EIF Joins Forces with Alfa Framtak to Launch First-Ever Private Equity Fund Commitment in Iceland

EIF Joins Forces with Alfa Framtak to Launch First-Ever Private Equity Fund Commitment in Iceland

(IN BRIEF) The European Investment Fund (EIF) has made its first-ever private equity fund investment in Iceland, committing €30 million to Alfa Framtak’s AF3 fund under the European Commission’s InvestEU programme. With a total first close of €145 million, AF3 will focus on Icelandic SMEs and mid-cap firms that drive innovation in sustainability, digital transformation, and decarbonisation. The fund aims to support 8 to 12 companies and will build on Alfa Framtak’s proven strategy of hands-on operational involvement and ESG integration. This investment marks a key step in strengthening Iceland’s competitiveness and expanding EU-backed climate and innovation financing into the region.

(PRESS RELEASE) LUXEMBOURG, 23-Apr-2025 — /EuropaWire/ — The European Investment Fund (EIF) has taken a landmark step by becoming a cornerstone investor in Alfa Framtak’s third private equity vehicle, AF3. This €30 million investment, backed by the European Commission’s InvestEU programme, marks the EIF’s inaugural commitment to a private equity fund in Iceland and helped Alfa Framtak reach its first closing at ISK 22 billion (approximately €145 million).

AF3 will focus on scaling up small and medium-sized enterprises (SMEs) and mid-cap companies in Iceland that are accelerating innovation, advancing digitalisation, promoting sustainability, and driving industrial decarbonisation. The fund expects to make 8 to 12 investments across a variety of strategic sectors, including the blue economy and export-driven businesses.

“This is a tremendous endorsement of our firm and of Iceland’s investment environment,” said Gunnar Páll Tryggvason, CEO of Alfa Framtak. “Welcoming EIF as a shareholder not only validates our approach but signals increasing international confidence in Iceland’s long-term economic outlook.”

The EIF’s participation also underlines the European Union’s commitment to climate action and entrepreneurship. EIF Deputy Chief Executive Merete Clausen described the fund as a key part of a growing pipeline of InvestEU-supported initiatives in Iceland. “It is our mission to help forward-thinking companies drive the green and digital transitions. This partnership will help amplify that ambition in Iceland,” she stated.

At the signing event in Reykjavík, Clara Ganslandt, EU Ambassador to Iceland, added: “This partnership demonstrates our shared vision with Iceland when it comes to tackling climate change through innovation. The AF3 fund will play an essential role in empowering companies that generate meaningful environmental and social impact.”

AF3 continues Alfa Framtak’s established strategy of acquiring significant stakes in domestic companies and partnering with management teams to deliver strategic, operational, and sustainability-focused transformation. In addition to traditional buyouts and growth capital, the fund will pursue special situations while embedding ESG principles throughout its investment process.

Background information:

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. Since its first project in Norway, in 1974, the EIB Group has made available over €6 billion to support projects in the EFTA region, about €5 billion through the EIB and €1,1 billion through the EIF. On the whole, in Iceland alone the EIB Group has made available nearly €1.3 billion euros throughout the years between EIB and EIF financing.

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable economy. It helps generate additional investments in line with EU policy priorities, such as the European Green Deal, the digital transition and support for small and medium-sized enterprises. InvestEU brings all EU financial instruments together under one roof, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub, and the InvestEU Portal. The InvestEU Fund is implemented through financial partners who invest in projects using the EU budget guarantee of €26.2 billion. This guarantee increases their risk-bearing capacity, thus mobilising at least €372 billion in additional investment.

Alfa Framtak ehf. is an Icelandic private equity firm, fully owned by its partners and regulated by the Central Bank of Iceland. The firm currently manages three funds focused exclusively on the Icelandic market, with a strategy centered on acquiring majority stakes in established SMEs and Mid-Caps with strong fundamentals and clear potential for transformation and growth. Alfa Framtak takes a hands-on ownership approach, combining operational expertise with disciplined investment processes to build resilient, competitive businesses. The firm’s track record in value creation—across traditional buyouts, growth capital, and special situations—along with its commitment to responsible investment and support for sectors such as industrial innovation, digitalisation, and the blue economy, were key factors in attracting the European Investment Fund as a cornerstone investor in its third fund.

Press contact:

EIB Group: Tim Smit | +352 691 286 423 | t.smit@eib.org

Alfa Framtak: Anna Þorbjörg Jónsdóttir  | +354 832 4030  | anna@alfaframtak.is

EU Embassy to Iceland: Viktor V. Stefánsson | +354 864 3386 | Viktor.STEFANSSON@eeas.europa.eu

SOURCE: European Investment Fund