The European Investment Fund (EIF) and three leading lenders in the Baltic states – LHV Pank, SEB Bank and Swedbank – have joined forces in an effort to trigger more than €720 million in new financing for local businesses and households in the region.
The EIF is providing guarantee agreements that will facilitate lending by LHV, SEB and Swedbank for projects promoting climate protection and environmental sustainability in Estonia, Latvia and Lithuania. The guarantee agreements, announced today in Tallinn, are backed by the InvestEU programme.
Most of the financing under the guarantee agreements will support small and medium sized companies. Under the agreement, signed in Tallinn today, housing associations and natural persons will also be eligible for financing.
"Over the years, the EIF has developed an excellent partnership with Swedbank, SEB Bank and LHV," EIF Chief Executive Marjut Falkstedt said at the signing ceremony. "Building on this cooperation, these new agreements will ensure that Baltic businesses have better access to finance, empowering them to pursue their aspirations for growth and at the same time helping them to navigate the green transition and contribute to a greener future.
Thanks to the guarantee agreements, banks can offer better financing terms such as lower interest rates, longer maturities and lower collateral requirements. The agreement will benefit start-ups and microenterprises that might otherwise face obstacles in securing investment financing, and will help housing associations to fund energy-efficiency renovations and people to invest in zero-emissions vehicles and vessels.
More than 50% of the financing is meant for eco-friendly investments, enabling the banks to step up their support for the green and sustainable transformation of the Baltic economy.
"This programme will help us to widen the availability of financing of investments to improve the efficiency of companies and, in particular, apartment associations. said LHV Pank CEO Kadri Kiisel. "In a broader perspective, the expansion of investments is crucial, as it concerns the competitiveness of our economy and economic growth. Thanks to this valuable EIF programme we can make loans for energy solutions much more affordable than before, for instance."
Member of the Management Board and Head of Retail Banking at SEB Bank Ainar Leppänen stated: "We welcome the expansion of the EIF guarantee programme to the Baltics. One of SEB's missions is to help companies grow sustainably and make households more energy efficient. The EIF cooperation agreement facilitates this on more favourable terms for customers, and we hope that this cooperation gets off to a successful start."
"Under the COSME and EaSI programmes supported by the EIF, Swedbank has already issued over €630 million in bank loans and leasing services to small and medium-sized enterprises (SMEs) in the Baltics. We now look forward to further cooperation that will result in more than €336 million of additional financing SMEs and apartment associations in the coming years," said CEO of Swedbank Estonia and Member of the Baltic Banking Management Group Olavi Lepp.
The European Commission's InvestEU programme aims to unlock more than €372 billion in additional investment between 2021 and 2027 for EU policy priorities, including the green and digital transitions.
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.
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.
