Up to €100 million in loans for specialist innovation projects is to be made available to Irish SMEs under a new EU-backed loan guarantee facility.

The loans, targeted at early and development stage companies, will be guaranteed up to 50 per cent by the European Investment Fund

Under the deal, Bank of Ireland will be able enter new loan agreements with SMEs to the tune of €100 million over the next two years.

The funds are part of the new generation of financial instruments supported by the EU’s Horizon 2020, its flagship innovation programme.

Carlos Moedas, European Commissioner for Research, Science and Innovation, said: "In 2014, Ireland was the fastest-growing economy in the EU, but there is further scope for domestic innovation to grow."

“This first agreement under InnovFin SME Guarantee is a tangible proof that the EU actively supports this objective by facilitating investment in SMEs, the biggest job creators in Ireland and across the EU.”