Greece will set up a development bank to fund infrastructure projects, start ups, small businesses and export oriented companies, the government's economic policy council said today.

The Hellenic Development Bank will be a state lender that will complement commercial banks to help fund growth and regional projects.

The bank will seek the participation of other state entities with funding capacity to take part in its share capital and collaborate with international funding institutions.

"The goal is to endow the bank with the necessary funding and assets so that it can perform its role," the council said in a statement. "Its founding will fill a gap in the country's funding gap."

Greece's economy, battered by the country's debt crisis, is struggling to recover after a multi-year deep recession.

Other EU development banks have been providing financing for investments. The European Bank for Reconstruction and Development (EBRD) will be investing in Greece up until the end of 2020 and expects its financing to reach the €2 billion mark by 2018.

In June, the European Investment Bank (EIB) activated €400 million of financing to help small and medium-sized Greek companies in their exporting activities.