Crédit Agricole and the European Investment Bank have agreed a €400 million funding package to support small and medium-sized businesses and mid-sized companies in France’s defence sector, with an initial €100 million tranche now signed.
The financing will be distributed through Crédit Agricole’s network of regional banks and is intended for companies in France’s defence industrial and technological base, known by its French acronym BITD, the EIB informed on Wednesday.
The package covers projects in defence innovation and research and development, modernising and expanding production capacity, cybersecurity and protection of critical data, and defence equipment and infrastructure.
Individual projects can receive funding covering 50% to 100% of costs, up to a maximum allocation of €12.5 million, with total project costs required to be below €25 million.
France’s BITD includes around 4,500 micro-enterprises, SMEs and mid-cap companies, alongside nine major contractors.
Focus on access to finance and cyber risks
Access to finance remains a challenge for smaller firms in the sector as they prepare for rising order books and increased pressure to scale up production, according to the European Investment Bank and Crédit Agricole.
They also cited the need for companies to strengthen resilience against cyber threats and protect critical data.
Ambroise Fayolle, a vice-president of the European Investment Bank, said the partnership marked the first time the EIB and Crédit Agricole had jointly supported defence SMEs through a dedicated €400 million financing package.
The EIB Group allocates around 5% of its total annual funding to security and defence projects, Fayolle added.
Gérald Grégoire, deputy chief executive of Crédit Agricole S.A., said the regional banks were best placed to support defence-sector SMEs and mid-cap companies as they transform and grow.
