Finnvera Spearheads Climate-Friendly Investments with EUR 200 Billion Plans

Finnvera Spearheads Climate-Friendly Investments with EUR 200 Billion Plans

(IN BRIEF) Finnvera, committed to promoting climate-friendly investments, announces plans for low-emission investments worth over EUR 200 billion, aligning with the Paris Climate Agreement’s goal of limiting global warming to 1.5 degrees. With a focus on reducing carbon footprints, Finnvera reports a 35% decrease in emissions from financing operations. The organization emphasizes the importance of incentivizing projects with positive climate impacts, offering financial support through various initiatives such as unsecured loans for green transition projects and export credits for climate-positive exports. Additionally, Finnvera introduces a sustainable financing framework for treasury operations, reflecting the growing importance of ESG criteria in capital markets. Through these efforts, Finnvera aims to facilitate the development and implementation of technological solutions that combat climate change while promoting economic growth and internationalization for Finnish businesses.

(PRESS RELEASE) HELSINKI, 26-Apr-2024 — /EuropaWire/ — The transition to lower-emission solutions increases the demand for investments and creates new business and export opportunities. It is important that Finnish businesses can play a role in solving the challenges posed by climate change. There are plans of low-emission investments to Finland worth more than EUR 200 billion. Finnvera has defined a climate target for its operations and launched financing incentives for climate-positive export projects and investments. In 2022, Finnvera’s carbon footprint for financed domestic and export projects totalled to 5.8 Mt CO2e. Finnvera’s export financing exposure related to energy sector amounted to EUR 1.3 billion at the end of 2023. Of the exposure, renewable energy accounted for 38%.

In its climate target Finnvera is committed to measures that promote the goal of the Paris Climate Agreement of limiting global warming to 1.5 degrees.

“To measure and assess the climate targets as well as climate impacts of the financed projects and Finnvera’s own operations, we will define an emission reduction pathway to 2050. In 2022, Finnvera reported for the first time the total CO2 emissions of its outstanding commitments. The development of the emission calculations continued in 2023, and the more detailed data indicated that Finnvera’s emissions from financing operations decreased by 35% compared to the previously reported”, says Sustainability Manager Nina Karisalo at Finnvera.

The financial sector plays a key role in implementing the clean transition. Climate change mitigation is an essential part of Finnvera’s strategy.

“We want to encourage projects that have positive climate effects. Finnvera’s task is to promote internationalisation and export and to supplement financing market. This gives us a good opportunity to participate in new investments that help speed up the clean transition”, says Executive Vice President Jussi Haarasilta at Finnvera.

Finnvera uses climate criteria to identify the climate-positive features of the projects to be financed. In larger export financing projects, the climate-positive features are defined by sector-specific climate criteria, based on key international frameworks. In domestic financing we apply, for example, the terms and conditions of the climate and digitalisation loans backed by the InvestEU guarantee programme. In evaluating companies applying for domestic financing we also use Suomen Asiakastieto’s ESG reporting service.

With the help of incentives, we want to ensure that innovations proceed to implementation

The availability and terms of financing can affect companies’ opportunities to seize new growth and open new markets.

Finnvera’s financial incentives are suitable for both large and small investments both in Finland and abroad:

• Finnvera’s unsecured climate and environmental loan and digitalisation and innovation loan are a great option for green transition projects and digital development initiatives. We can provide up to EUR 2 million in unsecured loans. By the end of 2023, a total of EUR 36 million of the loans launched in June 2023 had been granted.
• We identify high-potential investments in which Finnvera can participate with domestic loans or guarantees at an earlier-than-usual stage and with up to an 80% share.
• Finnvera can provide export credits up to EUR 40 million to projects that meet sector-specific climate criteria. Before granting an export credit, we find out whether your bank can grant the credit you need with the help of Finnvera’s export credit guarantees. Otherwise, maximum amount of an export credit is EUR 20 million. The export credit expands the export financing possibilities of small and medium-sized companies in particular.
• As part of the OECD Arrangement on Officially Supported Export Credits, the participating export credit agencies have agreed on the ways that export financing can help encourage climate-positive investments and export projects, for example by allowing long repayment period for credits. We  look for the most suitable incentives for implementing green growth-oriented export projects on a case-by-case basis.

Finnvera’s mission is to finance the start-up, growth and internationalisation of domestic businesses as well as exports from Finland. If a project fails to meet our climate criteria, it will still be eligible for financing after the financing decision has been assessed in accordance with Finnvera’s general risk and credit policy.

“We want to encourage Finnish companies to develop technological solutions that will help mitigate climate change, both globally and in various markets. To make it easier for companies to advance their innovations, we offer companies a customised service and designated experts. It is in everyone’s interest that investments, climate measures and growth make progress”, says Jussi Haarasilta.

To improve sustainability of the treasury operations, Finnvera introduced a framework for sustainable investments

The arrangement of buyer financing for foreign buyers is often a prerequisite for closing an export deal. Finnvera operates actively in the international capital markets and uses the funds it acquires to finance export credits. At the end of 2023, the outstanding bonds issued amounted to EUR 10.6 billion. Finnvera has recognised the growing expectations of institutional investors regarding ESG information. Finnvera introduced a sustainable financing framework for the company’s liquidity portfolio’s long-term investments. At the end of 2023, the liquidity portfolio amounted to EUR 4.7 billion, of which approximately 60% were long term bond investments. Out of these, 18% were thematic investments meeting the ESG-criteria of which 75% were green bonds. The target allocation for thematic investments is set in the annual investment plan.

Media Contacts:

Jussi Haarasilta
Executive Vice President, Large Corporates, Finnvera
tel. +358 29 460 2601

Nina Karisalo
Sustainability Manager, Finnvera
tel. +358 29 460 2964

SOURCE: Finnvera