Finland has benefitted the most from EU corporate financing in relation to population
Total of EFSI financing approved for Finland reaching EUR 1.4 billion
Finnish businesses have been keen to make use of the available EU funding. Of all European countries, Finland is the No. 1 beneficiary of the European Fund for Strategic Investments (EFSI) in relation to the size of its population; in relation to GDP, Finland is sixth. So far, a total of EUR 1.4 billion of EFSI financing has been approved for Finland, expected to launch investments worth EUR 5.6 billion during the next few years. The newest financing agreements focus on high technology projects, research and development.
EFSI is part of the European Investment Plan, aiming at increasing investment and improving employment in Europe. EFSI was originally launched in 2015, and the number of projects financed in Finland has increased every year. Finnish banks have been very active in making use of the European financing. Growth is also partially explained by increased awareness.
“The EFSI financing has taken off excellently, and SMEs have had the opportunity to benefit more and more not only from EFSI, but also direct financing by the European Investment Bank (EIB) and other EU financing instruments. In previous years, mainly large infrastructure and construction projects were targeted, but this year, the focus has been on high-tech SMEs as well as research and development projects”, says Valtteri Vento, Finnvera’s EFSI financing programme manager.
The size of financing plans directly supported with the EFSI guarantee scheme have varied from EUR 10 million to 150 million.
Project criteria include research activities and environmental and energy efficiency
The financing available from EFSI may be applied for viable projects that meet the set industry criteria and already have some other financing arranged for them – from own sources or elsewhere. The key industry criteria for Finland include research, development and innovation, environmental protection and management, education, SMEs, and energy efficiency and renewable energy.
With assistance from the EU, a business may get a 50% guarantee for its financing. When the financing requirement is less than EUR 10 million, the guarantee is channelled through intermediary banks. For larger projects, the financing comes directly from the EIB. SME InnovFin is one of the SME instruments that offers EFSI guarantee arrangements through an intermediary bank for projects that do not exceed EUR 7.5 million. Since EFSI financing is not assistance, but provided for consideration, the applicant’s own contribution is always required. When financing is provided for SMEs, an individual project may have both the EFSI guarantee and a 30% partial guarantee by Finnvera. In January–June 2017, the total of Finnvera’s partial guarantees tripled to about EUR 24 million compared to the second half of 2016. This gives a reason to expect that the strong demand is going to continue.
On the European level, the size of the guarantee arrangement is huge. In the first phase, which ends on 4 July 2018, the aim is to launch investments in Europe worth EUR 315 billion. Later, the ceiling for the guarantee arrangement should be increased to EUR 500 billion, while the time frame will be extended up to the year 2020.
Demand for information services keeps growing
As part of the European Investment Plan, Finnvera has, since early 2017, provided guidance on European financing through a helpline, via e-mail and by appointment. For more information, customers are referred to esir.fi, where they can fill in a suitability assessment of whether their project is compatible with EFSI financing.
“Businesses are increasingly attracted to EFSI financing. The website has about 300 new visitors every month. So far, we have provided personal guidance to around 120 customers and held dozens of information sessions all over Finland.”
Even banks can call Finnvera’s helpline whenever they need help with questions related to EFSI and other European financing.
Valtteri Vento, programme manager, Finnvera, +358 29 460 2531, firstname.lastname@example.org
For more information on EFSI financing, visit esir.fi.