The European Commission has approved a Czech scheme (‘COVID Invest’) for guarantees on new investment loans to support lending to companies affected by the coronavirus outbreak, as well as the modification of an existing scheme (‘COVID Plus’), which provides guarantees to large exporting companies. The two schemes were approved under the State aid Temporary Framework. The ‘COVID Invest’ scheme approved today will share its budget with an earlier scheme (‘COVID III’), which was approved by the Commission on 15 May 2020 (SA.57195).
These two measures can jointly generate loans with a nominal amount of up to approximately €19.3 billion (CZK 500 billion). The ‘COVID Invest’ scheme will provide guarantees on new investment loans to SMEs and large enterprises with up to 500 employees active in all sectors, excluding the financial sector as well as companies active in the extraction or manufacturing of coal, petroleum, or gas, tobacco manufacturing and retail sales, and, gambling and betting activities. The scheme will provide guarantees on loans addressing the liquidity needs of firms whose financial needs have increased significantly over the past year, including fast-growth companies, start-ups and scale-ups.
The scheme will be managed by the Czech promotional bank (CMZRB). The Commission found that the ‘COVID Invest’ scheme is in line with the conditions set out in the Temporary Framework. In particular, (i) it covers guarantees on new investment loans with a limited maturity and size; (ii) it is limited in time; (iii) it limits the risk taken by the State up to a maximum of 90%; (iv) it provides for adequate remuneration of the guarantees; and (v) it contains safeguards to ensure that the aid is effectively channelled by the banks or other financial institutions to the beneficiaries in need.
With regard to the existing “COVID Plus” scheme, which was originally approved by the Commission on 5 May 2020 (SA.57094), and subsequently modified on 20 July 2020 (SA.58015) and 23 December 2020 (SA.60374), the modification approved today expands the sectoral scope of the scheme, by including companies in the accommodation business. All other conditions of the existing scheme remain unchanged.
The Commission concluded that the “COVID Invest” scheme and the amended “COVID Plus” scheme are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case numbers SA.61470 and SA.61824 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.