Factsheet for measure
LU-2022-19/2251
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Updated
– measures in Luxembourg
Loan guarantees for companies with liquidity issues
Aides sous forme de garantie
Background information
The Government is committed to putting in place new aid both in the short term for companies heavily impacted by rising energy prices, and in the short and medium term to support companies in the energy transition and decarbonisation of their activities, in line with European rules on state aid.
In this context, the aid scheme in the form of a guarantee is intended to facilitate access to bank loans for eligible companies that have liquidity needs due to the economic consequences of Russia's aggression against Ukraine.
The aid scheme in the form of guarantees was put in place by the law of 15 July 2022.
Following the example of the scheme put in place at the beginning of the COVID pandemic, the state guarantee could cover up to 90% of the loan.
Content of measure
The bill on the aid scheme was submitted to the Chamber of Deputies on 28 April 2022. It provides for loans to be granted by credit institutions between 1 May 2022 and 31 December 2022 to companies that have liquidity needs due to the economic consequences of Russia's aggression against Ukraine, under the conditions defined by the bill.
The maximum amount of loans eligible for the state guarantee is:
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15% of the average total annual turnover of the enterprise over the last three financial years or
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50% of the energy costs of the company in the 12 months preceding the month of notification to the Treasury in accordance with Article 4(1) of the draft law.
Where the applicant has been in existence for less than 3 years or 12 months respectively, the thresholds shall be calculated on the basis of the period of existence at the time of notification to the Treasury pursuant to Article 4(1) of the Bill (see attachement: "projet de loi").
The following undertakings are excluded from the scope of application of this law:
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undertakings which are subject to collective insolvency proceedings under the national law applicable to them
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undertakings whose main activity consists in the development, holding, renting and trading of real estate
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undertakings whose principal activity is the holding of participations in other companies.
The State guarantee covers investment loans and working capital loans with a maximum duration of six years.
Updates
The following updates to this measure have been made after it came into effect.
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31 December 2022
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At 31.12.2022, the Luxembourg State had granted direct financial guarantees totalling EUR 8,647.9 million. The guarantees granted include two schemes:
- the bank loan scheme guaranteed by the Luxembourg State as part of the Covid-19 pandemic:
Participating banks were able to grant guaranteed loans to companies affected by the crisis up to a maximum of €2.94 billion (85% x 2.94 = €2.5 billion). In view of the gradual improvement in the economic situation, the guaranteed loan scheme has not been extended beyond the cut-off date of 31.12.2021. As a result, no new loans will be granted from now on. Total outstanding loans under the new scheme amounted to EUR 193.4 million at 31.10.2023. The State guarantee (85%) covers a total of EUR 164.4 million.
- the aid scheme in the form of guarantees in favour of the Luxembourg economy following Russia's aggression against Ukraine:
The State guarantee covers 90% of the loan and an overall envelope of EUR 500 million has been earmarked for this purpose. Within this framework, the participating banks have the option of granting guaranteed loans to companies affected by the crisis up to a maximum of €555.55 million (90% x €555.55 = €500 million).
On 27 July 2022, 6 banks signed an agreement with the State to be able to offer State-guaranteed loans. These banks are BCEE, BIL, Banque de Luxembourg, Banque Raiffeisen, BGL BNP Paribas and ING.
Total outstanding loans granted under this scheme amounted to EUR 237.8 million at 31.10.2023. The State guarantee (90%) covers a total amount of EUR 214.1 million.
(https://tresorerie.public.lu/fr/garanties.html
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Use of measure
All companies. No current estimation.
Target groups
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Workers
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Businesses
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Citizens
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Does not apply to workers
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Applies to all businesses
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Does not apply to citizens
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Actors and funding
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Actors
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Funding
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National government
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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No involvement
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Informed
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Form
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Not applicable
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Not applicable
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Social partners' role in the
implementation, monitoring and assessment phase:
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No involvement
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Main level of involvement: Company level
Involvement
Social patners are not involved.
Views and reactions
This measure is part of a package of provisions that have been requested by employer's organisation and trade unions during the Tripartite meeting in March 2022.
Sources
