Posted: Fri 28th Oct 2022
Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar, and Michael McGrath, Minister for Public Expenditure and Reform, have announced details of the new €200 million Ukraine Enterprise Crisis Scheme.
The scheme has two streams of funding – the first stream will assist firms suffering liquidity problems as a result of Russia’s war on Ukraine, and the second stream will also help those impacted by severe rises in energy costs.
“The Ukraine Enterprise Crisis Scheme will help businesses competing internationally and suffering the broader effects of the war in Ukraine as well as increasing energy costs."
“It will assist companies most exposed to the significant increases in energy costs largely driven by Russia’s brutal invasion of Ukraine and other negative effects of this crisis. This particular scheme will not be limited to agency client companies but will be limited to manufacturers and exporters,” said The Tánaiste.
The Tánaiste also confirmed that the Cabinet has signed off on the unlocking of up to €1.2 billion in low-cost loans to SMEs and small mid-caps (up to 500 employees) under the Ukraine Credit Guarantee Scheme. Opening before the end of the year it will provide low-cost unsecured working capital for SMEs and primary producers to help them to spread the increased input costs and limit disruption to supply chains.
“In recent years, the Government, working with the SBCI, has stepped in to underwrite low cost, unsecured loans for business. These State-backed loans are working well: 10,000 SMEs availed of the €2bn Covid Credit Guarantee Scheme,” said The Tánaiste.
“This new Scheme will provide two tailored options for support at what is a critical time for many enterprises. This Scheme is open to applications from all eligible Manufacturing and Internationally Traded Services companies, not just those who have an existing relationship with Enterprise Ireland. Importantly, companies applying for assistance will also have to demonstrate that they have an energy efficiency plan in place or are preparing a plan to reduce future energy consumption as the enterprise sector transitions to a more sustainable future,” said Mark Christal, Head of Food and Sustainability Division with Enterprise Ireland.
Stream 1 of the Scheme will address direct liquidity issues, with aid of up to €500,000 in grants, repayable advances, equity, and/or loans. Applicant will have to demonstrate the impact of the Ukraine war on their business including supply chain and input cost increases including energy. Aid will be granted to implement a Business Sustainment Plan.
Stream 2 of the Scheme is for “energy-intensive businesses” (where energy cost was at least 3% of turnover prior to the crisis). It will be a grant of up to €2m for costs incurred between February and December 2022. The quantity of units of gas and electricity used to calculate the eligible costs must not exceed 70% of consumption for the same period in 2021 – this ensures that companies do not receive compensation for increased energy costs that have resulted from the company increasing production output compared to 2021.
For both Streams applicants must submit an energy efficiency plan either planned or underway - ratified by senior management of the company. Companies without such plans will be directed to SEAI and Enterprise Ireland climate action measures – particularly consultancy initiatives aimed at preparing an energy efficiency plan. This may increase the number of companies who will prepare energy efficiency plans in the medium to long run.
The Scheme will be implemented through Enterprise Ireland, IDA and Údarás na Gaeltachta on behalf of the Department of Enterprise, Trade & Employment.
The Credit Guarantee (Amendment) Bill 2022 will make amendments to the Credit Guarantee Scheme Act 2012 (as amended) to facilitate the creation of a €1.2 billion Ukraine Credit Guarantee Scheme, as part of the provision of a suite of additional aids to businesses during this time of economic volatility and disruption.
Enterprise Nation are working with SBCI, BPFI & Sage to support 30,000 small businesses across Ireland with the information on funding options.
For more information on Access to Finance click here.