COVID-19-Czech Government Financial Assistance Measures


The Czech Government has enacted a number of measures in order to provide businesses affected by the novel coronavirus (“COVID-19”) pandemic with a package of emergency economic relief and financial assistance. The measures are designed to help Czech businesses through the dramatic short-term effects of COVID-19 and to ensure that businesses are in a good position to emerge strong when the most difficult period is over and the economy must recover. Measures include guarantee schemes from the Export Guarantee and Insurance Corporation as well as the Czech-Moravian Guarantee and Development Bank, support for business continuity and a tailored package of measures for businesses including a standstill period for their debts.

EGAP Guarantee Scheme (large export-oriented undertakings only) 

Large export-oriented undertakings may receive support under the so-called ‘COVID Plus’ programme. Under this programme, the state-owned Export Guarantee and Insurance Corporation (“EGAP”) will guarantee loans provided by a commercial bank on the condition that the commercial bank applies for a guarantee, the relevant loan satisfies the eligibility criteria and the relevant undertaking is assigned with an acceptable internal rating by EGAP (the “EGAP Guarantee”). The Czech authorities estimate that the aggregate principal of loans under the EGAP Guarantee will not exceed CZK 142 billion (EUR 5.2 billion). Key details of the scheme are as follows:

  • Beneficiaries: the EGAP Guarantee may cover a loan provided to any business undertaking incorporated or registered in the Czech Republic if:
    • exports of goods and services constituted at least 20% of its 2019 revenues;
    • the group to which the business belongs had more than 250 employees in 2019;
    • its primary business is not transportation (including ground, air or water transportation), pipeline operations, accommodation, operation of travel agencies or reservation systems, casinos, gaming parlours or betting agencies;
    • it has not utilised any other public aid scheme in connection with the COVID-19 pandemic under which guarantees are provided or the interest under the same underlying loan is subsidised; and
    • it was not in difficulty as of 31 December 2019 and provides an affidavit stating that it is experiencing a sudden liquidity shortage and that it was not insolvent as of 31 December 2019 and 12 March 2020.
  • Purpose: the EGAP Guarantee can cover new and unused parts of existing loans provided for financing of operating expenses or working capital, for maintenance of business activities, or as investment loans (i.e. to finance expenses relating to innovations and improvement of an undertaking’s production capabilities) and, with the prior consent of EGAP, also for a refinancing of the existing loans provided for such purposes.
  • Maximum guaranteed amount: the maximum loan percentage of individual loans covered by the Portfolio Guarantee shall be equal to:
  • 80% of the loan principal in case the borrower is rated by EGAP on the rating scale as “B” or higher; and
  • 70% of the loan principal in case the borrower is rated by EGAP on the rating scale as “B-”.
  • Conditions: the granting of a Guarantee is subject to the following conditions:

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