A £120m fund to support the growth of hundreds of North East businesses hopes to go live early next year after an important milestone was reached.
The North East Fund – also known as “JEREMIE” – will offer a range of equity investments and loans to firms to drive local growth and job creation in the North East LEP area.
The final piece of the funding jigsaw was agreed in principle this week by the European Investment Bank’s (EIB) top level Management Committee, after several months of intensive negotiations, following the triggering of Article 50 in March. The £60m loan represents a significant vote of confidence in the North East.
The EIB contribution will form part of a £145m funding package supported by the Department for Communities and Local Government (which has responsibility for the European Regional Development Fund in England) and legacy returns from earlier successful funds operating in the region. The seven North East Local Authorities, working through the NECA Leadership Board, have also been fully engaged in bringing the programme to fruition.
The North East Local Enterprise Partnership (LEP) led the project team negotiating for the Region. Although the Fund will invest exclusively in the NELEP area, it will also sit alongside the Northern Powerhouse Investment Fund (NPIF), operating in other LEP areas, to drive business growth right across the Northern Powerhouse.
The North East Fund will provide financial support for over 600 businesses, creating around 3,500 over the life of the fund and delivering a legacy fund of up to £80m for further investment in the region over the next decade.
Helen Golightly, executive director for the North East LEP, said: “Our project team has been working continuously with HM Treasury and the EIB behind the scenes to make this fund a reality. Both have been committed to the new Fund from day one and we are grateful to them for their support. This hugely positive decision, though still subject to contract, is a real coup for the North East and, critically, enables us to retain independence and local control over how these funds are used.
Andrew Mitchell, chief executive of the North East Fund Limited, which will deliver the new programme, added: “This announcement follows months of painstaking work and we are delighted that the European Investment Bank will remain a major long-term investor in the North East. We will now focus on getting money to businesses as soon as we possibly can.”