Finnish SMEs to benefit from new climate and innovation loan products with EIF guarantee

Finnish SMEs to benefit from new climate and innovation loan products with EIF guarantee

(IN BRIEF) The European Investment Fund (EIF) will provide a €170 million guarantee to Finnvera Plc to finance approximately €280 million of investment by small companies in Finland. The support of the InvestEU programme enables the guarantee to trigger more than €372 billion in additional investment from 2021 to 2027. To accelerate the green transition, digitalisation, and energy transformation, Finnvera will introduce a new climate and environment loan product as well as a digitalisation and innovation loan. The maximum credit amount for each individual project is €2 million. With a 60% guarantee from the EIF, SMEs and small mid-caps could be eligible for funding from Finnvera without the need to provide additional security.

(PRESS RELEASE) LUXEMBOURG, 9-May-2023 — /EuropaWire/ — The European Investment Fund (EIF), part of the European Investment Bank Group and established to support Europe’s micro, small and medium-sized enterprises (SMEs), announces that it will provide a €170 million guarantee to Finnvera Plc, to support approximately €280 million of investment by small companies in Finland. Finnvera is the national promotional institution and official export credit agency of Finland. This support was made possible through the InvestEU programme, which aims to trigger additional investments in the fight against climate change, digitalisation and energy transformation.

To accelerate the green transition, Finnvera will introduce a new climate and environment loan product, and a digitalisation and innovation loan. The loans will be launched in June 2023, and the maximum credit amount for each project will be €2 million. The climate and environment loan is intended to finance investments aimed at mitigating climate change and for circular economy projects. The digitalisation and innovation loan will be used to fund product development, digitising business models and supply chains.

Thanks to the 60% guarantee from the EIF, SMEs and small mid-caps in Finland may be eligible for funding from Finnvera without additional security. The new loan products will allow SMEs to invest in transitioning to a greener and more digital future, while contributing to the fight against climate change.

“Any new growth and export potential will increasingly be associated with the energy transformation and green transition, and digitalisation is the key to develop and renew businesses. We encourage companies to seize the business opportunities arising from these sectors. With the help of our new loans we lower the threshold for companies to speed up investments,” said Finnvera Executive Vice President Juuso Heinilä.

“We are delighted to join forces once again with Finnvera, which, thanks to the InvestEU guarantee, will be supporting more than 800 Finnish businesses with access to finance on better terms,” said EIF Chief Executive Marjut Falkstedt. “Operations such as this one are crucial to financing investment projects and achieving growth ambitions. As companies seek to adjust their business models to a greener and more digital future, we are happy to play our part and contribute to making these investments more accessible and affordable.”

European Commissioner for Economy Paolo Gentiloni said: “InvestEU is playing a key role in supporting the sustained investment required to secure the green and digital transition. This agreement will enable the creation of new job opportunities in Finland and help accelerate the country’s transition to a greener and still more digital economy. We are proud to support Finnish businesses with the help they need to achieve this goal.”

Background information

Finnvera is the national promotional institution of Finland and its official export credit agency. It is wholly owned by the Finnish government, rated Aa1 and AA+ respectively by Moody’s and S&P. Finnvera was established in 1999 by the Finnish government with a mission to support SME financing by issuing guarantees and loans as well as to guarantee Finnish exports. It currently has 365 employees and approximately 24 400 clients and serves the whole of Finland via a regional network of 15 offices. By law, the Finnish government compensates part of the credit losses incurred by Finnvera, normally at a rate of 50% (increased to 80% until end of 2022, due to the pandemic crisis) of the final losses incurred by Finnvera in SME financing. At year-end 2022, Finnvera had a balance sheet total of €12.6 billion. In 2022, domestic loans and guarantees granted by Finnvera totalled €1.1 billion.

The European Investment Fund is part of the European Investment Bank Group. Its central mission is to support Europe’s small and medium-sized enterprises (SMEs) by helping them access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments that specifically target this market segment. In this role, the EIF furthers key EU policy objectives such as competitiveness and growth, innovation and digitalisation, social impact, skills and human capital, climate action and environmental sustainability, and more.

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for the European Union’s policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, 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 that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.

Press contacts

EIB Group:
Kristiina Randmaa, tel.: +352 4379 72894 — k.randmaa@ext.eib.org
Follow us on Twitter
Website: www.eif.org — Press Office: +352 4379 21000 — press@eib.org

European Commission:
Flora Matthaes | flora.matthaes@ec.europa.eu | +32 229 83951

Finnvera:
Tiina Riippa, tel. +358 029 460 2865 — tiina.riippa@finnvera.fi
Finnvera on Twitter
Website: https://www.Finnvera.fi/eng

SOURCE: European Investment Fund