The State’s responsibility for the company’s commitments

Finnvera’s objective is to ensure that, in the long term, the expenses incurred in the company’s operations can be covered by the income received from operations. If the State decides to support some of Finnvera’s activities separately, the necessary appropriations are included in the State Budget.

The annual profits from domestic financing and export financing are transferred to two separate funds on Finnvera’s balance sheet. Correspondingly, losses from domestic operations are covered from the fund for domestic financing, while losses from export credit guarantees and special guarantees are covered from the fund for export financing. There is no cross-subvention between the funds. At the end of the year, before appropriations, the assets of the funds totalled EUR 312 million. The State Guarantee Fund and the State of Finland are responsible for Finnvera’s losses only if the losses cannot be covered by assets in these two funds.

The State Guarantee Fund serves as a buffer between the State Budget and any losses that might arise from Finnvera’s export credit and special guarantee activities. Defined in Section 4 of the Act on the State Guarantee Fund, these losses are ultimately the State’s responsibility. The State Guarantee Fund’s assets are also used to cover the liability arising from the guarantees and other commitments granted by the Finnish Guarantee Board – subsequently incorporated into Finnvera – and by its predecessors. Finnvera manages this ‘old’ liability for the State, and the State Guarantee Fund pays Finnvera a fee for its management. The ‘old’ liability totalled EUR 43 million at year’s end.

The State has made commitments to Finnvera concerning compensation for credit and guarantee losses and payment of interest and commission support.

The State’s commitments enable Finnvera to take higher risks in domestic operations than those taken by commercial financial institutions. In addition, the Government is entitled to grant State guarantees as security for domestic and foreign loans taken by Finnvera.

In 2011, a fund for venture capital investments was established on Finnvera’s balance sheet, under unrestricted equity. This fund is used for monitoring the assets allocated by the European Regional Development Fund (ERDF) for venture capital investments. In June 2011, the Ministry of Employment and the Economy granted Finnvera EUR 18 million for venture capital investments during the ERDF programme period 2007–2013. This sum has been entered into the above fund for venture capital investments.