Finnvera plans to use InvestEU programme to advance digitalisation and sustainable development – new loan planned for corporate digital and climate projects
Expectations have grown for the fight against climate change, for innovations in sustainable development, and digitalisation. The green transition is also boosted by Europe's efforts to decouple itself from Russian energy. Finnvera’s goal is to take advantage of the risk-sharing offered by the InvestEU programme in a loan product for financing innovative digital businesses and projects compatible with sustainable development.
Climate change and actions taken to counter its effects play a key role in the Finnvera strategy. If implemented, the new product will offer new tools to this end.
“Finnvera has submitted an application and a product proposal to the European Investment Fund in May 2022. The schedule for launching the product mainly depends on the timetables of our European partners. Finnvera is prepared to have the loan available to companies in 2022”, says Finnvera's EU Finance Manager Elias Jokinen.
Finnvera's upcoming so-called digital and climate loan is intended for use by SMEs and midcap companies investing in ways to digitise business activities or to support investments which promote the goals of the green transition or sustainable development.
The green transition and sustainable development will be examined through the lens of corporate responsibility and good governance - aka the ESG criteria. These criteria will have a strong presence in all future EU funding.
InvestEU expanding corporate finance opportunities - Finnvera holds key position for channelling funding in Finland
The goal of the InvestEU programme is to launch investments in Europe worth EUR 372 billion by the end of 2027. The programme will be implemented by the European Investment Bank Group and national financial institutions in cooperation with the European Commission
“As a loan and guarantee institution, Finnvera holds a key position in the utilisation of the InvestEU programme and other EU loan and guarantee programmes, and in channelling and repatriating money to companies in Finland. With the programme we are taking a concrete step in accordance with our strategy to diversify the financing of the green transition and innovations”, says Juuso Heinilä, Executive Vice President of SME and midcap financing at Finnvera.
A large portion of the budget for the InvestEU programme comes from the EU's recovery instrument and the money is used in countries where the programme is actively utilised. Private financial institutions have grown accustomed to extensively utilising the EU's risk sharing in recent years. Finnvera's role as a partial guarantor will also continue.
This is how Finnvera utilises EU financial instruments in its products at the moment
Finnvera's SME guarantee, which is intended for the financing of growth-seeking SMEs, utilise the COSME cross guarantee agreement, which allows the guarantee to be unsecured for the company. An SME guarantee helps small and medium-sized enterprises get financing from a bank for different investment, working capital, and product development needs. Finnvera can grant an unsecured 80-percent guarantee for a loan worth up to EUR 150,000.
In the Pan-European Guarantee Fund (EGF) programme of the European Central Bank Finnvera can grant a total of EUR 650 million in working capital and investment loans primarily for the finance needs of large businesses. The funding has a 75% guarantee from the EIB. The guarantee programme is currently in force through the end of June 2022.
Finnvera also has an Implementation Partners' Agreement in the Alternative Fuels Infrastructure Facility (AFIF) of the Connecting Europe Facility (CEF) programme. With the help of a loan granted by Finnvera for infrastructure projects for environmentally friendly fuels, a company can apply to the Commission for aid for the project. The loan is a condition for the aid, and its minimum amount is 10 percent of the total costs of the project.
Juuso Heinilä, Executive Vice President, SME and midcap financing, Finnvera, tel. +358 29 460 2576
Elias Jokinen, EU Finance Manager, Finnvera, tel. +358 29 460 2913