InvestEU: EIF and Finnvera sign agreement channelling €280 million to small businesses in Finland to boost green transition, innovation and digitalisation
The European Investment Fund (EIF) will provide a €170 million guarantee to Finnvera Plc, the national promotional institution and official export credit agency of Finland, to finance approximately €280 million of investment by small companies in Finland.
This agreement was made possible with the support of the InvestEU programme, which aims to trigger more than €372 billion in additional investment over the period from 2021 to 2027.
To support the fight against climate change and accelerate the green transition, digitalisation and energy transformation, Finnvera will launch a new climate and environment loan product as well as a digitalisation and innovation loan. The facilities will be rolled out in the beginning of June 2023.
The new loan products will allow small and medium-sized businesses (SMEs) in particular to increase their investments in transitioning to a greener and more digital future. The climate and environment loan is intended for investments aimed at mitigating climate change and for circular economy projects. Digitalisation and innovation loans will be used to finance product development, and for digitising business models and supply chains.
The maximum credit amount for each individual project is planned to be €2 million. Thanks to a 60% guarantee from the EIF, SMEs and small mid-caps could be eligible for funding from Finnvera without the need to provide additional security.
“Any new growth and export potential will increasingly be associated with the energy transformation and green transition, and digitalisation is the key to develop and renew businesses. We encourage companies to seize the business opportunities arising from these sectors. With the help of our new loans we lower the threshold for companies to speed up investments,” said Finnvera Executive Vice President Juuso Heinilä.
“We are delighted to join forces once again with Finnvera, which, thanks to the InvestEU guarantee, will be supporting more than 800 Finnish businesses with access to finance on better terms,” said EIF Chief Executive Marjut Falkstedt. “Operations such as this one are crucial to financing investment projects and achieving growth ambitions. As companies seek to adjust their business models to a greener and more digital future, we are happy to play our part and contribute to making these investments more accessible and affordable.”
European Commissioner for Economy Paolo Gentiloni said: “InvestEU is playing a key role in supporting the sustained investment required to secure the green and digital transition. This agreement will enable the creation of new job opportunities in Finland and help accelerate the country’s transition to a greener and still more digital economy. We are proud to support Finnish businesses with the help they need to achieve this goal.”
Finnvera is the national promotional institution of Finland and its official export credit agency. It is wholly owned by the Finnish government, rated Aa1/P-1 by Moody’s and AA+/F1+ by Fitch. Finnvera was established in 1999 by the Finnish government with a mission to support SME financing by issuing guarantees and loans as well as to guarantee Finnish exports. It currently has 365 employees and approximately 24 400 clients and serves the whole of Finland via a regional network of 15 offices. By law, the Finnish government compensates part of the credit losses incurred by Finnvera, normally at a rate of 50% (increased to 80% until end of 2022, due to the pandemic crisis) of the final losses incurred by Finnvera in SME financing. At year-end 2022, Finnvera had a balance sheet total of €12.6 billion. In 2022, domestic loans and guarantees granted by Finnvera totalled €1.1 billion.
The European Investment Fund is part of the European Investment Bank Group. Its central mission is to support Europe’s small and medium-sized enterprises (SMEs) by helping them access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments that specifically target this market segment. In this role, the EIF furthers key EU policy objectives such as competitiveness and growth, innovation and digitalisation, social impact, skills and human capital, climate action and environmental sustainability, and more.
The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for the European Union’s policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.
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