AIB, with the European Investment Fund as a partner, has introduced a £20 million (€25.4 million) technology fund to provide financial support to rapidly growing small and medium enterprises in the Irish technology sector.

The fund will provide quasi debt instruments such as bridging finance for firms in the fundraising process. It will also make equity investments with other institutional investors on a co-investment basis.

The fund will allow AIB to play a role in funding IT businesses with a promising product range and good management but which are not yet cash generative and unsuitable for conventional bank lending to support their growth.

The European Investment Fund is a joint venture between the European Investment Bank, the EU and financial institutions from member-states. It provides guarantees on debt finance and invests in venture capital funds providing capital to small and medium enterprises.