Financing supports Valmet Automotive's transition to electrification of mobility - An EGF loan of EUR 100 million to Valmet Automotive
The battery cluster is experiencing a strong growth phase in Finland with the electrification of mobility. The financing supports Valmet Automotive's transition to electrification of mobility. The change will have a significant impact on Finnish exports and employment. Finnvera has granted Valmet Automotive a loan of EUR 100 million with an EGF guarantee from the European Investment Bank (EIB).
Valmet Automotive's customer base includes premium brands like Mercedes-Benz and Volvo.
The automotive industry's need for battery systems and battery production capacity is constantly growing. The funding will support the company’s expansion from a car manufacturer to a battery provider and the green transition.
“At Valmet Automotive, the need for short-term working capital financing is partly related to the pandemic and its impact on supply chains and production. In the longer term, the financing will support the company's product changes and the transition to electronic traffic, says Juha Torniainen, CFO at Valmet Automotive.
In November 2021, as a result of the company’s own product development, Valmet Automotive launched a modular battery platform, which is suitable not only for electrifying traffic but also for machinery.
In Finland, Valmet Automotive’s production is located in Salo and Uusikaupunki. Majority of the company’s 4,500 employees work in Finland. The production is almost entirely export-oriented, and the company is one of the largest export companies in Finland.
“Our operations are growing and diversifying, and this will have a significant impact on Finnish exports and employment”, Juha Torniainen says.
The outlook for the battery cluster is very strong. Valmet Automotive estimates that within a few years, the turnover level of battery manufacturing will reach the turnover level of car manufacturing. The demand for batteries in the automotive industry and beyond is growing very fast.
As an operating environment, Finland offers excellent growth opportunities for the battery business. The national battery cluster is diverse, the Finnish know-how is at a high level and the energy is clean.
EGF programme will continue until the end of June 2022
Finnvera joined the European Investment Bank's (EIB) Pan-European Guarantee Fund (EGF) programme in April 2021. The programme enables Finnvera to grant a total of EUR 650 million of working capital and investment loans, mainly for the financing needs of large enterprises. This funding will have a 75% EIB guarantee.
The Guarantee Fund is intended for large and medium-sized enterprises which exceed the limits of the EU’s SME definition by having a staff headcount of 250 or more, an annual turnover of over EUR 50 million, and a balance sheet total in excess of EUR 43 million.
Finnvera's possibility to grant loans to large companies under the European Investment Bank's (EIB) Pan-European Guarantee Fund (EGF) programme will continue until the end of June 2022. The guarantee programme was originally intended to be in force until the end of 2021.
“The extension of the guarantee programme further expands Finnvera's opportunities to fulfil its role as a complementary provider of financing on the financial markets and also enable large enterprises to benefit from the Pan-European Guarantee Fund”, says Jussi Haarasilta, Finnvera’s Executive Vice President.
The loans under the guarantee programme will be provided directly by Finnvera. An individual loan amount may not exceed EUR 100 million, and the credit period is at maximum six years. The more detailed terms and conditions of the financing will be agreed upon individually for each project. In principle, the same terms and conditions will apply as to the company’s other financing.
Finnvera credit under EGF guarantee
Borrower: Valmet Automotive
Credit amount: EUR 100 million working capital limit
Credit period: 4 years
Agreement entered: December 2021
Date of publish: 27January 2022