Partial compensation of interest is the provision of financial support of the European Union (EU) to the project promoter by financing part of interest paid by the project promoter. Business companies that receive financial support in the form of non-repayable subsidies can reduce their burden of obtaining financing, cut costs and plan business development with more ease.

During the 2014-2020 EU financing period, the joint instrument of partial compensation of interest is made up of the following three instruments:

  • Partial compensation of interest to increase the entrepreneurship of small and medium-sized businesses (SMEs). The call for applications was suspended on 6 February 2019 as the highest permitted financing amount was reached;
  • Partial compensation of interest to increase the productivity of micro, small and medium-sized businesses (SMEs). The call for applications was announced on 16 August 2017;
  • Partial compensation of interest to increase the efficiency of industrial companies. The call for applications was announced on 8 March 2016.

In total, EUR 29,751,409 from the European Regional Development Fund (ERDF) has been earmarked for the implementation of the instrument of partial compensation of interest.

Partial compensation of interest to increase the productivity of SMEs

Instrument No. 03.3.1-IVG-T-810. The call for applications was announced on 16 August 2017.

The implementation of this Instrument contributes to the improvement of the productivity of SMEs using advanced production technologies or modernizing the existing production equipment. A total of EUR 2,649,419 was earmarked from the ERDF for the implementation of this Instrument.

The main conditions for obtaining partial compensation of interest are as follows:

Investment loan or financial lease (leasing) transaction for the SMEs operating in the services and manufacturing sectors.

Investment loan is a loan with at least of 51 % is intended to finance the borrower’s investments in its tangible and intangible assets.

 

Compensation of interest is not available for investment loans where the whole portion of the loan earmarked for investment is intended to purchase real estate and/or to finance construction, to acquire financial and investment assets and/or to purchase non-commercial (having regard to the category and class specified in the vehicle registration certificate) motor vehicles.

Eligible applicant Project promoter’s place of registration Amount of compensation Form of compensation Availability period
SMEs operating in the manufacturing and services sectors All municipalities in Lithuania Up to 95 % an investment loan / financial lease (leasing) transaction covered or not covered by an individual guarantee of INVEGA from the financial institution’s own funds or the state budget to increase productivity;

an investment loan under the debt financial instrument funded by the EU structural funds (risk-shared loan with de minimis aid) or investment loans of the portfolio guarantee / under the financial lease (leasing) to increase productivity;

an investment loan granted under the crowdfunding platform to increase productivity.

Up to 36 months
SMEs operating in the manufacturing and services sectors All municipalities in Lithuania Up to 50 % an investment loan under the debt financial instrument funded by the EU structural funds (risk-shared loan with de minimis aid) to increase productivity. Up to 36 months

 

 

Please note: All the funds available under Instrument No. 03.1.1-IVG-T-809 Partial compensation of interest (hereinafter referred to as Instrument No. 03.1.1-IVG-T-809) have been used, and since 6 February 2019 no compensation of interest has been provided to SMEs under this Instrument.

Partial compensation of interest to increase the efficiency of industrial companies

(Instrument No. 04.2.1-IVG-T-811)

The implementation of this Instrument is aimed at contributing to the increase of energy efficiency in industrial companies. A total of EUR 700,000 of was earmarked from the ERDF for the implementation of this Instrument.

The main conditions for obtaining partial compensation of interest are as follows:

Eligible applicant Project promoter’s place of registration Amount of compensation Form of compensation Availability period
Industrial companies (both SMEs and large companies) All municipalities in Lithuania 100 % – an investment loan and leasing to finance the installation of equipment and technology (technological solutions) enabling to increase energy efficiency of companies Up to 60 months

 

 Partial compensation of interest is not available for:

  • The acquisition of goods transport (trucks, trailers, semi-trailers, etc.) carried out by enterprises engaged in freight transport by road (business code according to NACE2 49.41);
  • Farmers;
  • Refinancing of other creditor obligations.

 

Please note:

  • Applications must be submitted (registered at INVEGA) within 3 months from the date of signing of the financing agreement. If they are submitted at a later date, interest will be compensated as from the date of submission of the application, if it coincides with the first day of the calendar month, or as from the first day of the next (calendar) month (subparagraph 41.6 of the specification of the terms and conditions of financing of the Instrument).
  • The period of processing of applications is up to 30 days from the date of receipt of a duly completed application with the necessary accompanying documents by INVEGA.
  • An investment loan is a loan whose 51 per cent of the amount is intended for investment and up to 49 per cent to finance the working capital of the borrower.
  • The interest rate used as a baseline for the calculation of the maximum amount of partial compensation of interest is the interest rate specified in the financing agreement applicable on the date of signing of the financing agreement. If this interest rate is above 7 per cent per annum, partial compensation of interest is calculated on the basis of the annual interest rate of 7 per cent (paragraph 39 of the Specification of the terms and conditions of financing of the Instrument).
  • Interest may also be partially compensated where the loan or leasing is intended to refinance investments or working capital paid out of own funds of the applicant or project promoter (not earlier than in the last 3 months prior to the date of signing of the financing agreement) (paragraph 21 of the Specification of the terms and conditions of financing of the Instrument). Interest is not compensated under the financial engineering instrument Promotion of Entrepreneurship under the 2007-2013 Operational Programme for Human Resource Development (paragraph 14 of the Specification of the terms and conditions of financing of the Instrument).
  • Compensation of interest is provided to the project promoter as de minimis aid under Commission Regulation (EU) No 1407/2013 in all sectors with the exception of sectors listed in Article 1(1) (Chapter IV of the Specification of the terms and conditions of financing of the Instrument).

Call for applications for project financing under Joint Instrument No. J03-IVG-T Partial Compensation of Interest.

Call for applications for project financing under Joint Instrument No. J03-IVG-T Partial Compensation of Interest (16 August 2017).

 

Print Friendly, PDF & Email
Atnaujinta 2020-01-13