Press Release: State Aid: Commission clears aid for the creation of Big Society Capital

The European Commission has approved under EU state aid rules support measures of up to GBP 400 million to be provided by the United Kingdom for the creation of social investment company Big Society Capital (BSC).

The object of BSC is to invest in social companies, mainly Social Investment Finance Intermediaries (SIFIs) that have difficulties in procuring affordable funding from the markets.

The Commission found the measure to be in line with EU state aid rules, in particular because BSC's business model contains a number of safeguards to ensure that its investments do not distort competition at the level of the SIFIs. Moreover, SIFIs are required to re-invest the capital by lending to frontline social sector organisations under strict conditions, to avoid crowding out private investors and distorting competition. The Commission approved the measure for five years.