucia to access affordable credit, together with the EU. We will target young entrepreneurs, and female-led businesses, as we diversify the economy and make the very best of Saint Lucia’s much-valued talent and resources.”

Ricardo Mourinho Félix, European Investment Bank Vice President responsible for the Caribbean said: “Providing additional liquidity for working capital and attractive financing conditions for new investment projects in Saint Lucia will be critical for the survival of local businesses as they emerge from the crisis. With its expertise in development finance, SLDB can help ensure that funding is made available to the businesses that need it in a short timeframe.  This loan in the Caribbean offers a tangible example of the EIB’s response to the Covid19 pandemic and its approach to tackling issues affecting small island states, including entrepreneurship barriers, social exclusion and low economic growth”.

EU Ambassador, H.E. Malgorzata Wasilewska said: “This cooperation is an example of EU blended finance, in which we complement financing from the European Investment Bank with grants, to increase the affordability and the impact of our support. We have world-class consultants from the Frankfurt School of Finance and Management working with SLDB to help them refine their strategy and internal processes, and increase their impact in the market. This is Team Europe supporting Saint Lucia, a valued partner of the EU, to help recover from the pandemic.”

Cornelius Sidonie, Managing Director of Saint Lucia Development Bank, said: “The MSME sector is a critical pillar of economic growth in Saint Lucia, as it accounts for a sizeable share of the workforce and GDP. The ongoing Covid-19 pandemic has had a devastating impact on the sector, and it is therefore of paramount importance to increase the resilience of MSMEs. This funding from the EIB is intended to benefit MSMEs that are financially excluded or under-served by the traditional financial sector in Saint Lucia, with short-term and medium-term financing. The technical assistance component of the project is geared at strengthening the technical capacity and r esources of the bank to better serve our business sector. So, as we are on the cusp of the first drawdown, I need to say thanks to the EIB team for their unwavering support throughout the process.”

EIB Global: a new partner for Team Europe

Last year, the EIB Group provided USD 8.3bn of financing to projects in more than 160 countries outside the European Union including in the Caribbean, bringing the total amount of investments outside the EU to more than EUR 1.5tn in the EIB’s history since 1958.

Underlining its worldwide reach, in January 2022 the EIB announced the establishment of EIB Global, its new division dedicated to international partnerships and development finance. EIB Global will bring together all of the EIB’s resources and expertise for financing projects around the world under a new governance structure to make a stronger, more focused contribution to Team Europe projects and initiatives.

Sustainable development goals

The loan is expected to contribute towards a number of Sustainable Development Goals (SDGs) – in particular to SDG-8 “Decent work and economic growth” and SDG-10 “Reduced inequalities”, and ultimately towards SDG-1 “No Poverty”. The loan contributes to the EU cooperation and development strategy for Caribbean region in general and Saint Lucia in particular, specifically addressing the special needs of small island developing states (SIDS) in terms of inclusive and sustainable private sector development.

The EIB in Latin America and the Caribbean

Since the EIB began operating in Latin America and the Caribbean, it has provided total financing of USD 11.6bn to support 150 projects in 15 countries in the region. The EIB has been working in the Caribbean since 1978, providing almost €2 billion in financing for 221 projects. The EIB has provided a total of USD 45m to projects in Saint Lucia since it began investments in the country in 1981.

Background information:

EIB Global is the EIB Group’s new specialised arm dedicated to increasing the impact of international partnerships and development finance.  EIB Global is designed to foster strong, focused partnership within the overall Team Europe approach for transformational projects, alongside the EU’s grant programmes, fellow development finance institutions and civil society. EIB Global brings the EIB Group closer to people, companies and institutions through our offices across the world.

Saint Lucia Development Bank (SLDB) is a government-owned bank with a mandate to mobilize and provide finance for and promote and facilitate the expansion and strengthening of the economic development of Saint Lucia. It focuses on making loans for enterprises in the areas of agriculture, fishing, forestry, manufacturing/industry, tourism, education, services and other areas; providing technical assistance to enterprises; and such other things considered necessary in the pursuit of socio-economic and capital market development in Saint Lucia and the sub-region.

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