EIF partners with leading Finnish banks to provide €1bn in financing

• The operation will support Finnish small businesses and housing associations.
• The agreement paves the way for improved financing terms, including lower interest rates, and is supported by InvestEU, an EU programme to mobilise at least €372 billion for EU policy priorities by 2027.

The European Investment Fund (EIF) has finalised agreements with eight leading banks and financial institutions in Finland to assist small and medium-sized enterprises (SMEs), small mid-caps and housing associations. The agreements will facilitate around €1 billion in lending to invest in projects that promote Finland’s climate objectives and environmental sustainability.

The guarantees will enable partner banks to offer better financing terms, such as lower interest rates. Additionally, thanks to the EIF guarantees in place, banks can provide longer maturities with lower collateral requirements, among other things. The agreement will therefore benefit startups that could have otherwise faced obstacles in securing financing for their investments, and help housing associations to finance necessary energy efficiency renovations. The guarantee may cover up to 70-80% of each loan’s amount.

Eight banks and financial institutions covered

The EIF has concluded agreements with the following banks and financial institutions: Aktia, Danske Bank, Finnvera, Nordea Bank, Oma Savings Bank, OP Cooperative, POP Bank and Ålandsbanken. Thanks to the InvestEU Sustainability Guarantee, these partner banks will be able to step up their support for the green and sustainable transformation of the Finnish economy, and finance end beneficiaries’ environmentally friendly, green and inclusive investments.

“The new source of financing totalling one billion euros is a most welcome addition to the market. The sustainability guarantee loan will encourage SMEs and housing companies to also invest in energy efficiency of buildings and clean energy. I hope that the loan guarantee will boost investments in the real estate and construction sector now that the difficult economic situation has slowed down new construction and renovation and the Energy Performance of Buildings Directive brings new requirements,” says Minister of Climate and the Environment Kai Mykkänen.

Banks and financial institutions involved in the programme may be contacted directly for more information on loans and their terms. They will incorporate the InvestEU Sustainability Guarantee into their product range and select the target groups to which they will grant loans (SMEs, small mid-caps and housing associations).

“We’re delighted to be collaborating closely with the Finnish government and the European Commission to ensure that Finnish businesses receive the financial support they need to navigate the green transition,” said EIF Chief Executive Marjut Falkstedt. “These agreements will translate into greater access to finance, empowering small businesses to pursue their growth ambitions and at the same time contribute to a greener future.”

The sustainability guarantees are backed by the European Commission’s InvestEU programme, which aims to trigger more than €372 billion in additional investment between 2021 and 2027 for EU policy priorities, including the green and digital transitions.

On top of the initial contribution to the InvestEU guarantee, the government of Finland has allocated an additional €100 million to the loan programme in Finland to increase the scale and impact of the guarantees. In Finland, the loan guarantee programme is administered by the Ministry of Economic Affairs and Employment and the Ministry of the Environment.

Extensive opportunities for using sustainability guarantee

The sustainability guarantee provided by the EIF can be used to finance a range of green investments, including building energy efficiency, renewable energy resources like geothermal heat and wind or solar power, vehicle charging infrastructure, electric cars, and the circular economy. It also covers investments that improve accessibility.

Background information

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. In 2023, the EIF invested €250 million in funds that support local businesses in Finland. Read more here.

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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